« AnteriorContinuar »
most of our States, the proceedings in divorce upon delivery, or only one when the last shipcases are unduly summary.” That in those ment had been made and accepted, the iron States there should be a reform, is abund- delivered, and the complete contract fulfilled. antly manifest, and it is comparatively im- The court says: “If the construction of paymaterial whether the example to be followed ment due upon each arrival be correct, the is foreign or domestic. In matters of reform contract was “divisible” in the sense in which we may well take lessons even from the ends that word is applied to cases of a particular of the earth, or isles of the sea. The Louisi- character, and depe ding upon peculiar cirana law is more stringent than the English, cumstances. If the plaintiffs had shipped perhaps for that reason it is less likely to be the 500 tons of Caulder iron for arrival in accepted as a model.
March, and it had been delivered to the deWe suggested the adoption of the English | fendants, who had accepted it, they would law on the subject, because we then bad that have been bound to pay for that iron, irrelaw under consideration, in connection with spective of a possible or actual default therethe most resounding social scandal of this after as to the Coltness iron. But this is begeneration.
cause of a part delivery on one side, and a part acceptance on the other, which is in accordance with the contract, and permitted
by its terms. That doctrine, however, does NOTES OF RECENT DECISIONS.
not at all reach or cover a case like the one
before us. CONTRACT-WHEN DIVISIBLE WHEN NOT “Here there is a breach of the contract at Divisible.-The New York Court of Appeals the beginning--a failure to perform at the has recently decided a very interesting case outset-and that breach justifies a rescission on the law of contracts. The terms of the
by the vendee. But a rescission of what? contract appear only in the broker's memor- Obviously of the entire contract. It must be andum which is in the following words:
that or nothing, since there are not two indeSold to the following named parties, Scotch pendent and separate contracts, one of which pig-iron, to arrive as specified below:
may be broken without peril to the other ; 300 tons of Coltness pig-iron, at thirty-six but there is a single contract, which may be per ton, for shipment, to be due here in April
broken without peril to the other; but there next; 500 tons of Caulder pig-iron, at thirty- is a single contract, which may be rescinded four per ton, for shipinent, to be due here in at the moment of a breach, so far as it reMarch next, payable, on arrival here, by four mains wholly unperformed on both sides.” months note, indorsed by the above-named In a similar case the Supreme Court of the parties, with interest added at six per cent.” United States says: 2 “In the contracts of It appears that the seller made default in
merchants, time is of the essence. The time point of time in delivering the Caulder iron, of shipment is the usual and convenient mode and under the stipulations of the parties the of fixing the probable time of arrival, with question presented for decision was whether
the view of providing funds to pay for the the right of withdrawal from the contract goods, or of fullilling contracts with third consequent upon the default, extended to all
persons. A statement descriptive of the the iron, or only to the Caulder iron. The
subject-matter or of some material incident, court held that the contract was not divisible, such as the time or place of shipment, is or-that the seller was bound to deliver in accord.
dinarily to be regarded as a warranty, in the ance with its terms; that although there were sense in which that term is used in insurance stipulations for two separate and distinct de- and maritime law, that is to say, a condition liveries, that fact did not render the contract precedent, upon the failure or non-performdivisible, nor remove the ambiguity in the ance of which, the party aggrieved may repuwritten agreement as to whether there were diate the whole contract.” A statement in a to be two notes given, one for each shipment contract may be a representation only, or a
warranty or condition. If the former, and Pope v. Porter, X. Y. Ct. of App., June 1, 1886, 7 N. East. Rep. 304.
Norrington v. Wright, 115 U. S., 188, 203.
only a matter of description or inducement, it are thus described by the court in the case will not usually authorize a rescission of the under consideration. “The cases which seem contract if it should prove to be untrue; but to have misled the court below are founded if the statement is a warranty or condition, upon peculiar equities growing out of the its failure will justify an abandonment of the form of contract. They contemplate and contract by the party aggrieved. Whether a require a performance in separable parts or statement in a contract is a representation or divisions; and where the vendor delivers an a condition is a question for the court upon agreed proportion, which the vendee accepts, consideration of the whole instrument, and and payment therefor becomes immediately by no means a question for a jury. That a due, the right to recover is at once complete, vessel should sail from one port to another, and is not forfeited by a later default. The named in the charter-party, “with all possible contract in such case is called divisible or despatch," was held to be a warranty that she distributive, and the language is not objecwould so proceed, and a condition precedent tionable if correctly understood and applied. to a recovery on the charter-party.4
The right of rescission or of abandonment, The more modern English cases are in full
where such a contract has been wholly peraccord with the rulings in the case under con- formed on one side as to one of its separable sideration, and those of Norrington v. Wright, parts, and that performance accepted on the which it follows. In a leading case, the ac- other, is lost, and cannot be regained, for tion was brought on a contract of sale of 667 the right to the payment reserved has fully tons of bar iron to be shipped in June, July, accrued, and does not depend upon further August and September, in about equal por- conditions." tions each month. The seller sent only twenty tons within the first month, which the buyer refused to accept on the ground that such a tender was a breach, not a part per
LEX Loc. CONTRACTUS-Lax LocI SOLUformance of the contract; and this view was
TIONIS-ELECTION OF PARTIES-EXPRESS REsustained by the court. Other English cases
SERVATION OF INTEREST-USURY.— In a support this doctrine, particularly Bowes v.
cent case in North Carolina, the question Shand,” which, after contradictory decisions
was presented, whether parties in one State, in the lower courts, was finally decided by making in that State a note under seal paythe House of Lords. The contract was for
able to a resident of another State, dated in a quantity of rice to be shipped at Madras the former State, could legally bind them"during the months of March and (or)
selves in that instrument for a rate of interApril.” A large quantity of the rice was est, usurious by the laws of the State in which shipped in February, very little in March,
resided. The note was dated at and none in April. The buyer refused to Gaston, N. C., expressly reserved eight per accept the rice, and the House of Lords sus
cent. interest, legal in North Carolina, but tained his refusal. Lord Chancellor Cairns
usurious in Virginia, was payable to a Norstruck the key-note of the whole question
folk merchant, and was delivered to him in when he said: “The plaintiff who sues upon
Norfolk. The defence was that because of that contract has not launched his case until
such delivery it was a Virginia contract, and he has shown that he has tendered that thing
that the interest expressed in the face of the which has been contracted for, and if he is
note was therefore usurious. The court unable to show that, he cannot claim any
held, upon the authority of Lord Brougham, damages for the non-fulfillment of the con
that "a contract, payable generally, naming tract."
no place of payment, is to be taken as payaContracts that are divisible, or distributive,
ble at the place of contracting the debt, as if
3 Behn v. Burness, 3 Best & S., 751.
4 Lowber v. Banks, 2 Wall. (69 U. S.), 728; Davison v. Van Lingen, 113 U. S. 40.
8 Morris v. Hockaday, s. C. N. C., The Reporter, Vol. 22, 55.
9 Dow v. Lipman, 5 Clark & Fin., 1; See also 1 Daniel on Negotiable Instruments, $ 881; 2 Parsons on Contracts, 586, 589; 2 Kent's Com. 457; Story's Con. flict of Laws, $ 272. ,
it was expressed to be there payable. Being whose power, in a short time, rivaled those payable everywhere, the rule of interest must of the State which gave them being. The be determined by the law of the origin, since people in their laudable desire to secure railthere is nothing else to give a rule.”
way facilities, by improvident legislation, and The North Carolina court adds, however: their failure to erect the necessary safeguards
“But the defendants insist that their note have, in many instances, placed themselves was under seal, and the contract was not in positions beyond the power of relief from consummated until a delivery, and it is al- courts, or even constitutional conventions. leged, and admitted by the demurrer, that Corporations, on the other hand, in their the note was delivered to the plaintiffs in greed for power and wealth have taken adNorfolk, Virginia. But we think that is al- vantage of the popular frenzy, and in many together immaterial. If the defendant had instances have secured grants of franchise, stated in his answer, that the note was given which, if construed as claimed, would have to secure the payment of goods purchased by placed them absolutely beyond and indepenthe defendants from the plaintiffs, who were dent of legislative regulation. merchants of the city of Norfolk, there would This question is one peculiar to this counhave been some force in the contention,-for try and our institutions of government. In it is laid down in 2 Parsons on Contracts, England it is competent for parliament to 586: If a merchant of New York comes to
make a law binding upon corporations, howBoston to buy goods, and then returns there ever much it may increase their burdens, reand gives his note for them, which specifies strain their powers, whether general or oreither Boston, or no place, for payment, it is ganic, even to the extent of repealing their a Boston transaction.''
charters, no matter how valuable their franAs, however, the defendants, either from
chises may be. inability to make the necessary proof, or by In this country the limitation upon State their neglect, by suitable answer to bring be- legislation, which has for its purpose the fore the court the facts that the plaintiffs regulation or control of private corporations, · were residents of Virginia, that the contract originates in that clause of the constitution was made in that State, and that the note was of the United States, which prohibits States given for goods there purchased, they were from passing any law impairing the obligamanifestly in no condition to avail themselves
tion of a contract, and the additional fact of the principle which the court adopts from that charters of private corporations have "Parsons on Contracts”. All these things it been judicially declared to be contracts bewas necessary for them to aver in their an
tween the State and the corporation, and swer, and sustain by sufficient evidence.
therefore subject to the constitutional restricFor want of such averments, and such evi
tion.3 Whether such charters, in a strict dence, the case manifestly falls within the
legal sense, are contracts, and whether that rule laid down by Lord Brougham.
clause of the constitution was ever designed to include such a class of so-called contracts, it is now too late to question.
Where a legislature has brought into being STATE REGULATION OF RAILWAY
an artificial person, and endowed it with life, CORPORATIONS AS TO RATES.
perpetuity and powers, granted to it valuable
franchises, and those franchises are accepted Within the last three-quarters of a century the subject of legislative control or regula
and acted upon, the legislature cannot after
wards take from such corporation, or matertion of railway corporations has occupied a large share of attention from both legislative ially impair its valuable franchises without and judicial departments of government.
its consent,* unless the right so to do is reDuring that period the spirit of enterprise
i Ch. J. Redfield in Thorp v. R. R. Co., 27 Vt. 140. and development has brought into being a
2 $ 10, Art. 1. class of artificial persons whose power and 3 Dartmouth College v. Woodward, 4 Wheat., 518 influence have extended to every department
4 Dartmouth College v. Woodward, 4 Wheat., 518;
Bank v. Sharp, 6 How. 301; University v. Indiana, 14 of industry. Corporations have been created, How. 268; Bank v. Knoop, 16 How. 369; Binghamp
served in the charter or some general law,5 however, is not true if the thing granted is a and even then the power is limited. The mere privilege and does not rise to the digcharter is a contract within the purview of nity of a franchise, exclusive right or an the constitution as construed by the courts of element having the attributes of property." last resort, and, therefore, cannot be violated When the right to alter or amend is reor impaired by one party thereto without the served in the charter, or in some general law, consent of the other party. This may now or in the constitution, the legislature, in such be said to be the settled law of this country, case, may make any reasonable amendment, though it has met with serious opposition on or impose upon the corporation additional the part of many courts and eminent jurists burdens, duties or liabilities if the effect of high standing. But whether such charters thereof is not to take away from the comare stricly and in a legal sense contracts, or pany any of its substantial property or propnot, they are a species of grant from the erty rights.10 But for the constitutional proState to the corporation, to support which a hibition it has been contended that in the consideration is unnecessary, and the right modification, amendment or even repeal of of the corporation to the thing granted, corporate charters, there would be no rewhen accepted by it, cannot be contested by straint upon the legislative will. Under a the State or reasserted successfully.8 This, constitutional form of government, however,
it is insisted that property rights, or property ton Bridge case, 3 Wall. 51; Brown v. Hummel, 6 of any kind, ought not to be taken from inPenn. St. 86; State v. Hayward, 3 Rich. 389; Norris v.
dividuals or corporations by arbitrary powAcademy, 7 G. & J. 7; Grammar School v. Burt, 11 Vt. 632; People v. Manhattan Co. 9 Wend. 351; Common er." If property be lawfully acquired it is wealth v. Cullen, 13 Pa.St. 113; Bank v.State, 14 S.& R. immaterial whether it be by purchase, labor, 599; Backus v. Lebanon, 11 N. H. 19; Bridge Co. v.
descent or by “making profitable use of a Hoboken Co. 2 Beas. 81; Bank v. United States, 1 Greene, (Iowa), 553; Bank v. Hastings, 1 Doug. 225; franchise granted by the State;” in either Edwards v. Jagers, 19 Ind. 407; Bruffet v. R. R. Co. 25
case the right thereto ought to be sacred and Ill. 353; State v. Noyes, 47 Me. 189; People v. Plankroad Co. 9 Mich. 285; Mills v. Williams, 11 Ired. 558;
inviolable.12 Bank v. Bank, 13 Ired. 75; Wales v. Stetson, 2 Mass. While all charter rights should be secure, 143; King v. Bank, 15 Mass. 447; Nichols v. Bertram, 3
and charter contracts enforced, and the parPick. 342; Bridge v. Lowell, 15 Gray, 106; State v. Bank, 2 Stew. 30; Com. v. R. R. Co. 103 Mass. 254; ties thereto held to the terms thereof, yet, Delaware Tax Cases, 18 Wall. 206; Bridge Co. v. State, such contracts and the franchises secured 18 Conn. 53; R. R. Co. v. Bowers, 4 Hous. 506; R. R. Co. v. Casey, 26 Pa. St. 287; Lake View v. Rose Hill
thereby are as sacred, but not more so than Cemetery Co. 70 III. 191; St. Louis v. Bank, 49 Mo. those of natural persons under similar cir574; Hamilton v. Keith, 5 Bush, 458; Smead v. R. R.
cumstances and should be governed by the Co. 11 Ind. 104; R. R. Co. v. Burkett, 46 Ala. 569; R. R. Co. v. Harris, 27 Miss. 517; Allen v. McKeen, 1
same rules of construction. Sumn. 276; Louisville v. University 15 B. Mon. 642; R. It is, therefore, a well-established principle R. Co. v. Mosely, 52 Miss. 127; Sloane v. R. R. Co. 61
applied to this class of charter contracts, or Mo. 24; State v. R. R. Co. 73 N.C.527; Detroit v. Plank Road Co. 43 Mich. 140; Atty. Gen. v. R. R. 35 Wis. 42.); grants, that, as against the public, only R. R. Co. v. Maine, 96 U. S. 499; Sinking Fund, cases
those rights, franchises and privileges which 99 U. S. 700; University v. People, 99 U. S. 309; Stone v. Miss. 101 ('. s. 814; Farrington v. Tenn. 95 U. S. are clearly conferred pass to the corporation. 679.
Being in derogation of the public rights the See authorities in note 4.
grants are strictly construed and no rights, 6 Waterworks Co. v. Waterworks Co., 14 Fed. Rep.
powers or privilegs pass by implication. All 194; R. R. Co. v. R. R. Co., 2 Gray 1, and cases cited in note 4.
474: Charles River Bridge v. Warren Bridge, 7 Pick. 7 Bridge Co. v. Bridge Co., 7 N. H. 35; Brewster v.
344; R. R. Co. v. R. R. Co., 2 Gray, 1; Toll Bridge Co. Hough, 10 N. H. 143; Backus v. Lebanon, 11 N. H. 19;
v. Conn. River Co., 7 Conn. 28. Thorpe v. R. R. Co., 27 Vt. 140; Brainard v. Colchester, 31 Conn. 417; Mott v. R. R. Co., 30 Penn. St. 9;
9 Church v. Philada., 24 How. 300; Brainard v. ColBank v. Debolt, 1 Ohio (N. S.) 591; Bank v. Bond,
chester, 31 Conn. 407; see also Commonwealth v. Bird, Ibid 622; Knoup v. Bank, Ibid 603; Manufacturing
12 Mass. 443; Dale v. Governor, 3 Stew. 387. Co. v. Saginaw, 19 Mich. 259: R. R. Co. v. Reid, 64 N.
10 Detroit v. Plank Road Co., 43 Mich. 146; R. R. Co. C. 155; R. R. Co. v. Transportation Co. 25 W. Va. 324;
v. Brownell, 24 N. Y. 345; Com. v. Essex Co., 13 Gray, R. R. Co. v. Supervisors, 35 Wis. 257; see also dissent 239; R. R. Co. v. Maine, 96 U. S. 499; Sinking Fund ing opinion of Justice Miller, (in which Ch. J. Chase Cases, 99 C. S, 700. and Justice Field concurred,) in University v. Rouse, J1 C. J. Cooley, in Detroit v. Plank Road Co., supra. 8 Wall. 441.
12 Wood's Railway Law, Vol. 3, p. 1697, quoting from 8 Bank v. Skelley, 1 Black, 436; Bank v. Ohio, 1 Ibid the case last cited.
doubts, uncertainties and ambiguities are re- transportation of persons and property is a solved against the corporation. 13
legitimate exercise of the police power has But even if the grant is exclusive in its been held by many courts of last resort. 19 terms it cannot be given the effect to abridge But the constitutionality of this class of the police powers of the State.14 The exer- legislation has been sustained upon other cise of the police power does not depend up
grounds than the police police power. In on the reservation of the right to alter or
England from time immemorial, and in this amend in the charter, general law or constitu
country from its earliest colonization, it has tion. Its exercise is an inalienable attribute
been customary to regulate ferries, common of sovereignty applicable to all corporations
carriers, hackmen, bakers, millers, wharfingand persons alike, and which no State,
ers, inn-keepers, etc., and in doing so to fix through its legislature, can divest itself. It
a maximum charge to be made for services would seem to be the prevailing opinion, and
rendered.20 Railroads are common carriers one based on sound reason, that the State
for hire, and in the transaction of their busicould not barter away, or in any manner,
ness have the same rights and are subject to abridge, or weaken, any of the essential
the same control as private individuals under powers, which are inherent in all govern
the same circumstances. 21
When a corporaments, and the existence of which, in full
tion accepts a charter authorizing it to do vigor, is important to the well being of or
business as a common carrier it would seem ganized society." 15 By this power persons
that, unless expressly exempted therefrom, and property are subjected to all kinds of
the acceptance was with reference to the exrestraints and burdens
and it is isting law universally prevailing applicable
Again, the constitutionality of this class to railways should be made a serious ques
of legislation has been upheld by a series of The tendency of courts is towards
cases in the United States Supreme Court a liberal exercise of the police power of the
upon the ground that railroad corporations State over corporations in all matters where
are engaged in an employment which is quasi it might be exercised over natural persóns." public in its nature, the business being It is called "the power to govern men and
"affected with a public interest,” and, therethings” inherent in every sovereignty.18 That
fore, subject to the general control which the State legislation having for its purpose the
State exercises over other public employ
ment.” regulation of charges by railroads for the
The foregoing are some of the general 13 Charles River Bridge v. Warren Bridge, 11 Pet. principles underlying this question and are 420; R. R. Co. v. R. R. Co., 13 How. 71; Rice v. R. R.
settled by a long line of decisions. There Co., 1 Black, 358; Bank v. Skelley, Ibid 136; R. R. Co: v. R. R. Co., 3 Ind. 464; Collins v. Sherman, 31 Miss.
are many exceptions, limitations and restric679; Shorter v. Smith, 9 Ga. 517; R. R. Co. v. Davis, tions, however, which are noticed in their 13 Ga. 68; Stone v. R. R. Co., 62 Miss. 607; Road Co. v. Robinson, 13 Cal. 519; Bartram v. Cent. T. Co., 25 Cal. 283; Fall v. Sutter Co., 21 Cal. 237; R. R. Co. v. 19 Ruggles v. Tbe People, 91 III. 256; R. R. Co. v. State, 45 Md. 596; Fitch v. R. R. Co., 30 Conn. 38; People, ,95 D. 313; Stone v. Wisconsin, 94 U. S. 181; Bridge Co. v. Ferry Co., 29 Conn. 210; White River T. Tilley v. R. R. Co.. 5 Fed. Rep. 641; Hinckley v. R. R. Co. y. R. R. Co., 21 Vt. 590; Thorpe v. R. R. Co., 27 Co., 38 Wis. 194; State v. R. R. Co,, 19 Minn. 434; R. Vt. 140; Bridge Co. v. Fish, 1 Barb. Ch. 547; Thomp- R. Co. v. Cole, 29 Ohio St. 126; R. R. Co. v. Furnace son v. R. R. Co., 3 Sandf. Ch. 625; Hamilton Ave., 14 Co., Ibid 208; State v. Columbus Co., 5+ Ohio St. 572; Barb. 405; Wales v. Stetson, 2 Mass. 142; Camblas v. R. R. Co. v. Steiner, 61 Ala. 559. R. R. Co., 4 Brewst. 568; Com. v. R. R. Co., 52 Penn. 20 Ch. J. Waite, in Munn v. Illinois, 94 U. S. 113; see St. 506; Scales v. Pickering, 4 Bing. 448; Canal Co. v. R. also R. R. Co. v. Iowa, Ibid 155. As early as 3 W. & R. Co., 14 N. J. Eq., 321; 16 Ibid 546; State v. Chase, 5 M. Ch. 12, $ 24, a statute was enacted in England, the Ohio St. 528; State v. Noyes, 47 Me. 189; R. R. Co. v. preamble of which was as follows: “And whereas Navigation Co., 15 La. Ann. 404.
divers wagoners and other carriers by combination 14 Thorpe v. R. R. Co., 27 Vt. 140.
amongst themselves have raised the prices of carriage 15 Cooley's Const. Lim. p. * 283.
of goods in many places, to excessive rates to the great 16 Ch. J. Redfield, in Thorpe v. R. R. Co., supra, injury of the trade; Be it therefore enacted,” &c.
17 Wood on Railway Law, Vol. 3, p. 1707, resering 21 Munn v. People, 69 Ill. 80; s. C., 94 U. S. 113.
Co. v. Blake, 94 L'. S. 180; Stone v. Wisconsin, 94 U. S. 18 Ch. J. Taney, in License Cases, 5 How. 583.