The kinds of property with which business is chiefly concerned are corporeal movable objects and choses in action. The former are goods, wares, and merchandise; the latter are negotiable instruments, stocks and bonds, mortgages and liens, and debts in general.

6. Legal obligations. Legal obligations are those which the law enforces. They arise either by agreement or by the policy of the law, independent of an agreement.

1. Contract. An agreement enforceable at law we call a contract, and the failure or refusal to carry out the agreement we call a breach of contract.

Example: 1. A agrees with B that A shall sell and B shall buy A's bicycle for $30. This is a contract. If either party refuses to carry out his part of it, the other has a case at law for damages.

Contracts have to do with a great variety of interests, and many special kinds of contracts may be enumerated, such as contracts of sale, contracts of bailment, contracts of carriage, contracts of insurance, contracts of partnership, contracts of guaranty, contracts for the loan of money, and the like.

2. Tort. The obligations fixed by private law independent of agreement have no specific names, but the breach of any of these obligations is called a tort, which is simply the French word for wrong. Many of these torts have specific names.

Examples: 2. A strikes B in anger. A has committed the tort called assault and battery.

3. C goes without permission on D's land. C has committed the tort called trespass.

4. E speaks false and malicious words derogatory to F's character. E has committed the tort called slander. If E writes the words, the tort is called libel.

5. G drives so carelessly in the street as to run into and injure H's carriage. G has committed the tort known as negligence.

In each of the above cases the wrongdoer was under an obligation fixed by the law not to infringe the personal security or property rights of another to his damage, and to use due care for the safety of others and their property. The violation of this obligation constitutes the tort.

Where, in the formation of a contract, one party knowingly makes a false representation to the other, a tort is committed. Where, after a contract is made, a stranger to it induces one of the parties to break it, a tort is also committed.

Examples: 6. A wishes to sell sheep to B. He tells B that they are sound and healthy. He knows they are diseased. B buys the sheep and afterwards discovers that they are diseased. (a) There is a contract between A and B. (b) There is a tort, known as deceit, committed by A. 7. A agrees to work for B. X, knowing this, induces A to break the contract. X has committed a tort which has no very specific name. It is called "inducing breach of contract,” or, in this form of contract, " enticing away a servant."

3. Quasi-contracts. In certain cases where there is no true contractual agreement, the law, by reason of some act or situation of a party, imposes an obligation upon him and gives a remedy against him, as if, in fact, his obligation did arise from agreement. In order to prevent injustice and to give an efficient remedy, the law indulges in such cases the fiction that a promise was made, and permits an action in contract. These cases are called quasi-contracts because they are like contracts, although not true contracts.

Examples: 8. A steals B's money. B may recover the money in a contract action, there being by fiction of law an implied promise to repay it.

9. C by mistake pays D more than he owes. C may recover the excess in a contract action. The law implies a promise by D to return the overpayment.

10. E is a lunatic, known to be one, and incapable of making a contract. F furnishes E with necessary food. F may recover the reasonable value of the food in a contract action. The law creates the promise of the lunatic to pay for necessaries.

4. Trusts. A trust is an obligation of one who has the legal title to property to account for it to one who has the beneficial or equitable interest. Trusts are not recognized or enforced by the courts known as the law courts, but by the courts known as the equity or chancery courts. These courts are explained in the next section. Law courts recognize only legal titles and interests, but equity courts recognize equitable titles and interests.

Example 11. B conveys or wills his farm in trust to C to receive the rents and income and pay the same over to D. This is a trust. D's rights are not recognized by the law courts, but the equity courts recognize and enforce D's rights and compel C to account to D for the rents and income. The so-called "trusts" referred to in current economic discussions are not now trusts in the above sense, but are simply monopolistic combinations. Originally stockholders in various corporations placed their shares in trust with a committee, and the total profits of all the corporations were divided among the various stockholders pro rata, thus constituting a real trust. But it is now the custom to unite all the corporations into one corporation, in order to eliminate competition. This does not create a true trust, but the old name continues to be used to describe the new monopolistic device.

7. Courts. The courts of a particular state may consist of law courts and equity courts, although in modern times these are often combined. The United States has also an admiralty court, or rather a court with admiralty jurisdiction.

1. Law courts. Law courts are organized tribunals for the trial of cases and the hearing of appeals. Each state has trial courts and at least one court to which appeals may be taken. Trial courts consist of a judge and a jury, with attendant officers. Appellate courts consist of a bench of judges without a jury.

The trial courts are generally the following.

(a) A court of general jurisdiction is one before which most cases may be brought. This is usually called a circuit court, because the judges go on circuit from place to place to hold trials.

(b) Courts of limited or local jurisdiction are for the trial of smaller cases; such are county courts, city courts, and courts held by justices of the peace.

(c) Courts for the administration of the estates of deceased persons are called the surrogate's court, probate court, orphans' court, etc.

The appellate courts are those to which appeals are taken from the trial courts. Most states call the appellate courts the Supreme Court. In New York, however, the highest appellate court is called the Court of Appeals, and the trial court of general jurisdiction is called the Supreme Court. Owing to the

large amount of appellate work, some states have an intermediate appellate court. In New York this is called the Appellate Division of the Supreme Court.

In the federal jurisdiction the trial courts are the District Court and the Circuit Court; the intermediate appellate court is the Circuit Court of Appeals, and the highest appellate court is the Supreme Court.

2. Equity courts. Side by side with the common law courts there grew up in England a separate court known as the equity court or the chancery court. This court consisted of a judge without a jury, and was intended to give relief in hard cases where, by the somewhat rigid rules of the common law courts, none could be had. A body of rules or doctrines evolved by this court is known as "equity." Equity consists, therefore, of the rules and doctrines by which equity courts are controlled in the administration of justice.

In a few of our states such separate equity courts still exist; but generally the powers of a common law court and of an equity court have been combined in one court which administers both law and equity. In such case the court of general jurisdiction is both a common law and an equity court. If one wished to sue for breach of contract or for an accounting for a trust, he would go before the same court in the contract case the judge with a jury would administer law rules; in the trust case the judge without a jury would administer equity rules.

3. Admiralty courts. Admiralty courts administer still a different law, known as the admiralty law or law of the sea. They have to do with vessels and their cargoes and crews upon public navigable waters. There is no separate court of admiralty in the United States; the District Courts of the United States have admiralty jurisdiction and administer admiralty law. State courts have no admiralty jurisdiction. An admiralty court consists of a judge without a jury. The judge is the trier of the facts as well as the administrator of the law.

8. Procedure. A case is brought before a court by pleadings. The plaintiff makes a complaint or declaration, setting out his

cause of action, and a summons to appear and answer this is served upon the defendant. The latter makes an answer to the complaint. Upon these documents, or others which may be allowed, the issue is framed, that is, the question in dispute is made clear.

At a time appointed the parties go before the court with their attorneys and witnesses and give evidence to sustain their contentions. The jury is instructed by the judge as to the law of the case, and renders its verdict upon the facts proved and the instructions received. The court enters a judgment in accordance with this verdict.

The defeated party may appeal from this judgment. His attorney prepares a transcript of the evidence, and with this, upon notice to his adversary, goes before an appellate court of judges and asks to have the judgment reversed. Argument by both parties is heard by the appellate court. If the court finds a substantial error in the rulings or instructions of the trial judge, or finds the verdict unsupported by the evidence, it may reverse the judgment and order a new trial, Otherwise it affirms the judgment.

If a new trial is ordered, the same procedure is repeated except that no new pleadings are necessary.

When a final judgment is entered the successful party is entitled, besides any judgment for a fixed sum, to such costs as may be allowed by law. If the judgment is not paid, he may issue an execution against the property of his adversary, and the sheriff may levy on the property and sell it to satisfy the judgment. In every state a certain amount of property is exempt from levy and sale upon judgments. These exemption laws are intended to secure to debtors certain household necessities, tools of a trade, and often a homestead.

9. Scope of this work. A business man has to deal mainly with property and contracts. He can hardly carry on business without dealing directly or indirectly with some species of property, and very often the purchase and sale of property is the chief part of his business. He cannot carry on business at all without making contracts, often scores or hundreds of