Where by special agreement interest is due before the principal, a separate action can be brought to recover it; and in Ohio, if no suit be brought and it remain due and unpaid, interest upon interest, or compound interest, will be allowed. But the law varies in other places; and the weight of authority, though not of reason is against it. 7. (a) Where partial payments have been made on a debt, the common rule is to compute interest down to the first payment, then deduct that payment, and so on for each of the successive payments. But in Massachusetts, the rule is thus modified: compute the interest down to the time when a payment or payments have been made exceeding the interest then due; add the interest and subtract the payment or payments; and thus proceed to the time of computation. This modification is made to avoid compound interest, by preventing the interest in any case from forming part of the principal. 8. (b) Where the contract is made in one place and payable in another, the rate of interest is governed by the law of the latter place; otherwise, by the law of the place of making the contract.

§ 178. Express Contracts. The remarks hitherto made apply generally to all contracts; but it now becomes necessary to distinguish between the various kinds of contracts. The distinction between executed and executory contracts has been already explained. The next general division is into express and implied. Express contracts are those the terms of which are actually stipulated in uttered language; if the words are reduced to writing, they are termed written contracts; if not, oral or verbal contracts. Implied contracts are those which the law infers from the acts of the parties. (c) Parol or simple contracts signify all contracts which are not under seal, whether express or implied. (d)

What Contracts must be in Writing. The general rule is, that oral contracts are as valid as written; but there are certain classes of contracts, which, for special reasons, the law requires should be in writing. These are provided for in the third, fourth, and fifth sections of the statute of frauds, which have been already described. This statute, it will be remembered, was designed to prevent perjury as well as fraud; and it will be readily seen, that to require a contract to be reduced to writing, is the best possible safeguard against perjury, and consequent fraud, in relation to such contract. But I need not repeat a description of the contracts which must be in writing, by the three last sections of this statute.

Contracts under seal. (e) There is another division of contracts

(a) Miami Exp. Co. v. Bank U. S. Ohio, 261; Dean v. Williams, 17 Mass. 417; Hammer. Neville, Wright, 169.

(b) Story's Conflict of Laws. § 291-301.

(c) Herzog v. Herzog, 29 Penn State, 465.

(d) Rann e. Hughes 7 T. R. 351, note; Beckham v. Drake, 9 M. & W. 79.

(e) 2 Black. Com. 305; 4 Kent, Com. 452; Platt on Covenants; Hurlstone on Bonds.

into specialties and parol or simple contracts. Specialties include contracts under seal and obligations of record. Simple contracts, otherwise denominated parol contracts, include all other contracts, whether oral or written. It is then the seal or the record which constitutes the specialty. Seals are of two kinds, public and private. Public or official seals are those used by public officers, for the authentication of public documents. With these we have at present no concern. Private seals are those used by private individuals, in the execution of private contracts. A sealed contract is technically called a specialty, deed, bond, covenant, or writing obligatory. Every contract may be under seal, if the parties so elect; and there are some contracts which are invalid without a seal; as deeds for the conveyance of real estate, and various kinds of bonds prescribed by statute. The law relating to these contracts abounds. with technical and arbitrary distinctions, which serve no other purpose than to confuse the mind. There is, perhaps, no branch of law in which reform would be more salutary. It may be safely asserted that the total abolition of private seals would be an immense improvement, without any admixture of evil; for they are not only of no conceivable use, but positively injurious, from the complexity which they occasion. This will be evident from a brief examination. According to Blackstone, seals were first introduced because men could not write. (a) Not being able to ratify contracts by signature, each person had his own particular seal, with some distinctive device, which he used in the place of a signature. The moment, therefore, that writing became general, the reason of using seals ceased; but the custom nevertheless continued. From the origin of seals, then, we gather this: that instead of being a "relic of ancient wisdom," as the books declare, they are in reality a monument of ancient ignorance. We further learn that the original purpose of a seal has been entirely lost sight of in modern times; for we not only never affix a seal without a signature, but where a person cannot write his own name, we write it for him, and he ratifies it. In fact, seals are so far from being used to identify contracts, that they very seldom have any distinctive character to indicate to whom they belong. They are generally affixed by the scrivener, as a part of his business. For what purpose, then, are seals continued in use? The pretext is, that they add solemnity to the instrument to which they are affixed. To judge from the language of the books, one might suppose that a seal was some mystic symbol or amulet; and that the ceremony of affixing it was attended with something like religious pomp. But according to Lord Coke, "a seal is wax impressed, because wax without an impression is not a seal." (b)

(a) 2 Black. Com. 295; 4 Kent, Com. 452; Jackson v. Wood, 12 Johns. 73; Jack. son v. Stevens, 13 Johns. 316; Bond's Lessee v. Swearingen, 1 Ohio, 402; Ayres v. Harness, 1 id. 368; Violett v. Patten, 5 Cranch, 142; Hall v. Phelps, 2 Johns. 451; Fox v. Reil, 3 Johns. 477: 1 West. Law Jour. 385; Farmers' Bank v. Haight, 3 Hill, 463; Addison on Contracts, p. 5.

(b) Inst. 169.

The solemnity, then, which is attached to a seal, must consist in melting the wax, and making the impression; a rite which certainly cannot be very august or awful. But how is even this solemnity diminished, when we come to the definition of a seal in our statute; which may be "either of wax, of wafer, or of ink, commonly called a scrawl seal." Chancellor Kent considers this substitution of a "flourish with a pen at the end of the name,' in place of the ancient seal, as a virtual abolition of seals. (a) It does indeed show how utterly insignificant seals are; but it does not take away one of their legal consequences. The "scrawl," which we have substituted, possesses the same mysterious virtue as the wax described by Coke; yet it is upon this theoretical solemnity of a seal that the principal distinctions between sealed and unsealed writings are founded. Some of these distinctions I will now enumerate. 1. The presence of the seal is said to estop the party, that is, to preclude him from proving any thing to the contrary: when by the same words without a seal, he would not be estopped. (b) Now common sense would indicate that if the doctrine of estoppel be ever proper, it should be founded upon the nature of the averment, and not upon the mere presence of a seal. 2. The presence of a seal is said to import a consideration, without its being expressly stated, and to preclude the denial of that fact; (c) when the same words without a seal would have no such effect; and such is the doctrine of the common law; but it is so unreasonable, that a statute has lately been passed in this State, allowing the consideration of all contracts, whether sealed or not, to be called in question; with the exception of negotiable contracts, after being negotiated. (d) 3. At common law, a debt due upon a sealed contract was entitled to a priority of payment out of the assets of a deceased person, before any debt due upon a contract not under seal; but this doctrine is also deemed so unreasonable that our statute of distribution allows no such preference. 4. A contract cannot be filled up over a seal and signature in blank, though left for that express purpose; whereas the same words may be written over a mere signature in blank, and the contract will be valid. This distinction, though palpably unreasonable, has been recognized by our own court. 5. If there be a subscribing witness to a sealed instrument, the confession of the party who executed it will not be admitted to prove the execution, if the witness can be had; whereas, if there be no seal, the confession will be sufficient. This distinction is so utterly absurd, that it is matter of astonishment it should ever have been adopted; it has, however, been recognized by the courts of this country. 6. No agent can affix the seal of his principal, unless

(a) 4 Kent, Com. 453.

(b) Co. Litt. 352, a; 4 Kent, Com. 260.

(c) Sharington v. Stratton, Plowden, 308; 2 Kent, Com. 464.

(d) A similar change of the common law has been introduced in New York and Indiana.

his authority so to do be under seal; whereas, a mere verbal authority will be sufficient for affixing the signature of the principal. And the same doctrine applies to the revocation of an agent's authority by the principal. 7. A surety upon a contract under seal, is not released by giving time to the principal, unless the agreement for extension be under seal; whereas, a mere verbal agreement for extension will release a surety upon a contract not under seal. 8. A contract under seal being of a higher nature, supersedes a simple contract upon the same subject-matter. The latter is said to be merged in the former. 9. The remedy upon contracts under seal is, from beginning to end, entirely different from that upon contracts not under seal. This will be demonstrated when we come to speak of the modes of proceeding. Such are a few of the distinctions, founded upon the presence or absence of a seal, which render the law of contracts, otherwise so simple and reasonable, in this one respect a collection of arbitrary principles. What an immense superstructure to be built on so slight a foundation! Yet such is the common law; and such it must remain, until legislation shall do away with private seals. It is not denied that some contracts should be executed with more formality, and proved with more care, than others. On this principle, we have seen that the statute of frauds properly requires certain contracts to be in writing; that the statute of wills as properly requires them to be attested, and that the statute of deeds requires them to be both attested and acknowledged. But the reason of these requisitions has not the most remote application to the use of seals; for it cannot be pretended that seals add any thing to that vigilance and precaution in executing and proving contracts, which these provisions are intended to secure.

Deeds. The foregoing remarks apply generally to all sealed instruments. I shall now refer to the particular classes, beginning with deeds. The term deed, as we have already seen, is applicable to all contracts under seal, by way of eminence, because, in the language of Blackstone, it is the most solemn and authentic act that a man can possibly perform, with relation to the disposal of his property; but it is now most frequently used in a restricted sense to denote an instrument for the conveyance or incumbrance of real estate. Its form and requisites for this purpose have been fully considered. Deeds are divided into two kinds, deeds poll and indentures. A deed poll, or single deed, is a deed executed by only one party; and was so called, because, when forms were more regarded than substance, the edge of such deed was not indented, but polled or shaved quite even. Whereas, an indenture, which is a deed executed by more parties than one, was so called, because as many copies or counterparts were required to be executed as there were parties; and the edges of each were so notched or indented as to correspond one with another. This useless formality is now obsolete, but the name remains; and whenever parties enter into mutual covenants or

engagements under seal, the instrument is an indenture. The most frequent instances are indentures of lease, and indentures of apprenticeship, which have been already described.

Bonds. (a) The term bond is used to denote the acknowledgment of an existing debt under seal. It differs from a covenant in this, that the latter is always an executory contract for something future: though each is technically called, by way of eminence, a writing obligatory. Bonds are of two kinds, single bonds and penal bonds. A single bond, more frequently called a single bill, is a simple acknowledgment of indebtedness without any condition of qualification; as if I, under hand and seal, acknowledge myself indebted to you in a given sum. A penal bond is an acknowledgment of indebtedness, accompanied by a condition, upon compliance with which such acknowledgment is void. The sum here named as a debt is called a penalty, because it is inserted merely to secure the performance of the condition, which is the principal thing; as if I, under hand and seal, acknowledge myself indebted to you in a given sum, upon condition that it is to be void upon my doing a certain thing, as to pay money or to convey land. And it has been decided that an action will not lie to recover a penalty, unless it be under seal. Besides the penal bond given by individuals in their private transactions, our statute requires that all bonds given in the course of judicial proceedings, and all official bonds given for the performance of duty, shall be in this form. Penal bonds, therefore, occupy a wide space in the law. But the very idea of a penalty supposes that the amount is greater than the value of the condition, the performance of which it is designed to secure; yet, as the law formerly stood, if the condition was not strictly performed, the entire penalty could be recovered. The hardship thus frequently occasioned induced chancery to interfere and prohibit the recovery of any thing more than reasonable damages, for the non-performance of the condition. But now the application to chancery is unnecessary, because our statute enables the courts of law to do the same thing. As a matter of form, the judgment is given for the entire penalty; but the actual damages are assessed by a jury, and execution issues for no more than the amount of their verdict. The result, therefore, is that a penal bond now amounts to no more than a covenant to perform the condition, and may be treated as such. (b)

Specialties of Record. These include obligations of indebted

(a) Huddle v. Worthington, 1 Ohio, 423; Nelson v. Ford, 5 id. 473.

(b) If the sum stated in an obligation is to be regarded in the nature of a penalty, it is not recoverable on default of the obligor, and only actual damages will be allowed. But if it may be regarded as damages liquidated and assessed by the parties, then it may be recovered on a breach of the condition. For late leading cases which illustrate this distinction, see Beale v. Hayes, 5 Sandf. 640; Bagley v. Peddie, id. 192; Mead v. Wheeler, 13 N. H. 351; Brewster v. Edgerly, id. 275; Atkins v. Kinnier, 4 Exch. 776; Berry v. Wisdom, 3 Ohio State, 241. Cairnes v. Knight, 17 Ohio State, 68; Fisk v. Gray, 10 Allen, 132; Lampman v. Cochran, 16 N. Y. 275; Clement v. Cash, 21 N. Y. 257; Bagley v. Reddie, 16 N. Y. 469.