CHAPTER XXXIII.

Of Fraudulent Conveyances; and of Contracts in general.

§ 1. PROPERTY is sometimes fraudulently conveyed. A debtor, to keep his property from being taken to pay his creditors, assigns it to some other person under the false pretence of securing a debt due to such person; the property to remain with the assignee, with the secret understanding that the assignee is never to take it into possession.

§ 2. To prevent such fraudulent conveyances and sales of property, the law declares, that all deeds of gift, and all transfers of goods and chattels, made by any person to secure them for his future use, shall be void, and shall not prevent them from being taken to pay his debts. As a sale or an assignment is more likely to be fraudulent when the property remains with the seller or assignor, than when the assignee takes it into his own possession, it has long been a general principle of law, that if property assigned or sold continues with the person pledging or selling it, the transaction is to be deemed fraudulent.

§ 3. This principle of the common law does not prevail to the full extent in every state. It has been held by courts in some states, and in others, of which is New York, it has been enacted, that if the person to whom a sale or an assignment is made, can make it appear that it is done in good faith, and without any intent to hinder, delay or defraud creditors, he may hold the property, although it remains with the seller or assignor. Another provision of the same law of that state requires, that the assignment or mortgage be delivered to the town clerk to be filed and kept in his office; and also that the mortgage be under seal, and renewed every year.

§ 4. The statutes of several of the states declare, that an agreement which is not to be performed within a year from the time it is made; and a special promise to pay the debt or answer for the default of another person, must be in writing. And a contract for the sale of any goods, chattels or 'hings in action, above a specified amount, is void, without

such writing, unless the buyer accepts and receives a part of the goods or of the evidences of them; or unless the buyer at the time pays some part of the purchase money to bind the bargain.

§ 5. Much that relates to contracts in general, is to be learned from the common law. To render a contract or bargain binding, there must be à legal consideration. By consideration is here meant the price, or any thing that is the cause or reason for which a person enters into an agreement. Thus the money paid or to be paid for a farm, is the consideration for which the seller grants it to the purchaser. There must also be a mutual promise of both parties, to make a bargain binding; but the consideration may be something else than money or property; it is sufficient if it is thing that is either a benefit to the party promising, or some loss or trouble to the party to whom the promise is made.

any

§ 6. A offers to pay B twenty dollars to-morrow, if he will deliver him twenty bushels of wheat. B brings the wheat, but A is not bound to take it and pay the price offered, because B did not on his part promise to deliver it. But if B had so promised, A would be bound to fulfill, because B has fulfilled on his part. The consideration in the case is the promise of each; and the party that fails to fulfill, is liable for the damage sustained.

§ 7. If you buy a horse to-day to be delivered to you tomorrow, and the horse should die before delivery, the loss is yours. The risk of accident to property is, in such cases, with the buyer. A buyer becomes the owner of property as soon as the contract is completed; but he is not entitled to take it into his possession till he pays or tenders the price, unless he has bought on a credit.

§ 8. An agreement to do what is impossible to be done, or what is unlawful; or an agreement that is made under some threat or fear, is not binding. Idiots are not bound by their contracts; nor are lunatics bound by any agreement made while they are insane.

§ 9. A person cannot give to another a title to what he does not himself own. A man buying a stolen horse cannot hold him, but must give him up to the owner. The thief, having no lawful title to the horse, could give no title. And if

the horse should be sold ever so often, the owner has a right to take him wherever he finds him, by proving him to be his; and each purchaser must look for redress to the person who sold him the property.

§ 10. Frauds are often committed in selling articles that are faulty or unsound. It is the general rule of law, that if the seller does not expressly warrant an article, or if there is no fraud on his part, the buyer must abide the loss if the article proves defective. But if the seller conceals the defect knowing it to exist, he is liable to make good the damage.

§ 11. There is much written in the books concerning contracts; but it is not easy to find a law to apply to every contract that may be made. Lawsuits are generally caused by the failure of persons to fulfill their engagements. If all would practise and encourage honest dealing, and endeavor to be faithful in discharging their obligations, there would be less need of studying the law of contracts; much money spent in lawsuits would be saved, and many unkind feelings between men would be prevented.

EXERCISES.

§ 1. Are assignments of property to avoid the payment of debts in any case justifiable?

§ 2. By what general declaration of law are such frauds designed to be prevented? What is to be deemed evidence of a fraudulent assignment or sale?

§ 3. How has this principle of common law been modified in some states ?

§ 4. In what cases here mentioned must contracts be in writing?

§ 5. What is meant by the consideration in a contract? What things are requisite to a contract?

§ 6. Give an example of the necessity of a mutual promise. Give one of your own.

§ 7. If property is sold and not delivered, with which party is the risk of accident?

§ 8. What agreements are never binding?

§ 9. What is necessary to giving another a good title to property? State a case.

10. What is the law concerning warranty?

§ 11. Mention some of the evils that result from lawsuits? Is it proper in all cases to seek redress at law for injuries received?

CHAPTER XXXIV.

Of Principal and Factor, or Agent; and of Lien.

§ 1. A principal is one who employs another, as agent, to transact his business. A factor is an agent; but the word factor is generally understood to mean a commercial agent; that is, one who is employed by merchants residing in a distant place, to buy and sell, and transact business for them. Thus, country merchants send their wheat, pork, pot-ashes, and other country produce, and millers send their flour, to their agents in the city of New York, to be disposed of. The owners of the property are called principals; their agents are factors, or, as they are more frequently called, commission merchants. As receivers of property consigned to them, they are also called consignees, and the persons who consign or commit to them their property, are consign

ors.

§ 2. For the accommodation of the principal, the factor sometimes pays him a part of the value of the produce before it is sold. For the money thus advanced, the factor has a claim upon the property until the advance money shall be refunded, and all charges against the owner paid. And as a factor does not always know who is the actual owner, the person in whose name the goods are shipped, is to be deemed the owner.

§3. This claim which a factor has upon goods intrusted to him for sale, is called lien; and the factor may sell the goods, and retain out of the proceeds of the sale what is que him; and the remainder he must pay to the principal,

or owner.

§ 4. But a person cannot sell or pledge property committed to him for transportation or storage only; nor can a

factor pledge goods intrusted to him for sale, as security for his own debts. A factor who disposes of any merchandise intrusted or consigned to him, and applies the avails to his own use, with intent to defraud the owner, may be punished by fine and imprisonment.

§ 5. How far, in ordinary business, a principal is bound by the acts of an agent, it is not easy to determine. As a general rule, however, a general agent, that is, one who transacts either all kinds of business for his employer, or business relating to some particular department, binds his employer or principal, by his acts, so long as he keeps within the general scope of his authority, even though he were expressly instructed not to do a particular act.

§ 6. But if an agent is employed for a special purpose, the principal is not bound by the act of the agent, if he passes the limits of his power. If you employ a man to go out and purchase a horse for you, without giving him authority to do any thing else, and if he buys a horse and a wagon, you are not bound to pay for the wagon, because the agent had power only to buy the horse.

§ 7. If an agent buys in his own name, he is himself liable; and although he does not disclose the name of the principal, the principal also is bound, if the goods come to his use, but not otherwise.

§ 8. A lien, as has been stated, is the claim of a factor or agent upon property in his possession, as security for the payment of his charges. This right of lien extends to others than factors. It is intended also for the benefit of manufacturers and mechanics, and other persons carrying on business for the accommodation of the public.

§ 9. A merchant has a lien upon goods sold till the price is paid, if no credit has been stipulated for; and even when he agrees to give a credit, if the purchaser practises fraud in obtaining the goods, the seller may take them. These cases differ, however, from ordinary cases of lien, as the purchaser has not, in reality, acquired any lawful right to the property; and the merchant may dispose of the property as his own, which cannot be done in other cases.

§ 10. A shoemaker receiving leather to manufacture into shoes, may retain the shoes until he is paid for the making;