655. Interest, when allowed. 656. Damages for breach of promise to marry. 658-669. Construction of agreements. 660. General rules of construction. 662-669. Implied consequences of agreements. 666. Usage. 667. Construction aided by law. 670. Effect of agreements as to third persons. 571. The next mode of acquiring a derivative title to property is by contract or by obligations arising from agreements. This is the most important and most frequent way of acquiring title to property. The variety of agreements is very great, their kind is extremely varied, the rules which concern them are very extended, and very different from each other in the several kinds of contracts. There are some rules, however, which apply to all kinds of contracts. 572. Various definitions have been given of the word contract, either of which perhaps conveys the true idea of the word. A contract, according to Pothier,1 is a convention or agreement by which two or more persons consent to form, between themselves, some lawful and binding engagement, or to rescind a preceding one, or to modify it. Blackstone defines it to be an agreement upon a sufficient consideration to do or not do a particular thing. A contract has also been defined to be a compact between two or more persons. Chief Justice Marshall says, "A contract is an agreement in which a party undertakes to do, or not to do, a particular thing." 994 This seems a complete definition. The consideration does not enter into the definition, for contracts under seal are good without consideration. The requisite that it should be written only applies to certain kinds of contracts. 3 573. Every contract imposes upon the contractor an obligation to do or to give something according to the law of the land. All obligations derive their force from the law, and therefore every obligation supposes a superior law which binds us to the performance. It is owing to this that the rule has been established that a lawful contract is considered as the law of the parties. 574. The intent of a contract is to form an obligation or engagement. In the engagement which arises from a contract we may distinguish two things very different in themselves, namely: The obligation of him who makes the promise and who fulfils a duty in executing it. The right of him who accepts the promise. The right consists in the faculty of enforcing the fulfilment of the promise in a court of justice. Duty and right, then, are correlative, and cannot exist without each other. One cannot be obligated or bound by the contract if another cannot enforce him to accomplish his obligation or engagement. 575. He toward whom the obligation has been contracted is called the obligee or creditor, and he who is bound to fulfil it is the obligor or debtor. 576. Having given some general rules relating to contracts, it will be proper now to examine the conditions essential to their validity. They are: the consent of the party who obligates himself to become bound, and the consent of the party toward whom the obligation is formed to accept it; the capacity of 23 Sharswood, Blackst. Comm. 442. 1 Pothier, Obl. n. 3. Fletcher v. Peck, 6 Cranch 136; see La. Civ. Code, art. 1754; Code Civ. 1101; 1 Powell, Contr. 6. * Sturgis v. Crowninshield, 4 Wheat. 197. the parties; a thing which is the object of the agreement; and a lawful consideration for the obligation. There are some general rules as to the forms of contracts, but they are not always requisite to be observed in order to their validity; form frequently is of little consequence, and substance is every thing. There is a great difference between an agreement in writing, a deed, for example, and the contract which it is intended to secure. The deed may be perfectly formal and good and the contract may be absolutely void; as, where a man's bond is obtained by fraud, the bond may be good, and, on account of duress or fraud, the contract may be void. This distinction must always be kept in view in considering all contracts. And, on the other hand, the agreement may be good and the instrument to secure its performance may be imperfect; as, for example, when a man lends another a sum of money which is to be secured by bond, and it is to be returned in one year, and the paper intended as a bond has not been sealed. 577. Consent is an agreement to something proposed by another; it differs from assent, which is an acquiescence in something that has been done." In a contract two things may be distinguished, the proposition or offer by one of the parties and the acceptance by the other: duorum in idem placitum consensus. The contract begins by the offer or proposition, it is completed by the acceptance. 578. The party who makes the offer has a right to recall it until the other has acquired a right to prevent him, and in general this right can be acquired only by acceptance. Although the will of the owner is sufficient to divest him of his right, that alone has not the effect to transfer it to another. It is by the acceptance of the offer that there is a union of minds, an agreement. If no time is prescribed within which the offer is to be accepted, it will be considered as withdrawn or rejected unless it is accepted within a reasonable time. What is a reasonable time must depend on the circumstances of each case.7 But from the moment of the acceptance of an offer, the will of the person who offered, who till then was free to retract his offer, is irrevocably bound by necessity: contractus sunt ab initio voluntatis, ex post facto necessitatis. When the acceptance of an offer is made without condition, the contract is complete; but when it is made with a condition, in general there is no binding contract. For example, I offer to sell you a thousand bushels of wheat, at a certain price in cash, and you accept my terms, but on condition that I will take a good endorsed note at sixty days, there is no contract between us.' But there are some cases where, although the offer and the acceptance be not the same, yet there is a valid contract: for example, A, a merchant of Philadelphia, writes to B, a merchant in Cincinnati, and offers him four cents per pound for one hundred barrels of pork, and, on the same day, B writes to A, offering to sell him one hundred barrels of pork at three cents and a half per pound, and the letters, which cross each other, are received by the parties, the contract is complete, and A shall pay B three and a half cents per pound, for the greater includes the less.10 579. The acceptance may be made by a separate paper, as between parties Wolffius, Inst. Jur. p. 1. ? 27, 30; Pardessus, Dr. Comm. n. 138. Tucker v. Wood, 12 Johns. N. Y. 190; Bower v. Blessing, 8 Serg. & R. Penn. 243; Craig . Harper, 3 Cush. Mass. 158; Beckwith v. Cheever, 21 N. H. 41; Smith v. Gowdy, 8 All. Mass. 566. Loring v. Boston, 7 Metc. Mass. 409; Averill v. Hedge, 12 Conn. 424. Mactier v. Frith, 6 Wend. N. Y. 103. Tuttle v. Love, 7 Johns. N. Y. 470; Eliason v. Henshaw, 4 Wheat. 225; Bruce v. Pearson, 3 Johns. N. Y. 534. 1 Pothier, Vente, n. 26; Brown, Sales, 223. who are separated and contract by letter, and questions arise to when the acceptance is complete, whether immediately upon its being made, or whether it must be communicated to the other party. The rule is, that it must be communicated to the party offering." The contract is completed from the time the offer is accepted, and not from the time the acceptance is made known to the party making the offer. Thus, if A send an offer by mail to B, who sends back an acceptance by mail, the contract is complete, although A revokes the offer after B has mailed his acceptance, and before A has received it.12 580. But the consent to bind the parties need not be express in all cases, it may be implied. It may be manifested by signs, by acts, or even by silence. A nod, a shake of the hands, have always been signs of consent; indeed, there is a contract which, owing to its being consummated in this manner, is called a handsale: venditio per mutuam manuum complexionem." And silence, when a man is bound to speak, gives consent.1 581. When there is a mistake, either as to the person or the thing which is the subject of the contract, it is evident there is no agreement. When the error is respecting the substance of the thing which is the subject of the contract, the agreement is null,15 but when it falls merely on a quality of that thing, the contract is valid. It is not in general the quality, but the substance of the thing which is the object of the agreement. But there are some qualities which are considered as forming the substance of the thing; as for example, if I sell you a gold watch, both of us believing that the watch shown you is of gold, you are not bound to take the watch if it be only copper gilt over. 16 By the civil law error annuls the agreement, not only when it affects the identity of the subject, but also when it affects that quality of the subject which the parties have principally in contemplation, and which makes the substance of it.17 It is evident that the case of the gold watch turns on the question whether the buyer buys the particular watch, taking the risks, or buys it as a gold watch. It will in most cases be a question of fact for the jury to say whether the article intended by both parties was delivered.18 582. By duress is meant an actual or threatened violence or restraint of a man's person contrary to law, to compel him to enter into a contract, or to discharge one. Violence and duress annul the consent; it is evident that there is no consent when physical violence has been used over a person to constrain him to do an act. The constraint is generally only moral; it acts on the will, which it determines to choose between two evils. A robber meets me on the highway; with a pistol at my breast, he requires my purse or my life. I have the choice of refusing my purse and exposing my life, or vice versá; but still my choice is "Thayer v. Middlesex Ins. Co., 10 Pick. Mass. 326; 4 Wheat. 225; McCullock v. Eagle Ins. Co., 1 Pick. Mass. 278; Slaymaker v. Irwin, 4 Whart. Penn. 369. 12 Tayloe v. Merchants' Ins. Co., 9 How. 390; Mactier v. Frith, 6 Wend. N. Y. 103; Hutcheson v. Blakeman, 3 Metc. Ky. 80; The Palo Alto, Dav. Dist. Ct. 343; contra McCullock v. Eagle Ins. Co., 1 Pick. Mass. 278. 13 2 Sharswood, Blackst. Comm. 448. 14 Moore v. Smith, 14 Serg. & R. Penn. 393; 1 Greenleaf, Ev. ?? 197, 198, 199. 15 Hitchcock v. Giddings, 4 Price, Exch. 135; Allen v. Hammond, 11 Pet. 63; Pothier, Vente, n. 4. 16 1 Pothier, Obl. n. 18. See Williams v. Spafford, 8 Pick. Mass. 250; Gardiner v. Gray, 4 Campb. 144; Shepherd v. Kain, 5 Barnew. & Ald. 240; Chandelor v. Lopus, Croke, Jac. 4. 171 Pothier, Obl. 3d Am. ed. 113. 18 See Merriam v. Wolcott, 3 All. Mass. 258; Gardner v. Lane, 9 All. Mass. 492; Alexander v. Owen, 1 Term, 225. not free, for, left free, I would choose neither alternative. The constraint was therefore absolute. 583. The duress may be in several ways, by imprisonment, per minas, or perhaps even duress of goods. Duress by imprisonment is where a man actually loses his liberty; when the imprisonment is unlawful, it is evident that the constraint is such that it will avoid the contract.19 But if a man be lawfully imprisoned, it is no reason for avoiding a contract in other respects fair, although the prisoner may enter into it to obtain his liberty." But a contract will be avoided for duress if the party is arrested on a process regular and legal in form, but sued out maliciously and without probable cause.21 20 Duress per minas is a well-grounded fear of loss of life, or mayhem, or loss of limb, or imprisonment." It seems that threats of assault or to destroy property do not amount to duress,23 but the tendency of the courts is towards the ruling that such threats do avoid a contract.24 In South Carolina duress of goods, under circumstances of great difficulty, will avoid the contract; 25 but this may be doubted. But if one pay money to recover his goods, unlawfully detained, he may recover, it back.26 584. The duress that will avoid a contract must be practiced upon the party contracting, and if two make a contract, one being under duress, the contract is good against the other.27 28 Husband and wife being one, duress upon one will avoid the contract of the other, and the contract will be avoided although it is not for the benefit of the party practicing the duress.29 585. Fraud is any trick or artifice employed by one person to induce another to fall into an error, or to detain him in it, so that he may make an agreement contrary to his interest or prevent him from making one favorable to himself. Fraud is a ground for annulling an agreement, and it has much analogy with the preceding, particularly with error or mistake. Violence produces fear, which destroys consent for want of freedom; fraud induces error, which prevents consent from the beginning; for there can be no valid consent when it has been given by mistake or surprised by fraud. If an error annuls an agreement, much more must fraud have that effect. There then exists a double motive for doing so: the error which induced the appearance of a consent when it never existed; and the principle of justice which requires every one to repair the damage he has caused to another by his act, and which deprives him of the right to accept of a promise extorted by his artifices. The test of fraud is an intention to deceive.30 Intentional falsehoods are regarded as fraudulent when they induce the other party to do something by which his interests are injuriously affected. But in our law the maxim of the civil law prevails, simplex commendatio non obligat, 19 Stouffer v. Latshaw, 2 Watts, Penn. 167; Tilley v. Damon, 11 Cush. Mass. 247. Shepherd v. Watrous, 3 Caines, N. Y. 166; Watkins v. Baird, 6 Mass, 506. Richardson v. Duncan, 3 N. H. 508; Severance v. Kimball, 8 N. H. 386; Hackett v. King, 6 All. Mass. 58. 22 "1 Blackstone, Comm. 131; 2 Inst. 438; 2 Rolle, Abr. 125; Bacon, Abr. Duress, Murder A.; Foss v. Hildreth, 10 All. Mass. 76. Maisonnaire v. Keating, 2 Gall. C. C. 337. See 2 Starkie, Ev. 4th Am. ed. 482; Chitty, Contr. 10th Am. ed. 219; Foshay v. Fer guson, 5 Hill, N. Y. 158. Sarportus v. Jennings, 1 Bay, So. C. 470; Collins v. Westbury, 2 Bay, So. C. 211. * Elliott v. Swartwout, 10 Pet. 137; Cobb v. Charter, 32 Conn. 358. Robinson v. Gould, 11 Cush. Mass. 55; M'Clintick v. Cummins, 3 McLean, C. C. 158 "Eadie v. Slimmon, 26 N. Y. 9. 29 Pand. lib. iv. tit. 2. Sheppard, Touchst. 61. For the cases in which equity will relieve on account of fraud, see No. 3838, et seq. and it is not fraudulent for the seller to use ordinary language of recommendation of his goods, for the buyer ought not to rely implicitly on this.31 Fraud may be either suggestio falsi or suppressio veri. But all concealment is not necessarily fraudulent, and neither party is obliged to disclose to the other facts which both have an equal opportunity of discovering.32 586. Fraud is also divided into actual or positive fraud and constructive fraud. A positive fraud is the intentional and successful employment of any cunning, deception, or artifice to circumvent, cheat, and deceive another.33 Constructive fraud arises from a contract or act, which, though not originating in evil design and contrivance to perpetuate a positive fraud or injury upon other persons, yet has a necessary tendency to deceive and mislead, or to violate public or private confidence, or to impair or injure public interests, and is deemed equally reprehensible with positive fraud, and therefore is prohibited by law as within the same reason and mischief as contracts and acts done malo animo.3 34 587. Having considered what kind of consent is required in order to make a binding contract, it seems proper to inquire next into the capacity of the contracting parties. To be enabled to contract, the party must be of sound mind, in a state to give his consent with discernment, freedom, and reflection. All persons generally can be parties to contracts, unless they labor under some disability and are declared incapable by law. Some incapacities arise from nature, as in cases of infancy, idiocy, lunacy, or a want of understanding. The law merely gives certain rules to determine and apply them. Other incapacities are created by law, and do not arise from nature; such are the incapacities of married women, of trustees with regard to buying trust property. This subject is naturally divided into three classes of cases: where the parties want understanding; where they have understanding, but in law are considered as wanting freedom to exercise their will; where they are forbidden to contract because of some rule of policy of the law. 588. The contracts of idiots and lunatics are not binding, because they are unable from mental infirmity to form an accurate judgment of their actions, and consequently can give no serious consideration to their engagements. 35 Contracts made with lunatics, after they have been so found by inquisition upon proceedings before a competent tribunal, are absolutely void.36 As to contracts made anterior to such finding, which generally states the time when the lunacy commenced, they are presumed to be valid; they are not void, but voidable.38 37 But the contract of a man of weak mind is binding on him, when no advantage has been taken of him, and there has been no fraud in the transaction.3 39 31 Page v. Parker, 43 N. H. 368; Veasey v. Doton, 3 All. Mass. 380; Hemmer v. Cooper, 8 All Mass. 334; Phipps v. Buckman, 30 Penn. St. 401. 32 Laidlaw v. Organ, 2 Wheat. 178; 1 Story, Eq. Jur. ?? 204-208; Harris v. Tyson, 24 Penn. St. 347. 83 1 Story, Eq. Jur. ? 186; Dig. 4, 3, 1, 2; Dig. 2, 14, 7, 9. 34 1 Story, Eq. Jur. 22 258-440. 35 Newland, Contr. 19; 1 Fonblanque, Eq. 46, 47; Highmore, Lun. 111; Webster v. Woodford, 3 Day, Conn. 90; Rice v. Peet, 15 Johns. N. Y. 503; Mitchell v. Kingman, 5 Pick. Mass. 431. 36 Pearl v. McDowell, 3 J. J. Marsh. Ky. 658. 37 Lee v. Lee, 4 M'Cord, So. C. 183; Jackson v. King, 4 Cow. N. Y. 207. 38 Jackson v. Gremaer, 2 Cow. N. Y. 552; see Hutchinson v. Sandt, 4. Rawle, Penn. 234. 39 Dods v. Wilson, Const. So. C. 448. |