The Common Law Part 16

But, as has been said before in these Lectures, although the law starts from the distinctions and uses the language of morality, it necessarily ends in external standards not dependent on the actual consciousness of the individual. [325] So it has happened with fraud. If a man makes a representation, knowing facts which by the average standard of the community are sufficient to give him warning that it is probably untrue, and it is untrue, he is guilty of fraud in theory of law whether he believes his statement or not. The courts of Ma.s.sachusetts, at least, go much further. They seem to hold that any material statement made by a man as of his own knowledge, or in such a way as fairly to be understood as made of his own knowledge, is fraudulent if untrue, irrespective of the reasons he may have had for believing it and for believing that he knew it. /1/ It is clear, therefore, that a representation may be morally innocent, and yet fraudulent in theory of law. Indeed, the Ma.s.sachusetts rule seems to stop little short of the principle laid down by the English courts of equity, which has been criticised in an earlier Lecture, /2/ since most positive affirmations of facts would at least warrant a jury in finding that they were reasonably understood to be made as of the party's own knowledge, and might therefore warrant a rescission if they turned out to be untrue. The moral phraseology has ceased to be apposite, and an external standard of responsibility has been reached. But the starting-point is nevertheless fraud, and except on the ground of fraud, as defined by law, I do not think that misrepresentations before the contract affect its validity, although they lead directly to its making. But neither the contract nor the implied condition calls for the existence of the facts as to which the false representations were made. They call only for the absence of certain false representations. The condition is not that the promisee shall be a certain other B, or that the contents of the barrel shall be mackerel, [326] but that the promisee has not lied to him about material facts.

Then the question arises, How do you determine what facts are material? As the facts are not required by the contract, the only way in which they can be material is that a belief in their being true is likely to have led to the making of the contract.

It is not then true, as it is sometimes said, that the law does not concern itself with the motives for making contracts. On the contrary, the whole scope of fraud outside the contract is the creation of false motives and the removal of true ones. And this consideration will afford a reasonable test of the cases in which fraud will warrant rescission. It is said that a fraudulent representation must be material to have that effect. But how are we to decide whether it is material or not? If the above argument is correct, it must be by an appeal to ordinary experience to decide whether a belief that the fact was as represented would naturally have led to, or a contrary belief would naturally have prevented, the making of the contract.

If the belief would not naturally have had such an effect, either in general or under the known circ.u.mstances of the particular case, the fraud is immaterial. If a man is induced to contract with another by a fraudulent representation of the latter that he is a great-grandson of Thomas Jefferson, I do not suppose that the contract would be voidable unless the contractee knew that, for special reasons, his lie would tend to bring the contract about.

The conditions or grounds for avoiding a contract which have been dealt with thus far are conditions concerning the conduct of the parties outside of the itself. [327] Still confining myself to conditions arising by construction of law,--that is to say, not directly and in terms attached to a promise by the literal meaning of the words in which it is expressed,--I now come to those which concern facts to which the contract does in some way refer.

Such conditions may be found in contracts where the promise is only on one side. It has been said that where the contract is unilateral, and its language therefore is all that of the promisor, clauses in his favor will be construed as conditions more readily than the same words in a bilateral contract; indeed, that they must be so construed, because, if they do not create a condition, they do him no good, since ex hypothesi they are not promises by the other party. /1/ How far this ingenious suggestion has had a practical effect on doctrine may perhaps be doubted.

But it will be enough for the purposes of this general survey to deal with bilateral contracts, where there are undertakings on both sides, and where the condition implied in favor of one party is that the other shall make good what he on his part has undertaken.

The undertakings of a contract may be for the existence of a fact in the present or in the future. They can be promises only in the latter case; but in the former, they be equally essential terms in the bargain.

Here again we come on the law of representations, but in a new phase. Being a part of the contract, it is always possible that their truth should make a condition of the contract wholly irrespective of any question of fraud. And it often is so in fact. It is not, however, every representation embodied in the words used on one side which will [328] make a condition in favor of the other party. Suppose A agrees to sell, and B agrees to buy, "A's seven-year-old sorrel horse Eclipse, now in the possession of B on trial," and in fact the horse is chestnut-colored, not sorrel. I do not suppose that B could refuse to pay for the horse on that ground. If the law were so foolish as to aim at merely formal consistency, it might indeed be said that there was as absolute a repugnancy between the different terms of this contract as in the ease of an agreement to sell certain barrels of mackerel, where the barrels turned out to contain salt. If this view were adopted, there would not be a contract subject to a condition, there would be no contract at all. But in truth there is a contract, and there is not even a condition. As has been said already, it is not every repugnancy that makes a contract void, and it is not every failure in the terms of the counter undertaking that makes it voidable. Here it plainly appears that the buyer knows exactly what he is going to get, and therefore that the mistake of color has no bearing on the bargain. /1/

If, on the other hand, a contract contained a representation which was fraudulent, and which misled the party to whom it was made, the contract would be voidable on the same principles as if the representation had been made beforehand. But words of description in a contract are very frequently held to amount to what is sometimes called a warranty, irrespective of fraud.

Whether they do so or not is a question to be determined by the court on grounds of common sense, looking to the meaning of the words, the importance in the transaction of the facts [329] which the words convey, and so forth. But when words of description are determined to be a warranty, the meaning of the decision is not merely that the party using them binds himself to answer for their truth, but that their truth is a condition of the contract.

For instance, in a leading case /1/ the agreement was that the plaintiff's ship, then in the port of Amsterdam, should, with all possible despatch, proceed direct to Newport, England, and there load a cargo of coals for Hong Kong. At the date of the charter-party the vessel was not in Amsterdam, but she arrived there four days later. The plaintiff had notice that the defendant considered time important. It was held that the presence of the vessel in the port of Amsterdam at the date of the contract was a condition, the breach of which ent.i.tled the defendant to refuse to load, and to rescind the contract. If the view were adopted that a condition must be a future event, and that a promise purporting to be conditional on a past or present event is either absolute or no promise at all, it would follow that in this case the defendant had never made a promise. /2/ He had only promised if circ.u.mstances existed which did not exist. I have already stated my objections to this way of looking at such cases, /2/ and will only add that the courts, so far as I am aware, do not sanction it, and certainly did not in this instance.

There is another ground for holding the charter-party void and no contract, instead of regarding it as only voidable, which is equally against authority, which nevertheless I have never been able to answer wholly to my satisfaction. In the case put, the representation of the lessor of the vessel [330] concerned the vessel itself, and therefore entered into the description of the thing the lessee agreed to take. I do not quite see why there is not as fatal a repugnancy between the different terms of this contract as was found in that for the sale of the barrels of salt described as containing mackerel. Why is the repugnancy between the two terms,--first, that the thing sold is the contents of these barrels, and, second, that it is mackerel--fatal to the existence of a contract? It is because each of those terms goes to the very root and essence of the contract, /1/--because to compel the buyer to take something answering to one, but not to the other requirement, would be holding him to do a substantially different thing from what he promised, and because a promise to take one and the same thing answering to both requirements is therefore contradictory in a substantial matter. It has been seen that the law does not go on any merely logical ground, and does not hold that every slight repugnancy will make a contract even voidable. But, on the other hand, when the repugnancy is between terms which are both essential, it is fatal to the very existence of the contract. How then do we decide whether a given term is essential? Surely the best way of finding out is by seeing how the parties have dealt with it. For want of any expression on their part we may refer to the speech and dealings of every day, /2/ and say that, if its absence would make the subject-matter a different thing, its presence is essential to the existence of the agreement. But the parties may agree that anything, however trifling, shall be essential, as well [331] as that anything, however important, shall not be; and if that essential is part of the contract description of a specific thing which is also identified by reference to the senses, how can there be a contract in its absence any more than if the thing is in popular speech different in kind from its description? The qualities that make sameness or difference of kind for the purposes of a contract are not determined by Aga.s.siz or Darwin, or by the public at large, but by the will of the parties, which decides that for their purposes the characteristics insisted on are such and such. /1/1 Now, if this be true, what evidence can there be that a certain requirement is essential, that without it the subject-matter will be different in kind from the description, better than that one party has required and the other given a warranty of its presence? Yet the contract description of the specific vessel as now in the port of Amsterdam, although held to be an implied warranty, does not seem to have been regarded as making the contract repugnant and void, but only as giving the defendant the option of avoiding it. /2/ Even an express warranty of quality in sales does not have this effect, and in England, indeed, it does not allow the purchaser to rescind in case of breach. On this last point the law of Ma.s.sachusetts is different.

The explanation has been offered of the English doctrine with regard to sales, that, when the t.i.tle has pa.s.sed, the purchaser has already had some benefit from the contract, and therefore cannot wholly replace the seller in statu quo, as must be done when a contract is rescinded. /3/ This reasoning [332] seems doubtful, even to show that the contract is not voidable, but has no bearing on the argument that it is void. For if the contract is void, the t.i.tle does not pa.s.s.

It might be said that there is no repugnancy in the charterer's promise, because he only promises to load a certain ship, and that the words "now in the port of Amsterdam" are merely matter of history when the time for loading comes, and no part of the description of the vessel which he promised to load. But the moment those words are decided to be essential they become part of the description, and the promise is to load a certain vessel which is named the Martaban, and which was in the port of Amsterdam at the date of the contract. So interpreted, it is repugnant.

Probably the true solution is to be found in practical considerations. At any rate, the fact is that the law has established three degrees in the effect of repugnancy. If one of the repugnant terms is wholly insignificant, it is simply disregarded, or at most will only found a claim for damages. The law would be loath to hold a contract void for repugnancy in present terms, when if the same terms were only promised a failure of one of them would not warrant a refusal to perform on the other side. If, on the other hand, both are of the extremest importance, so that to enforce the rest of the promise or bargain without one of them would not merely deprive one party of a stipulated incident, but would force a substantially different bargain on him, the promise will be void. There is an intermediate cla.s.s of cases where it is left to the disappointed party to decide. But as the lines between the three are of this vague kind, it is not surprising that they have been differently drawn in different jurisdictions.

[333] The examples which have been given of undertakings for a present state of facts have been confined to those touching the present condition of the subject-matter of the contract. Of course there is no such limit to the scope of their employment. A contract may warrant the existence of other facts as well, and examples of this kind probably might be found or imagined where it would be clear that the only effect of the warranty was to attach a condition to the contract, in favor of the other side, and where the question would be avoided whether there was not something more than a condition,--a repugnancy which prevented the formation of any contract at all. But the preceding ill.u.s.trations are enough for the present purpose.

We may now pa.s.s from undertakings that certain facts are true at the time of making the contract, to undertakings that certain facts shall be true at some later time,--that is, to promises properly so called. The question is when performance of the promise on one side is a condition to the obligation of the contract on the other. In practice, this question is apt to be treated as identical with another, which, as has been shown earlier, is a distinct point; namely, when performance on one side is a condition of the right to call for performance on the other. It is of course conceivable that a promise should be limited to the case of performance of the things promised on the other side, and yet that a failure of the latter should not warrant a rescission of the contract. Wherever one party has already received a substantial benefit under a contract of a kind which cannot be restored, it is too late to rescind, however important a breach may be committed later by the other side. Yet he may be [334] excused from going farther. Suppose a contract is made for a month's labor, ten dollars to be paid down, not to be recovered except in case of rescission for the laborer's fault, and thirty dollars at the end of the month. If the laborer should wrongfully stop work at the end of a fortnight, I do not suppose that the contract could be rescinded, and that the ten dollars could be recovered as money had and received; /1/ but, on the other hand, the employer would not be bound to pay the thirty dollars, and of course he could sue for damages on the contract.

/2/

But, for the most part, a breach of promise which discharges the promisee from further performance on his side will also warrant rescission, so that no great harm is done by the popular confusion of the two questions. Where the promise to perform on one side is limited to the case of performance on the other, the contract is generally conditioned on it also. In what follows, I shall take up the cases which I wish to notice without stopping to consider whether the contract was in a strict sense conditioned on performance of the promise on one side, or whether the true construction was merely that the promise on the other side was limited to that event.

Now, how do we settle whether such a condition exists? It is easy to err by seeking too eagerly for simplicity, and by striving too hard to reduce all cases to artificial presumptions, which are less obvious than the decisions which they are supposed to explain. The foundation of the whole matter is, after all, good sense, as the courts have often said. The law means to carry out the intention of the parties, and, so far as they have not provided [335] for the event which has happened, it has to say what they naturally would have intended if their minds had been turned to the point. It will be found that decisions based on the direct implications of the language used, and others based upon a remoter inference of what the parties must have meant, or would have said if they had spoken, shade into each other by imperceptible degrees.

Mr. Langdell has called attention to a very important principle, and one which, no doubt, throws light on many decisions. /1/ This is, that, where you have a bilateral contract, while the consideration of each promise is the counter promise, yet prima facie the payment for performance of one is performance of the other. The performance of the other party is what each means to have in return for his own. If A promises a barrel of flour to B, and B promises him ten dollars for it, A means to have the ten dollars for his flour, and B means to have the flour for his ten dollars. If no time is set for either act, neither can call on the other to perform without being ready at the same time himself.

But this principle of equivalency is not the only principle to be drawn even from the form of contracts, without considering their subject-matter, and of course it is not offered as such in Mr.

Langdell's work.

Another very clear one is found in contracts for the sale or lease of a thing, and the like. Here the qualities or characteristics which the owner promises that the thing furnished shall possess, go to describe the thing which the buyer promises to accept. If any of the promised traits are wanting in the thing tendered, the buyer may refuse to accept, not merely on the ground that he has not [336] been offered the equivalent for keeping his promise, but also on the ground that he never promised to accept what is offered him. /1/ It has been seen that, where the contract contains a statement touching the condition of the thing at an earlier time than the moment for its acceptance, the past condition may not always be held to enter into the description of the thing to be accepted. But no such escape is possible here. Nevertheless there are limits to the right of refusal even in the present cla.s.s of cases. If the thing promised is specific, the preponderance of that part of the description which identifies the object by reference to the senses is sometimes strikingly ill.u.s.trated. One case has gone so far as to hold that performance of an executory contract to purchase a specific thing cannot be refused because it fails to come up to the warranted quality. /2/

Another principle of dependency to be drawn from the form of the contract itself is, that performance of the promise on one side may be manifestly intended to furnish the means for performing the promise on the other. If a tenant should promise to make repairs, and the landlord should promise to furnish him wood for the purpose, it is believed that at the present day, whatever may have been the old decisions, the tenant's duty to repair would be dependent upon the landlord's furnishing the material when required. /3/

[337] Another case of a somewhat exceptional kind is where a party to a bilateral contract agrees to do certain things and to give security for his performance. Here it is manifest good-sense to hold giving the security a condition of performance on the other side, if it be possible. For the requirement of security shows that the party requiring it was not content to rely on the simple promise of the other side, which he would be compelled to do if he had to perform before the security was given, and thus the very object of requiring it would be defeated. /1/

This last case suggests what is very forcibly impressed on any one who studies the cases,--that, after all, the most important element of decision is not any technical, or even any general principle of contracts, but a consideration of the nature of the particular transaction as a practical matter. A promises B to do a day's work for two dollars, and B promises A to pay two dollars for a day's work. There the two promises cannot be performed at the same time. The work will take all day, the payment half a minute. How are you to decide which is to be done first, that is to say, which promise is dependent upon performance on the other side? It is only by reference to the habits of the community and to convenience. It is not enough to say that on the principle of equivalency a man is not presumed to intend to pay for a thing until he has it. The work is payment for the money, as much as the [338] money for the work, and one must be paid in advance. The question is, why, if one man is not presumed to intend to pay money until he has money's worth, the other is presumed to intend to give money's worth before he has money. An answer cannot be obtained from any general theory. The fact that employers, as a cla.s.s, can be trusted for wages more safely than the employed for their labor, that the employers have had the power and have been the law-makers, or other considerations, it matters not what, have determined that the work is to be done first. But the grounds of decision are purely practical, and can never be elicited from grammar or from logic.

A reference to practical considerations will be found to run all through the subject. Take another instance. The plaintiff declared on a mutual agreement between himself and the defendant that he would sell, and the defendant would buy, certain Donskoy wool, to be shipped by the plaintiff at Odessa, and delivered in England. Among the stipulations of the contract was one, that the names of the vessels should be declared as soon as the wools were shipped. The defence was, that the wool was bought, with the knowledge of both parties, for the purpose of reselling it in the course of the defendant's business; that it was an article of fluctuating value, and not salable until the names of the vessels in which it was shipped should have been declared according to the contract, but that the plaintiff did not declare the names of the vessels as agreed. The decision of the court was given by one of the greatest technical lawyers that ever lived, Baron Parke; yet he did not dream of giving any technical or merely logical reason for the decision, but, after stating in the above words the facts which were deemed material to the question [339]

whether declaring the names of the vessels was a condition to the duty to accept, stated the ground of decision thus: "Looking at the nature of the contract, and the great importance of it to the object with which the contract was entered into with the knowledge of both parties, we think it was a condition precedent." /1/

[340]

LECTURE X. -- SUCCESSIONS AFTER DEATH.

In the Lecture on Possession, I tried to show that the notion of possessing a right as such was intrinsically absurd. All rights are consequences attached to filling some situation of fact. A right which may be acquired by possession differs from others simply in being attached to a situation of such a nature that it may be filled successively by different persons, or by any one without regard to the lawfulness of his doing so, as is the case where the situation consists in having a tangible object within one's power.

When a right of this sort is recognized by the law, there is no difficulty in transferring it; or, more accurately, there is no difficulty in different persons successively enjoying similar rights in respect of the subject-matter. If A, being the possessor of a horse or a field, gives up the possession to B, the rights which B acquires stand on the same ground as A's did before. The facts from which A's rights sprang have ceased to be true of A, and are now true of B. The consequences attached by the law to those facts now exist for B, as they did for A before.

The situation of fact from which the rights spring is continuing one, and any one who occupies it, no matter how, has the rights attached to it. But there is no possession possible of a contract. The [341] fact that a consideration was given yesterday by A to B, and a promise received in return, cannot be laid hold of by X, and transferred from A to himself. The only thing can be transferred is the benefit or burden of the promise, and how can they be separated from the facts which gave rise to them? How, in short, can a man sue or be sued on a promise in which he had no part?

Hitherto it has been a.s.sumed, in dealing with any special right or obligation, that the facts from which it sprung were true of the individual ent.i.tled or bound. But it often happens, especially in modern law, that a person acquires and is allowed to enforce a special right, although that facts which give rise to it are not true of him, or are true of him only in part. One of the chief problems of the law is to explain the machinery by which this result has been brought to pa.s.s.

It will be observed that the problem is not coextensive with the whole field of rights. Some rights cannot be transferred by any device or contrivance; for instance, a man's right a to bodily safety or reputation. Others again are incident to possession, and within the limits of that conception no other is necessary.

As Savigny said, "Succession does not apply to possession by itself." /1/

But the notion of possession will carry us but a very little way in our understanding of the modern theory of transfer. That theory depends very largely upon the notion of succession, to use the word just quoted from Savigny, and accordingly successions will be the subject of this and the following Lecture. I shall begin by explaining the theory of succession to persons deceased, and after that is done shall pa.s.s to the theory of transfer between living [342] people, and shall consider whether any relation can be established between the two.

The former is easily shown to be founded upon a fict.i.tious identification between the deceased and his successor. And as a first step to the further discussion, as well as for its own sake, I shall briefly state the evidence touching the executor, the heir, and the devisee. In order to understand the theory of our law with regard to the first of these, at least, scholars are agreed that it is necessary to consider the structure and position of the Roman family as it was in the infancy of Roman society.

Continental jurists have long been collecting the evidence that, in the earlier periods of Roman and German law alike, the unit of society was the family. The Twelve Tables of Rome still recognize the interest of the inferior members of the family in the family property. Heirs are called sui heredes, that is, heirs of themselves or of their own property, as is explained by Gaius.

/1/ Paulus says that they are regarded as owners in a certain sense, even in the lifetime of their father, and that after his death they do not so much receive an inheritance as obtain the full power of dealing with their property. /2/

Starting from this point it is easy to understand the [343]

succession of heirs to a deceased paterfamilias in the Roman system. If the family was the owner of the property administered by a paterfamilias, its rights remained unaffected by the death of its temporary head. The family continued, although the head died. And when, probably by a gradual change, /1/ the paterfamilias came to be regarded as owner, instead of a simple manager of the family rights, the nature and continuity of those rights did not change with the t.i.tle to them. The familia continued to the heirs as it was left by the ancestor. The heir succeeded not to the ownership of this or that thing separately, but to the total hereditas or headship of the family with certain rights of property as incident, /2/ and of course he took this headship, or right of representing the family interests, subject to the modifications effected by the last manager.

The aggregate of the ancestor's rights and duties, or, to use the technical phrase, the total persona sustained by him, was easily separated from his natural personality. For this persona was but the aggregate of what had formerly been family rights and duties, and was originally sustained by any individual only as the family head. Hence it was said to be continued by the inheritance, /3/ and when the heir a.s.sumed it he had his action in respect of injuries previously committed. /4/

Thus the Roman heir came to be treated as identified with his ancestor for the purposes of the law. And thus it is clear how the impossible transfers which I seek to explain were accomplished in that instance. Rights to which B [344] as B could show no t.i.tle, he could readily maintain under the fiction that he was the same person as A, whose t.i.tle was not denied.

It is not necessary at this point to study family rights in the German tribes. For it is not disputed that the modern executor derives his characteristics from the Roman heir. Wills also were borrowed from Rome, and were unknown to the Germans of Tacitus.

/1/ Administrators were a later imitation of executors, introduced by statute for cases where there was no will, or where, for any other reason, executors were wanting.

The executor has the legal t.i.tle to the whole of the testator's personal estate, and, generally speaking, the power of alienation. Formerly he was ent.i.tled to the undistributed residue, not, it may fairly be conjectured, as legatee of those specific chattels, but because he represented the person of the testator, and therefore had all the rights which the testator would have had after distribution if alive. The residue is nowadays generally bequeathed by the will, but it is not even now regarded as a specific gift of the chattels remaining undisposed of, and I cannot help thinking that this doctrine echoes that under which the executor took in former times.

No such rule has governed residuary devises of real estate, which have always been held to be specific in England down to the present day. So that, if a devise of land should fail, that land would not be disposed of by the residuary clause, but would descend to the heir as if there had been no will.

Again, the appointment of an executor relates back to the date of the testator's death. The continuity of person [345] is preserved by this fiction, as in Rome it was by personifying the inheritance ad interim.

Enough has been said to show the likeness between our executor and the Roman heir. And bearing in mind what was said about the heres, it will easily be seen how it came to be said, as it often was in the old books, that the executor "represents the person of his testator." /1/ The meaning of this feigned ident.i.ty has been found in history, but the aid which it furnished in overcoming a technical difficulty must also be appreciated. If the executor represents the person of the testator, there is no longer any trouble in allowing him to sue or be sued on his testator's contracts. In the time of Edward III., when an action of covenant was brought against executors, Persay objected: "I never heard that one should have a writ of covenant against executors, nor against other person but the very one who made the covenant, for a man cannot oblige another person to a covenant by his deed except him who was party to the covenant." /2/ But it is useless to object that the promise sued upon was made by A, the testator, not by B, the executor, when the law says that for this purpose B is A. Here then is one cla.s.s of cases in which a transfer is accomplished by the help of a fiction, which shadows, as fictions so often do, the facts of an early stage of society, and which could hardly have been invented had these facts been otherwise.

Executors and administrators afford the chief, if not the only, example of universal succession in the English [346] law. But although they succeed per universitatem, as has been explained, they do not succeed to all kinds of property. The personal estate goes to them, but land takes another course. All real estate not disposed of by will goes to the heir, and the rules of inheritance are quite distinct from those which govern the distribution of chattels. Accordingly, the question arises whether the English heir or successor to real estate presents the same a.n.a.logies to the Roman heres as the executor.