ness evidenced by judicial records. Such records form the highest possible kind of evidence; insomuch that the only question which can be controverted is, whether the record exists. If it does, it imports absolute verity. So that specialties of record are the highest kind of specialties. And as a simple contract is merged in a sealed contract upon the subject-matter, so a sealed contract is merged in a specialty of record. These specialties are of two kinds: recognizances, and judgments or decrees. A recognizance is an acknowledgment of indebtedness made before the court or some authorized officer thereof, with a condition to be void on doing certain things therein named; which acknowledgment is made part of the record of the cause to which it relates. The object of a recognizance is to secure the appearance of a defendant or witness. The statute provides when it may be taken, and what shall be its form. As to judgments and decrees, they are barely mentioned under this head, because they are the highest kind of specialties; but as they have little or nothing in common with contracts, a discussion of them is reserved for another occasion.

$179. Implied Contracts. There is, perhaps, no branch of law, which the mind of an unprejudiced person will contemplate with more satisfaction, than that which regulates implied contracts. The broad principle which governs them may be thus stated: Every member of society has impliedly contracted to do whatever the law requires of him; if, therefore, without any special contract, he acts in such a manner as to create a legal liability, he is as much bound to fulfil that liability as if he had expressly contracted so to do. On this theory, every kind of indebtedness, which is not by express contract, may be referred to an implied contract. The most common instances of implied contracts are these: If you, with my consent, or at my request, have done work of any kind for me, without any express agreement as to compensation, I have impliedly contracted to pay you a quantum meruit, what it is reasonably worth. If you have sold me goods of any description, and I have consented to receive them, without any agreement as to price, I have impliedly contracted to pay you a quantum valebant, what they are reasonably worth. If you and I have settled accounts, and agreed upon a balance due from me to you, I have impliedly contracted to pay that balance. If you have lent me money, I have impliedly contracted to pay you. If, at my request or with my consent, you have paid money to another for my use, I have impliedly contracted to pay you. If you have received money from me or any other person, which on the principles of justice ought to be paid to me, you have impliedly contracted to pay it to me. If you have undertaken the custody of property belonging to me, you have impliedly contracted to use due diligence in keeping it safely. If I have permitted you to use property belonging to me, you have impliedly contracted that you will not abuse it. And if I have employed you to do some service re

quiring a certain amount of skill, you have impliedly contracted to apply such skill. These examples sufficiently explain the nature of implied contracts; and when we come to the law of procedure, we shall find that the common counts in debts and assumpsit have been framed with a special view to furnish a remedy upon such contracts. In fact, there are many cases where, though an express contract was made, it may be waived and a remedy sought upon the implied contract. Thus, where an express contract for service has been fully performed on one side, or where it has been put an end to by the act of the parties, compensation for the service rendered may be sought on the implied contract for a quantum meruit. But for technical reasons, where the express contract is a specialty, the remedy must be sought upon the specialty itself, with the single exception of an action of debt for rent. (a)

(a) 1 Chit. Plead. 339, 346, 348; Kelley v. Foster, 2 Binney, 4; Bank of Columbia v. Patterson, 7 Cranch, 299; Fitch v. Sargeant, 1 Ohio, 355; Hollister v. Reznor, 9 Ohio State, 1. A party who has abandoned a contract after part performance, without a just cause or the assent of the other party or his acceptance of the unfinished work, cannot recover pro tanto for the labor and materials. Allen v. Curles, 6 Ohio State, 505. But where there is a substantial performance of a contract of building with unintentional deviations or deficiencies, a party may recover, it has been held, the contract price, deducting therefrom the amount necessary to complete the work according to the contract. Hayward v. Leonard, 7 Pick. 182; Snow v. Ware, 13 Met. 42; Bassett v. Sanborn, 9 Cush. 58; Gleason v. Smith, id. 484; Smith v. Gugerty, 4 Barb. 614. See Smith v. Brady, 17 N. Y. 173; White v. Hewitt, 1 E. D. Smith, 395. The authorities on this subject are conflicting. 2 Parsons on Contracts, p. 35. According to the current of authorities, there can be no recovery, even pro tanto, upon a contract for personal service for a time certain, where it is abandoned without the consent of both parties, or some legal excuse before its expiration. 1 Parsons on Contracts, 522; Angle v. Hanna, 22 Ill. 429. A contract to work for six months certain, at eleven dollars per month, is an entire contract. Larkin v. Buck, 11 Ohio State, 561; Hansel v. Erickson, 28 Ill. 257; and if the laborer is dismissed without cause, he may recover for the whole period covered by the contract. Davis v. Marshall, 6 Hurl. & Nor. 916. "I have this day hired the barge Mary Jane of Albert Stein, for the sum of ten dollars per day until delivered back at Cincinnati in like good order as received," is an entire contract, and a recovery in a suit thereon is a bar to any further action. Stein v. Prairie Rose, 17 Ohio State, 471. But in New Hampshire and Iowa, this doctrine does not prevail, and the laborer is entitled, notwithstanding the breach of the contract, to recover the value of his services, deducting therefrom the damages to his employer resulting from the breach. Britton v. Turner, 6 N. H. 481; Pixler v. Nichols, 8 Clarke (Iowa), 106. See Ashbrook v. Hite, 9 Ohio State, 365. Loomis v. Eagle Bank, 10 Ohio State, 327; Ryan v. Dayton, 25 Conn. 188; Coe v. Smith, 4 Ind. 79; Wolfe v. Howes, 20 N. Y. 197; Stein v. Prairie Rose, 17 Ohio State, 471. It is sometimes required in contracts that the work shall be accepted or approved by a third party, as an architect, or even by the employer; and such acceptance or approval has been considered a condition precedent to a recovery by the other party. Smith . Brady, 17 N. Y. 173; McCarren v. McNulty, 7 Gray, 189; Vanderwerker v. Vt. Central R. R. Co. 27 Vt. 130; Herrick v. Belknap, 27 id. 673; Barker v. Troy & Rutland R. R. Co. 27 id. 766; Mansfield & Sandusky, R. R. Co. v. Veeder, 17 Ohio, 385. A written agreement may be discharged by a subsequent oral agreement upon a new and valid consideration, or by an agreement without such new consideration, which has been so far acted upon by the parties, that a refusal to carry it out would be a fraud on one of the parties. Thurston v. Ludwig, 6 Ohio State, 1; Willey v. Hall, 8 Clarke (Iowa), 62; Emerson v. Slater, 22 How. 28.

LECTURE XXXIII.

PARTICULAR CONTRACTS.

§ 180. Negotiable Contracts. (a) In the preceding lecture I have considered the nature and general divisions of contracts; but there are certain classes of contracts which, on account of their peculiar practical importance, seem to require a distinct considertion. These are, negotiable contracts; the contract of sale; the contract of bailment; the contract of principal and surety; the contract of insurance; and liens. I propose in this lecture to describe, of course very briefly, each of these contracts, beginning with negotiable contracts. It was an ancient doctrine of the common law, that contracts could not be assigned. The reason of this doctrine is said to be, that the right of a party to a contract is a right to sue in case of non-performance; and to permit a party to assign or transfer this right to another would encourage litigation. (b) This reason is not true in point of fact; since the assignee of a contract could have no motive to sue, which would not equally operate upon the original party. Still it was an ancient rule that choses in action could not be assigned. But like most rules not founded in reason, this rule has now become merely technical in law, and does not exist in equity. (e) It prohibits me from so transferring

(a) See 3 Kent, Com. lec. 44; 2 Black. Com. 466; Story on Bills; Bayley on Bills; Chitty on Bills; Kyd on Bills; Cunningham on Exchange; Byles on Bills; Parsons on Bills and Notes.

(b) Lampet's case, 10 Co. R. 48.

(c) When the assignee of a chose in action became by practice authorized to bring an action in the name of the assignor, entitling the action "A who sues for the use of B," choses in action became substantially assignable at law. Choses in action were assignable in equity, and are, under the codes, assignable. The assignee is held in equity, under the codes, the owner, and sues in his own name. But such assignee takes the chose in action "subject to equities;" that is, subject to such defences as were valid against it between the original parties.

A negotiable instrument is something more than an assignable instrument. When a negotiable instrument is duly transferred, the transferee is called a bona fide holder, and holds it as an absolute obligation, discharged of all defences to which it may have been liable in the hands of prior parties. Bills of exchange, promissory notes, bank checks, corporate and municipal bonds, certificates of stock, certificates of deposit, and, to a limited extent, bills of lading, are negotiable.

When a negotiable instrument is transferred in the manner stated in the text before maturity, the transferee takes absolute title, though it may have been obtained by the transferor by fraud, or though it had been lost and he found it, or though it was stolen. And this is true, although it never became a complete instrument by being delivered by the maker, but was obtained by fraud, or in case it is made payable to bearer, or was indorsed in blank and was lost or stolen before it was made complete by delivery. If it was originally subject to set-off or counter-claim, or was delivered only for a particular purpose and disposed of for other purposes, or delivered as an escrow, or upon condition, and disposed of in disregard of the condition, such transferee holds by absolute title. A bona fide holder has, as incident to his ownership, the right to confer an absolute title. Hence, one knowing of infirmities in the note, purchasing from a bona fide holder, takes an absolute title. After maturity the instrument loses its proper negotiability; a purchaser does not get a better title than his assignor had.

to you my interest in a contract as to enable you to sue at law in your own name; but I can so transfer my interest as to enable

But one who purchases after maturity from a bona fide holder takes an indefeasible title. A purchaser after maturity takes the title of his assignor. This prevailing rule has also been held in Ohio - McKesson v. Stanberry, 3 Ohio St. 156, although the Ohio statute provides that if any such instrument "be indorsed or delivered after the day on which it is made payable, and the indorsee institute an action thereon against the maker, drawer, or acceptor, the defendant shall be allowed to set up any defence he might have made had the action been instituted in the name and for the use of the person to whom the bond, note, bill, or check was originally made payable." A note due on demand is due at its date; the statute of limitations begins to run at its date. But it is strictly negotiable for a reasonable time after its date.

A sealed instrument, though negotiable in form, is not negotiable at common law or under the statute of Anne: it is made negotiable by statute in Massachusetts, North Carolina, Georgia, Florida, Tennessee, Ohio, Illinois, Kansas, Nebraska, Dakota, and Colorado. The following instruments are not negotiable, but are invalid even in the hands of a bona fide holder: a forged instrument, one made by a married woman who has no separate estate, or which is not a charge upon her separate estate; accommodation paper made by one of unsound mind, and any paper made by such after inquest of lunacy found, the law as to other paper made by a lunatic is unsettled; where such paper is held void, it is not negotiable, where it is held only voidable, it is negotiable; paper made void by statute, such as notes or drafts given for gambling debts, - Bayley v. Taber, 5 Mass. 286; Vallett v. Parker, 6 Wend. 615; Aurora v. West, 22 Ind. 88; instruments signed by an infant, or signed by one purporting to be an agent, the signer having in fact no authority; or made by one who without any negligence on his part, is fraudulently induced to sign in the belief that he is executing an instrument of a wholly different character, as, for example, a power of attorney or contract for service, De Camp v. Hamma, 29 Ohio St. 467; Hubbard v. Rankin, 71 Ill. 129; Auten v. Gruner, 90 Ill. 300; Anderson v. Walker, 34 Mich. 113; Griffith v. Kellogg, 39 Wis. 290; Bank v. Lierman, 5 Neb. 247; but such maker, though unable to read, must not be chargeable with any negligence in failing to ascertain the character of the paper which he signs - Ross v. Doland, 29 Ohio St 473; Swannell v. Watson, 71 Ill. 456; Anderson v. Warne, 71 Ill. 20. This rule is not admitted in Indiana. Kimble v. Christie, 55 Ind. 140; Bank v. Weckerly, 67 Ind. 345. But see Fisher v. Van Behren, 70 Ind. 19; Ruddell v. Dillman, 73 Ind. 518.

The rule that instruments negotiable in form, purporting to be issued by an agent, are not valid in the hands of a bona fide holder, if such assumed agent has no authority, applies to municipal bonds. The governing or representative body, the board or officers issuing the bonds is an agent; the people or taxpayers are the principal. A board or officer issuing municipal bonds without authority cannot validate them by subsequent ratification. Marsh v. Fulton County, 10 Wall. 676; Gould v. Sterling, 23 N. Y. 463; Treadwell v. Commissioners, 11 Ohio St. 183; Clark v. Des Moines, 19 Ind. 201; Veeder v. Lima, 19 Wis. 298. But the taxpayers can validate them by laches or conduct which estops them from denying their validity in the hands of a bona fide holder, as by failing to enjoin their issue Supervisors v. Schenck, 5 Wall. 581; by voting for and submitting to payment of principal or interest - Supervisors v. Schenck, 5 Wall. 581; Mercer County v. Hubbard, 45 Ill. 142; Shoemaker v. Goshen Township, 14 Ohio St. 585; Railroad v. Marion County, 36 Mo. 295; or by receiving and keeping the proceeds and benefits of them - Pendleton County v. Amy, 13 Wall. 305; State v. Van Horne, 7 Ohio St. 331; State v. Union Township, 8 Ohio St. 403; Barrett v. County Court, 44 Mo. 199.

As to the power of municipal corporations to issue negotiable bonds, it has been held that a municipal corporation has implied power to contract a debt whenever necessary to carry out any power conferred upon it. Lynde v. County, 16 Wall. 6. Whenever it may contract a debt it may borrow money to pay it. Lynde v. County, 16 Wall. 6; Bank v. Chillicothe, 7 Ohio, pt. 2, 31; Galena v. Corwith, 48 Ill. 424; Mills v. Gleason, 11 Wis. 470. And when it may contract a debt or borrow money, it may issue negotiable bonds for its payment. Commonwealth v. Pittsburg, 34 Pa. St. 496; Commonwealth v. Pittsburg, 88 Pa. St. 66; Reinbath v. Pittsburg, 41 Pa. St. 278; De Voss . Richmond, 18 Gratt. 338; Railroad e. Evansville, 15 Ind. 395; Galena v. Corwith, 48 Ill. 423; Lynde v. County, 16 Wall. 6. In New York it has been held that the implied authority is only to issue bonds directly to the creditor in payment of the debt, not to sell the bonds in order to raise money to pay the debt. Ketchum v. Buffalo, 14 N. Y. 256.

A municipal body issuing bonds has ordinarily from the legislature specific

you to use my name in a suit for your benefit; and the law will protect such a transfer; so that for all substantial purposes, con

authority to issue bonds for a specified purpose, and after compliance with specified conditions; the condition frequently is that the bonds should be voted for by a majority of the qualified voters of the city or county, or should be petitioned for by a specified proportion of the taxpayers. If issued for a purpose other than that authorized, they are invalid in the hands of a bona fide holder. Marsh v. Fulton County, 10 Wall. 676; Lewis v. Shreveport, 3 Woods, C. Ct. 205. Where the conditions precedent to the existence of authority are not performed, the bonds are not valid in the hands of a bona fide holder. Starin v. Genoa, 23 N. Y. 440; Gould v. Sterling, 23 N. Y. 456; Treadwell v. Commissioners, 11 Ohio St. 183; Middleport v. Insurance Co., 82 Ill. 502; Eagle v. Cohn, 84 Ill. 292; Wallace v. Mayor of San Jose, 29 Cal. 188. But the non-performance must be in matter of substance, not of mere formalities. Supervisors v. Galbreath, 99 U. S. 214; Roberts v. Bolles, 101 U. S. 119; Smead v. Union Township, 8 Ohio St. 394; Mercer County v. Hubbard, 45 Ill. 142; Steines v. Franklin County, 48 Mo. 179.

The rule as to non-performance of conditions precedent, avoiding municipal bonds in the hands of bona fide holders, is subject to the following limitations: A bona fide holder holds the bond free from all infirmities of origin, except want of power in the makers, and prohibited consideration. Cromwell v. Sac County, 96 U. S. 51. When the question of performance is by law to be determined by any particular person or body, such determination, though erroneous, binds, and bonds issued in pursuance thereof cannot be questioned in the hands of a bona fide holder. Commissioners ". Aspinwall, 21 How. 539; Kennicott v. Supervisors, 16 Wall. 464; St. Joseph Township r. Rogers, 16 Wall. 659; Block v. Bourbon County, 99 U. S. 686 ; Bank v. Rome, 19 N. Y. 23; Belo v. Commissioners, 70 N. C. 489; Commissioners of Knox County v. Nichols, 14 Ohio St. 271. Accordingly bonds negotiated after being held valid by the supreme court of the State in which they are issued are not affected by such decision being disapproved and held erroneous by a subsequent decision of the same court, rendered after such negotiation. Douglass v. Pike County, 101 U. S. 677. And while a mere recital, in the bond, of the act of the legislature conferring authority is notice to every purchaser to see at his own peril that the requirements of the statute has been complied with McClure v. Oxford, 94 U. S. 429; Silliman v. Railroad, 27 Gratt. 119; Aurora v. West, 22 Ind. 89; Fisk v. Kenocka, 26 Wis. 29; a recital in the bond that all conditions have been performed estops the maker from questioning the validity of the bond in the hands of a bona fide holder. Town of Coloma v. Eaves, 92 U. S. 484; Venice v. Murdock, 92 U. S. 494; County of Moultrie v. Bank, 92 U. S. 631; Marcy v. Oswego, 92 U. S. 637; Wilson v. Salamanca, 99 U. S. 499; Pompton v. Cooper Union, 101 U. S. 198. A recital, however, that the bond is issued in pursuance of an act of the legislature, does not estop the municipality from contending against a bona fide holder that the act was not constitutionally passed. South Ottawa v. Perkins, 94 U. S. 260. In Illinois, on the contrary, it has been held that recitals in a bond which is issued without authority in fact are no protection to a bona fide holder. Lippincott v. Pana, 92 Ill. 24; Gaddis v. Richland County, 92 Ill. 119; People v. Jackson County, 92 Ill. 441.

The instrument, to be negotiable, must be payable in money. Gold and silver are the money of the world. U. S. treasury notes are, by law, money in the United States. Bank notes commonly pass current as money.

It has been held that the

words "current funds " mean money, or funds or notes circulating as money, at par, without any discount; and that evidence will not be admitted to show any other meaning. Marc v. Kipper, 34 Ill. 286. "Current money or good current money means money, i. e., legal tender. Wilburn v. Greer, 6 Ark. 255; Black v. Ward, 27 Mich. 193. Hence it is held in some States that bills and notes payable in "currency," or "current funds," or "current bank notes," being payable in current par paper, the equivalent of money, are negotiable. Pardee v. Fish, 60 N. Y. 265; Deberry v. Darnell, 5 Yerg. 451; Howe v. Hartress, Hill, & Co., 11 Ohio St. 449; Marc v. Kipper, 34 Ill. 286; Butler v. Paine, 8 Minn. 324; Drake v. Markle, 21 Ind. 433; Fry v. Dudley, 20 La. An. 368; Mitchell v. Hewitt, 5 Smedes & M. 361; Cockrell v. Kirkpatrick, 9 Mo. 688. In other States they are not negotiable unless payable in actual money or legal tender. Collins v. Lincoln, 11 Vt. 268; Jones v. Fales, 4 Mass. 245; McCormick v. Trotter, 10 Serg. & R. 94; State Corpening, 10 Ire. 58; Lange v. Kohne, 1 McCord, 115; Warren v. Brown, 64 N. C. 381; Simpson v Moulden, 3 Cold. 429; Lampton v. Haggard, 3 Munroe, 149; Black v. Ward, 27 Mich. 193; Huse v. Hamblin, 29 Iowa, 244. If made payable in the bills of a particular bank. Irvine v. Lowry, 14 Pet. 293; Hawkins v. Watkins, 5 Ark. 481; Bank v. Street, 16 Ohio St. 1.