Сн. 1. Art. 2. ART. 2. Nature and forms of contracts and agreements. § 1. A contract is nothing more than an agreement reduced to writing, though we often speak of parol or verbal contracts. Strictly speaking, while terms settled by the parties rest in words only, they constitute an agreement; when that is reduced to writing, it becomes a contract; and that, when sealed, becomes a deed; and though the substance, reason, and intent of every one is thus the same, namely, to secure a right; and the main question, on each, is and must be the same; that is, what did the parties mean, what right did they mean to secure; yet as the rights of property and of persons, and the wants of mankind are almost innumerable, and these are to be secured or supplied, mainly by their contracts, these, to answer their various purposes, must, necessarily, be almost infinitely various in forms and terms, as the wants to be supplied, or the property or service to be transferred, rendered or received may require; and the different forms allowed by law even to effect the same purpose, very much increase the variety. $2. A proper consideration is the basis of each contract or agreement, and if such a consideration is not expressed, understood, or implied, there is no contract the law will enforce. Fraud renders every one null and void, tainted by it. And no fraud is so covered or protected in equity, and even at law, as not to be inquired into. Security is the end of every contract and agreement, but the particular object to be secured by any particular one, is a creature of the moment. But if executed, it secures a right or interest only to be defended. No action will be necessary to recover it. If executory, or to be executed, the act to be done, usually falls into some known class; as to convey lands or goods to one or to many, for years, for life, or in fee, by delivery, by deed, or by will, &c. to serve as an apprentice, a sailor, or a servant, &c. to pay wages, freight, insurance and the like: so the law and practice, usually introduces and settles certain well known forms of contracts, adapted to each description of acts to be done by force of them. Hence each species of formal contracts is settled with reference to the thing to be done, and the kind of acts, the one to be done, belongs to; and so is the law and practice, generally, in regard to acts stipulated not to be done. Therefore, it is that each species of formal contracts has its own peculiar properties, separately to be considered in the subsequent pages; and each generally will be considered as the ground of action, and as the security of rights; and the nature of the actions and proceedings in them' will accord with the kind of contract of each description. But there are certain general rules as to considerations, construction, &c. common to all of them. As all contracts must be valid or invalid when made, they can never depend on after contingencies, except the taking effect of one may be suspended until an event shall happen, but this event, or fact, must be such as would have made the contract complete, if existing when made. And this event must happen in legal time. 3. The amount or adequacy of the consideration. Although as between the parties to a contract the law does not weigh the quantity of the consideration, but deems a peppercorn sufficient in a contract of any amount, yet the law is otherwise as to third persons, (and equity is clearly so,) who are affected by the contract, as creditors of the contractor, and fair purchase of the same property. As to them there must be a consider. tion reasonably adequate, as a fair price honestly paid; and even between the parties, at law, the smallness of the considertion may be evidence of fraud, or of imposition, or of undue advantage taken. Indeed, the mere inadequacy of price, alone considered, and as no evidence of mistake, misconception, or undue advantage, does not weigh, but if this inadequacy be considerable, as half the value only, &c. it is held even as between the parties as sufficient evidence of misconception or undue advantage. See James or Jones v. Morgan, and Heathcote's case, ch. 139 a 7, 2, 3; 2 Pow. on Con. 154 to 161, ch. 32 a 13, 2, and sundry cases there cited. §4. What is a private contract, and so a private right or property, which cannot be taken away by legislative power. There have been no rights in our country so often invaded, for near two centuries, by numerous legislatures, as the rights secured by private executory contracts; that is, debts owed; and privileges secured by private charters in the nature of contracts: under the pretence of the public good, and to favour embarrassed debtors, these rights and privileges have been often attacked and violated, notwithstanding all the charter and Constitutional provisions introduced in better times, to protect such rights and privileges: the direct tendency of such measures has been to deprive individuals and private corporations of their property and privileges, and to produce express provisions against their repetition; therefore, in July 1787, Congress unanimously introduced into the ordinance for the government of the Western country, the following clause: to wit, "and in the just preservation of rights and property, it is understood and declared, that no law ought ever to be made, or to have force in the said territory, that shall in any manner whatever, interfere with, or affect private contracts or engagements, bona fide, and without fraud, previously formed." Soon after, a clause more concise, and of broader meaning, but of the same spirit, was made a part of the Federal Constitution, and adopted by the American people without opposition; as CH. 1. Art. 2. CH. 1. to the ordinance, the question has been, what is a private contract; as to the constitution, what is a contract, a state legislature is not allowed to impair. On this subject will be found in the subsequent pages some of the most important judicial decisions in our country. It has been correctly observed, that this clause includes the word contract, generally and that it cannot be confined (as some urge it must) to bills of credit, ex post facto and tender laws, because these are expressly provided against in the same section; the only reasons recollected for not giving the word "contract" its usual meaning in this section, that is, as meaning a convention to do or not to do something. There are two kinds of private contracts; 1, those made by individuals and private corporations; 2, where the public, as the state, is one party, as when it creates a corporation to hold and manage private property, or funds for private, or even general charities, as for the benefit of an indefinite multitude, whether persons infirm, poor, to be instructed in literature, civilized, christianized, &c. Here is a contract, and the incorporating power is merely a party to it, and cannot alter it without the consent of the private donors, or of those they entrust to manage and apply their funds in the manner settled in forming the body politic. These considerations lead to the material distinction there is, in the fifth place, between incorporations for charitable and political purposes. When created for political purposes, as counties, towns, &c. the incorporation is a mere organization of political powers, as a part of the public government. In such cases the incorporating power enters into no contract; so far is not a party to one, but may alter and modify, at discretion, as the practice invariably has been. A statute, in such cases, incorporating a town, or any body politic, really a part of the political government of the state or nation, is not a contract or grant, but the statute enacts a law, ordains and establishes a rule of conduct, alterable at the discretion of the incorporating power, still this power may vest in towns, &c. rights it cannot vary, as for instance, a corporate capacity to purchase, hold, and sell lands, and in this capacity a town actually holds lands; as to these there is a contract, for there is an implied engagement by the incorporating power, not to touch these lands without the town's consent, except to tax them. This engagement results from the spirit of the government, whenever one of its principal objects is to protect and secure private property and rights to their legal owners; and whenever the incorporating power is not despotic, but is only a power delegated by the people with restrictions, the safeguards of private right and property. CH. 1. Art. 3. ART. 3. The execution. §1. Every exchange is executed at the time the verbal agreement, or written contract, is carried into execution, and has its effect; and, therefore, can never be the object of legal compulsion. None can be the object of this How far acts of incorporacompulsion, except those made to secure the performance of tion are consome future act; and then, in the nature of things, to convey tracts, &c. See Corporaor transfer property, as lands or goods; render services, or tion, espepay monies, in fixt or reasonable quantities. The intent of cially ch. 143 every contract is the same, that is, to bind one party to trans- a. 3. fer or pay, and to give the other a right, in law, or equity, to enforce the performance, so that he shall receive the money, or effects, according to their meaning. $2. When one detained the goods of another, and which the latter had a right to have, the first and obvious remedy was, an action of debt or detinue, wherein the plaintiff stated his right to the thing, which he alleged the other unjustly detained: if goods or debt the defendant owed as the representative of another, he was considered as detaining the one or the other, or if he owed the debt himself, in his own right, he was viewed as owing and detaining, and to be called upon to render what he owed and unjustly detained. Hence, there has ever existed, in different nations, the distinction between charging one in the debet and detinet, and in the detinet only. In a larger sense, a man may be bound to pay in money, property, or labour. Before money was used, he could be held to pay but in the two last, but since the general measure of all property, an acknowledged currency, has been used, payment has been understood in a more limited and appropriate sense, as a payment in money. The precious metals properly stamped, have most generally been adopted as this common measure. When a common representative of all property and services is thus established, it usually becomes the course of business, for the proprietor to sell the one, or yield the other, for a quantity of these metals, he is to receive of the purchaser, at the time, or afterwards, as the just equivalent for the thing parted with. This quantity must be fixed by the parol agreement, or written contract; or it must be a reasonable quantity left to be ascertained by third persons, referees, judges or jurors. Where one agrees to pay the other a certain sum, as the price of labour or goods, a debt arises, and the payer is a debtor and the receiver creditor. And the latter in an action of debt, recovers this precise sum; and often with damages for the detention of it, after the pay-day fixed upon, or after a legal demand of payment, where no such day is named. But when the sum is not thus fixed and certain, nor capable of being reduced to a certainty by calculation, made on given data, but sounds only in damages, the creditor does not recover a debt, but only Сн. 1. damages (and costs ;) therefore, when the party agreeing or contracting to render to another, lands, goods, or a reasonable sum of money, fails to perform, the other can only sue for and recover damages to be fixed by a jury. In expounding a contract, the place where made must be considered, unless the parties have a view to another government, as when a bill was drawn in France, payable in England, it was held that it was governed by English law, because, originally intended to be carried into effect in England, but secus if payable in France. This rule applies to the nature and construction of contracts, not to the mode of enforcing them. Hence a contract made in Madeira under Portuguese law, between two Portuguese subjects, where a debtor's body is not liable, was enforced in N. York by her law, and the deft. held to bail. 2 Johns. R. 198, 220, Smith v. Spinolla, and cases cited 7 John. R. 117, 118. ART. 4. Contracting parties. §1. There must be two at least ; and these must be able to contract either expressly or by legal Cooke's B. implication. Their contract may be executed, as where two 522-2 H. Bl. agree to exchange horses, and do it immediately, this conveys 553-8 Johns. a chose in possession, and is like a grant that transfers the R. 189-2 Bl. right and possession together; or it may be executory; as if Com. D. 411. they agree to exchange next week. This conveys only a chose -Co. L. 172. in action. Here the right only vests. It is of the very essence Aliens of a contract to the parties consent. To this end they must have a physical, a moral power to do it, and a free exercise. of this power, and actually exercise it in deed, or in contemplation of law. 1 W. Bl. 259. Robinson v. Law 373, Com. 442-1 New.on Con. L. 31, 32.- In what sense. See Baron and Feme. 2. Hence idiots, lunatics, and persons non compos mentis, or distracted, not having reason to assent, cannot contract; and their contracts are void ab initio; and may be shown to be so on the general issue in some cases, and in others on special pleading; but if a man be legally compos mentis, be he wise or unwise, he is bound by his contract; yet, however, if a contract be obtained from a weak man, by any fraud, practice, breach of trust, or unfair means, it may be avoided, not on account of his incapacity, for the law deems him capable, but by reason of this practice with him, which is considered as evidence, and often, as proof of deceit and imposition: and in weighing the evidence the judges will notice that less art will deceive a weak than a sensible man. A feme covert has no power to contract, or assent, and her contract is wholly void, except in a few special cases, in which the law allows her to act as a feme sole, or as under the protection of the court. Persons under duress cannot contract or assent. If minors contract, except for necessaries, they may avoid their contracts, or confirm them when they come of age. (If a contract be void or only voidable is yet unsettled in several cases.) |