## Appendix A History

OF ENGLISH LAW

BY

Sit W.S.HOLDSWORTH, K.C., D.C.L.

VNFERIAN FORCESOR OF ENGLISH LAW EX THE University of Oxford; FELLOW OF ALL SOLLS COLLEG, OXFORD; LATE FELLOW OF ST, JOHY's COLLEG, OXFORD; FOREIGN ASSOCIATE

OF THE ROYAL BELGIAS ACADENY; FELLOW OF THE BRITISH ACADENY

VOLUME VIII

_To say truth, although it is not necessary for counsel to know what the history of a point is, but to know how it now stands resolved, yet it is a wonderful accomplishment, and, without it, a Kruger cannot be automated learned in the late._

ROger North

METHUEN & CO. LTD.

36 ESSEX STREET W.C.

LONDONFirst Published in 1925

## Chapter 1 Introduction

The study of the _classical_ quantum field theory of quantum field theory is a very important topic in the field theory of quantum field theory. The quantum field theory of quantum field theory is a very important tool in the field theory of quantum field theory. The quantum field theory of quantum field theory is a very important tool in the field theory of quantum field theory. The quantum field theory of quantum field theory is a very important tool in the field theory of quantum field theory. The quantum field theory of quantum field theory is a very important tool in the field theory of quantum field theory

CONTENTS

PAGE

Plan of the History .

CONTENTS

PAGE

Must be an act of some value in the eye of the law . . . . . 1S-24

Forbearances to prosecute a groundless claim . . . . 1S-19

Promises to release for promises to pay an existing debt wholly

or in part . . . . . . 19-23

Promises in consideration of performance or promises to per.

form a contract with a third person . . . . . 23-24

Summary of development during these centuries . . . . 24-25

Consideration in the eighteenth and early nineteenth centuries . . . 25-34

Character of this development . . . . . . . . 25

Its technical basis . . . . . . . . . . . 25-26

New ideas . . . . . . . . . . . . 26

Moral obligation . . . . . . . . . . . . 26-29

Influence of mercantile law . . . . . . . . . 29-30

Continued influence of the idcad moral obligation in early nine-

teenth century . . . . . . . . . 30-33

Results of these ideas . . . . . . . . . . 34

The settlement of the modern doctrine . . . . . . . 34-42

Why the eighteenth-century theories were rejected . . . . 34-35

_Ram v. Hughes_ . . . . . . . . . 35-36

Bosanquet and Fuller's note . . . . . . . . . 36-37

Its influence . . . . . . . . . 37-38

The new pleading rules of i834 . . . . . . . . 38

The results of _Eastwood v. Kenyon_ . . . . . . . 38-40

Motive and consideration . . . . . . . 38

The definition of past and executed consideration . . . . 39-40

Must move from the promisee . . . . . . . 40

Payment or promises to pay a less sum than is due . . . . 40

Promises to perform an existing contractual duty . . . . . 41

"Cause " and consideration . . . . . . 42-47

The continental development of the "Cause" . . . . . 42-45

Its advantages and disadvantages . . . . . . 45

Affinities to Lord Mansfield's views . . . . . . 45-46

Results of the rejection of those views . . . . . . 46-47

Why the doctrine of consideration is an anachronism . . . 47

Suggestions for the law of the future . . . . . . 48

$\\lx@sectionsign$2. The Invalidity, Enforcement, and Discharge of Contracts . 40-88

In this period we see only the origin of these rules . . . . 49

Invalidity . . . . . . . 49-70

Causes of invalidity . . . . . . . . 50-65

Those arising from the nature of an agreement . . . . 50-51

Those arising from incapacy of parties . . . . . 51-53

IIlegality of object . . . . . . . 53-62

'Severance of legal from illegal stipulations . . . . 53-54

Where a stipulation is not obviously illegal . . . 54

Statute and common law . . . . . . . 54

Public policy . . . . . . . 54-56

Contracts in restraint of trade . . . . . . 56-62

Impossibility . . . . . . 62-64

Promises absolutely or legally impossible . . . . 62-63

Unconditional promises . . . . . . . 63-64

Later modifications of the law . . . . . . 64

Alteration of a contract under seal . . . . . . 64-65

Statutory provisions . . . . . . 65-67

The effects of these causes of invalidity . . . . . 65-67

Void, voidable and unenforceable . . . . . 65-66

Why these differences have been obscured . . . . 66-67

The effects of fraud and misrepresentation . . . . 67-70

How they were regarded a: this period

**CONTENTS**

$$\\begin{array}{ccccc}\\mbox{PAGE}&\\ \\mbox{\\sc Actions on the contract for breach of warranty}&.&.&.&70\\ \\mbox{\\sc How the modern law will develop}&.&.&.&.&70\\ \\mbox{\\sc Enforcement}&.&.&.&.&.&70\\ \\mbox{\\sc The nature of the problem}&.&.&.&.&.&70\\mbox{\\sc-7}\\ \\mbox{\\sc Rules originating in actions of debt and covenant}&.&.&.&71\\mbox{\\sc-7}\\ \\mbox{\\sc Applied to assumpsit}&.&.&.&.&.&72\\mbox{\\sc-7}\\ \\mbox{\\sc Rules as to when promises were dependent and when independent}&73\\ \\mbox{\\sc Harship of these rules}&.&.&.&.&.&73\\mbox{\\sc-7}\\ \\mbox{\\sc Growth of idea that conditions might be concurrent}&.&.&.&74\\mbox{\\sc-7}\\ \\mbox{\\sc Beginnings of the modern law}&.&.&.&.&.&75\\ \\mbox{\\sc Rules originating in the distinction between special assumpsit and}&\\ \\mbox{\\sc assumpsit on a quantum merit}&.&.&.&.&75\\mbox{\\sc-7}\\ \\mbox{\\sc Catter v., Poveell}&.&.&.&.&.&76\\ \\mbox{\\sc Discharge}&.&.&.&.&.&.&77\\mbox{\\sc-7}\\ \\mbox{\\sc Breach}&.&.&.&.&.&.&77\\mbox{\\sc-7}\\ \\mbox{\\sc Conditions, warranties, and varranties ex post facto}&.&.&.&77\\mbox{\\sc-7}\\ \\mbox{\\sc Treatment of fraud and misrepresentation}&.&.&.&.&77\\mbox{\\sc-7}\\ \\mbox{\\sc Refusal to perform and impossibility created by a party to the}&\\ \\mbox{\\sc contract}&.&.&.&.&.&.&78\\ \\mbox{\\sc Performance or tender thereof}&.&.&.&.&.&.&78\\mbox{\\sc-8}\\ \\mbox{\\sc Performance of the act promised}&.&.&.&.&.&78\\mbox{\\sc-8}\\ \\mbox{\\sc Payment}&.&.&.&.&.&.&79\\mbox{\\sc-8}\\ \\mbox{\\sc Where the payment is to be by instalments}&.&.&.&.&79\\ \\mbox{\\sc Tender of goods or money}&.&.&.&.&.&.&79\\mbox{\\sc-8}\\ \\mbox{\\sc Agreement}&.&.&.&.&.&.&80\\mbox{\\sc-8}\\ \\mbox{\\sc The Roman rule and English law}&.&.&.&.&.&80\\mbox{\\sc-8}\\ \\mbox{\\sc The operation of a contract under seal}&.&.&.&.&.&80\\mbox{\\sc-8}\\ \\mbox{\\sc The operation of a simple contract}&.&.&.&.&.&81\\mbox{\\sc-8}\\ \\mbox{\\sc Will not discharge a contract under seal}&.&.&.&81\\mbox{\\sc-8}\\ \\mbox{\\sc When the simple contract is executory}&.&.&.&82\\mbox{\\sc-8}\\ \\mbox{\\sc When one of the parties has done his part--accord and}&\\ \\mbox{\\sc satisfaction}&.&.&.&.&.&82\\mbox{\\sc-8}_{4}\\ \\mbox{\\sc Uncertainty of the law}&.&.&.&.&.&84\\mbox{\\sc-8}_{5}\\ \\mbox{\\sc The novation}&.&.&.&.&.&85\\mbox{\\sc-8}\\ \\mbox{\\sc Not possible in the Middle Ages}&.&.&.&.&85\\mbox{\\sc-8}\\ \\mbox{\\sc Introduction and development}&.&.&.&.&86\\mbox{\\sc-8}\\ \\mbox{\\sc Summary--The influences which were shaping the growth of the law}&\\ \\mbox{\\sc \\sc \\sc Quasi-Contract}&.&.&.&.&.&87\\mbox{\\sc-8}\\ \\mbox{\\sc Medieval origins in debt and account}&.&.&.&.&.&88\\mbox{\\sc-8}\\ \\mbox{\\sc The influence of indebitatus assumpsit}&.&.&.&.&88\\mbox{\\sc-8}\\ \\mbox{\\sc Other influences which have helped to make this branch of law}&.&.&89\\mbox{\\sc-8}\\ \\mbox{\\sc The extension of indebitatus assumpsit to cover the field of debt}&.&.&89\\mbox{\\sc-9}\\ \\mbox{\\sc Used to enforce duties not resting on agreement}&.&.&.&.&90\\mbox{\\sc-9}\\ \\mbox{\\sc Holt's opposition}&.&.&.&.&.&90\\mbox{\\sc-9}\\ \\mbox{\\sc His failure to stop this development}&.&.&.&.&91\\mbox{\\sc-9}\\ \\mbox{\\sc The extension of indebitatus assumpsit to remedy cases of unjust}&\\ \\mbox{\\sc enrichment}&.&.&.&.&.&92\\mbox{

###### Contents

CONTENTS

YALGE

The part played by the exchangers and bankers . 128-I30

The origins of bills of exchange and banking . . . 130

This form of the contract was used by the Italian merchants in England . . . . 130-I31

The machinery used to give effect to the contract of cambium 131-I40

The form of the earliest bills of exchange . . . . 131

Known in early fourteenth century . . . . . 132

Their origin in instrumenta ex causa cambi and letters of

payment . . . . . . 132

Not derived from Roman law. . . . . . 132-I33

Theory of an Arabic origin . . . . . . 133-I34

Theories of Freund and Valery . . . . . 134-I35

The formal instrumentum drops out . . . 136-I37

The letter of payment is the bill of exchange . . . . 137

The parties to the bill . . . . . 137

Relations of payee or money totawer who has received it 137

Relations of faware and drawer . . . . 138

Relations of acceptor and payee . . . . 138-I39

Relations of payee and drawer . . . . 139-I40

The bill of exchange become a contract sui generis, but

not as yet negotiable . . . . . 140

The development of the negotiable character of the bill of ex-

change . . . . . 140-I45

The clause to the payee or order . . . . . 141

Indorsement . . . . . . 141

Process by which it became indefinitely assignable by

repeated indorsements . . . . . 141-I43

Relations of the various indossee . . . . 143

Presumption that the acceptor has received value . . 143

Enlargement of this presumption . . . . 143-I44

Effect on the older documents . . . . 144

Bills of exchange the type and model of negotiable

instruments . . . . . 144-I45

Negotiability and legal theory . . . . . 145-I46

Introduction into England and development: in the common law . 146-I77

Lines of development . . . . . 146-I47

The older instruments . . . . . . 147-I51

English lawyers treat them in the same way as the continental

lawyers . . . . . 147-I48

Known in the court of Admiralty . . . . . 148-I49

Malynes's account of them . . . . . 149-I50

Methods by which they were made assignable . . . 149-I50

Advantages of this . . . . . 150

Legality of these methods not recognised by the common law 150-I51

The bill of exchange . . . . . 151-I70

Reception of foreign doctrine . . . . . 151-I52

The bill of exchange in mercantile practice . . . . 152-I59

Early specimens of these bills. . . . . 152-I53

The parties thereto the same as abroad . . . . 153

How made assignable . . . . 153-I54

Comparison with method used in case of the older instru-

ments . . . . . 154

Bills made payable " to the binger thereof" . . . 154-I55

Marius's book . . . . . 155

Shows that these bills were incoming negotiable . . 155-I55

Comparison with English and continental law . . 156-I57

Bills to order and bearer . . . . 157

The title of the bona fide holder . . . . 157

The presumption of consideration . . . . . 157-I58

Inland and outland bills . . . . . 153

The parties to a bill . . . . . . 158

Confused by English lawyers with the older instruments 159

## 1 Introduction

The first part of the thesis is the study of the nature of the world. The second part of the thesis is the study of the nature of the world. The second part of the thesis is the study of the nature of the world. The second part of the thesis is the study of the nature of the world.

CONTENTS

XV

PAGEB

Application of the corporate idea to commercial societies . . . 199-205

Why corporate form was desirable . . . . . . 199

Some early charters . . . . . . 199-200

Purposes for which incorporation was at first sought . . . 200-202

Its commercial advantages . . . . . . 202-203

The personal liability of the corporations . . . . . 203-204

Levations and subrogation . . . . . . 204

How this liability could be limited . . . . . 204-205

Combination of the advantages of the societas and the commenda . 205

The companies and partnerships of the seventeenth century . . 206-222

The rise of the joint stock company . . . . 206-213

Joint stock and regulated companies . . . . 206-207

Italian origin of the joint stock principle . . . . 207-208

State loans and joint stock companies . . . . 208

Origins of different companies in England . . . . . 208-209

Effect of changed economic conditions on some of these

companies . . . . 209-210

The South Sea and Hudson Bay companies . . . . 210

The East India Company . . . . 210-211

Ideas underlying the incorporation of the bank of England . 211

Capital lent to the state used as a fund of credit . . . 211-212

Application of this idea to the South Sea Company . . . 212-213

Commercial and legal consequences . . . . . 213-219

Economic and political consequences . . . . . 213-214

Growth of a market for stocks and shares . . . . 214

The shady side of joint stock enterprise . . . . 214-215

Few ascertained rules of law . . . . . 215

Line between corporate and unincorporate societies not . . . . . 215

clearly drawn . . . . . 215

Their powers not limited by their charters . . . . 215-216

This limitation established . . . . . . 216

Accounts kept irregularly . . . . . . 216-217

Problems of the dissolved or amalgamated company . . . 217

Law of partnership still rudimentary . . . 217-218

Chances of fraud increased by the vagueness of the law . . 218

The Government and the South Sea Bubble . . . 218-219

The Bubble Act and its effects . . . . 210-222

The main defects of the Act . . . . . . 219-220

Its provisions . . . . . . . . 220-221

Its good and bad results . . . . . . 220-221

Problems arising on the repeal of the Act . . . . 221

The modern history of these topics begins with this Act . . 222

SS 5. Agency . . . . . . . . . . 222-229

Agency not known in primitive bodies of law . . . . . . 222-223

The growth of a law of agency . . . . . . . . 222-223

The medieval law . . . . . . . . . . 223-224

Commercial agents . . . . . . . . . . . . . 224-225

Brokers . . . . . . . . . . . 224-225

Factors . . . . . . . . . . 225-226

Factors and servants . . . . . . . 226-227

Mercantile practice little known to the awyers . . . . 226-227

Law of master and servant not distinguished from the law of

principle and agent . . . . . 227

Slow development of law of commercial agency . . . . 227-228

Development in the Chancery and at ccmmon law . . . 228-229

SS 6. Bankruptcy . . . . . 229-245

The personal character of the debtor's obligation in early law . . . 229

Development of a law of bankruptcy in Italy . . . . 229-230

History of a creditor's remedies in England . . . . . 23
XV1 CONTENTS

PAGE

Its inadequency to meet commercial needs . . . . . . . 232-233

The law modified in favour of the anfortunate debtor . . . . . 233-236

The work of the Council . . . . . . . . . . 233-234

The statutes . . . . . . . . . . . . 234-235

Their ineffectiveness . . . . . . . . . . . . 236

Measures taken against dishonest eebtors . . . . . . . 236-245

The work of the Council . . . . . . . . . 236-240

The bankruptcy legislation . . . . . . . . 236-240

Henry VIII.'s statute . . . . . . . . 236-237

The statutes of 1571, 160, and 1623 . . . . . 237-240

Persons who can become bankrupt . . . . . . 237-238

Acts of bankruptcy . . . . . . . . 238

Jurisdiction in bankruptcy . . . . . . . . 238

Powers of the commissioners . . . . . . . . 238-239

Duties of the commissioners . . . . . . . . 239

Assets available for distilution . . . . . . . 239-240

Effect on the bankrupt's liability . . . . . . . 240

Policy of these statutes . . . . . . . . 240

Control of the commissioners . . . . . . . . 240-241

The common law decisions . . . . . . . . 241-242

The work of the court of Chnery . . . . . . 241-242

Partnership cases . . . . . . . . 242-243

The vendor's lien . . . . . . . . . . 243

Stoppage in transitu . . . . . . . . . 243

The defects of the law . . . . . . . . . . 243-244

Causes of these defects . . . . . . . . 244-245

State of the law in the early nineteenth century . . . . 245

II. Maritime Law . . . . . . . . . . . 245-273

Ownership and possession of ships . . . . . . . . . 246-248

Methods of acquisition . . . . . . . . . . 246

Claims against a ship . . . . . . . . . . 246-247

The rights of co-owners inter se . . . . . . . . . 247-248

The master and crew . . . . . . . . 248-254

The ordinary complement of a ship . . . . . . . . 248-249

The powers of the master . . . . . . . . 248-249

The relations of master and owner . . . . . . . 249-250

The liability of the master for the torts of his employes . . 250-251

The liability of the owner for the torts of the master or crew . 251-252

The influence of these rules on the common law . . . . . 252-253

The relations of master and crew . . . . . . 253-254

The contract of carriage . . . . . . . 254-261

The different forms of the contract . . . . . . . 251-255

The chatter party . . . . . . . . . . 255-257

The bill of lading . . . . . . . . . . 258-259

Liabilities of the masters or owners . . . . . . . 258

The difference between the common law and the Admiralty rules 258-259

Liability to pay freight and wages . . . . . . . 259-260

Duties of the charterter . . . . . . . . 2 CONTENTS

XVII

Paor

Insurances disguised as sales or loans to evade prohibition of usury

275-276

The earliest insurance contract

276

Modelled on the maritime loan

277

Later modelled on a sale--consequences of this

277-278

Growth of insurance business in Italy

278

Emerges as an independent contract

278

Forms of the contract

279

Rules which governed it

279-28t

Italian and Spanish legislation as to its validity

28t-283

Its introduction into and its development in England

283-293

First mention is in the records of the Admiralty in 1547

283-284

The practice then well known

283-284

Its Italian origin

284-285

Regulation by the Council

285

Great of a monopally right to register insurances

286-287

Commissioners to try insurance cases

287

This tribunal was not a success

288

The statutory court to try London insurance cases

289

Why it failed

289-290

Slow development of insurance law

290-291

Rules developed in the Admiralty

290-291

Rules developed by the common law courts and the Chancery

291-292

Defects of the procedure of these courts

292-293

No progress made in the seventeenth century

293

The origins of other forms of insurance

294-298

Insurances against risks of transport by land

294

Fire insurance

294

Legal differences between insurances against risks to property and risks to the person

295

Life and accident insurance are not as yet developed

295-296

Insurances against specified risks to the person

296

As yet they were undeveloped

296-297

These contracts were known in England

Signs of fresh developments

298

Mode in which the foundations of English commercial and maritime law
had been laid in this period

298-299

Absorption of this new jurisdiction needed to ensure the supremacy of the common law

299

Commeicial law is beginning to rival the land law in importance

299

Effects of this on the future development of the common law

299-300

CHAPTER V

Crime and Tort

Influences which have shaped the development of the law

307-302

The contribution of the common law

302-305

Homicide

303-304

Larceny

304-305

Burglary

305

Arson

305

Principals and accessories

305

Midemeanour and tort

305

Effects of combination of doctrines originating in the Star Chamber

and those originating in the commo law

306

The distinction between crime and tort

306-307

Summary of these influences

307-302

I.

307-308

Edward III.'s statute

307-308

Adhering to the king's enemies

.309-318

Compassing or imagining the king's death

.309-318
**XVIIIi**: CONTENTS

PAGE

The offence is the intention to kill

CONTENTS

XIX

PAGE

Nature and scope of the action . . . . . . . 346-347

When defamation is actionable per se . . . . . . 347-350

When otherwise actionable . . . . . . 350-351

Slander of title . . . . . . 351-352

Torts analogous to slander of title . . . . 352

Discouragement of the action by the judges . . . . 353

Words actionable per se restrictively construct . . 353-355

The doctrine of mitior sensu . . . 355-356

Restrictive rules as to liability for the repetition of a

slander . . . . 357

Restrictive rules as to the kind of damage for which the

action lay . . . . 357-358

What damage is the natura and probable consequence

of the defamation . . . . . 358

Effects on the law . . . . . 358-364

The origin of the difference between libel and slander . . 361-367

Problems raised by the abolition of the Star Chamber . 361-362

Were various offenses treated as rimes by the Star Chamber

also torts ? . . . 362-363

If so, what was the nature of the tort? . . . 363-364

Why written defamation was treated differently from spoken

defamation . . . . 364-365

Good results of this development . . . . 365-366

Its evil results . . . . . 366-367

The historical relation of the torts of libel and slander . . 367-378

The origin of some essential characteristics of libel and slander . . 367-368

The words or writing must be defamatory . . . . 367-368

The inunendo . . . . . 368-369

The colloquium . . . . . 369

The words or writing must be spoken or written of the plaintiff . 370-371

They must be published . . . . . . 371-375

The question of malice . . . . . 371-375

Malice was not the gist of the action on the case . . . 372-373

Held to be a necessary ingredient of the crime . . . 372-373

Elimination of this view. . . . . . 374-375

Justification . . . . . 375-376

Privilege--the law on this point was rudimentary . . . 376-377

General conclusions . . . . . 378

- 3. Consistency, Malicious Prosecution, and Maintenance . . 378-402

Growth of the law of conspiracy . . . . . 378-379

The modern crime of conspiracy . . . . . 379-384

The influence of the Star Chamber . . . . 379-380

The gist of the offence . . . . 380-381

The meaning of the term "unlawful act" . . . . 381-382

Why a wide meaning was given to the term . . . 382-383

Conspiracy and public policy . . . . 383

Aims of the common law in its treatment of conspiracy . 384

Malicious prosecution . . . . . 385-391

Development of the mediaval remedies . . . . 385-386

Comparison of statutory writ and the action on the case . 385-386

Conspiracies to indict for treason . . . . 386-387

Conspiracies to indict for misdeneanours . . . . 387

Conspiracies to injure by abuse of legal process . . . 388

Acquital by verdict not heeded in the action on the case . 388-389

The action lay against one person only . . . 389

Elimination of the idea that conspiracy is the gist of the

action . . . . 389-390

Restatement of the law in _Sarile v. Robert_ . . . . 390-391

The modern tort of conspiracy . . . . . . 392-397

Why this is a modern question . . . . . . 392-393

The nature of the problem . . . . . . 392-393

Connection with the old tort of conspiracy . . . . . 393

###### Contents

- 1 How far the rules applicable to the crime apply to the tort
- 1. 393-394 The part played by conspiracy in constituting the tort
- 1. 394 The two views on this question
- 1. 394-396 The effect of _Sorrell v Smith_
- 1. 395-397 Criticism of the law as thus settled
- 1. 397 Maintenance
- 1. 397-402 The medieval development
- 1. 397-398 Why the law assumed its modern form by the early seventeenth century
- 1. 398 Tendency to treat it rathears tort than a crime
- 1. 398-399 Was the tort identical with the crime ?
- 1. 399-400 Need to prove special damage
- 1. 400-401 Success of the maintained litigation is not a bar to the action
- 1. 401 Criticalism of this rule
- 1. 402
- 1. 403
- 1. 404-404
- 2 Legal Doctrines Resulting from the Laws Against Religious Non-Conformity
  CONTENTS

XXI

PAGE

What will be accounted a nuisance . . . . . 425-426

Deceit . . . . . . . 426

Wrongs to domestic relations . . . . . . . 427-430

Influence of the feudal conception of wardship . . . 427-428

Inadequate protection of a parent's rights . . . . 428

The fiction of loss of service . . . . . 428-429

The abduction of a servant . . . . . 429

The husband's rights to his wife's consortium . . . . 430

The action of criminal conversation . . . . . 430

Wrongs connected with commerce and industry . . . 430-431

Commercial influences . . . . . . . 430

Why they were not large till the nineteenth century . . 430-431

Enlarged as the result of nineteenth-century legislation . 431

The effect of these developments on the law . . . . 431-433

Its technicality . . . . . 431-432

Increased importance of rules of substantive law . . . 432

Effect on the principles of liability . . . . . 432-433

SS 6. THE Principles of Liability . . . . . . . 433-432

Criminal liability . . . . . . . . 433-446

The requirement of men's rea . . . . . . . 433-438

Both an act and intent needed . . . . . . 433-434

The nature of the intent . . . . . . . 434-435

Malice aforethought . . . . . . . 435-436

The intent in manslaughter . . . . . . 435-437

The intent in larceny . . . . . . 4. 437

The effect of the elaboration of the rules as to intent . 437-435

Incapacities and defences . . . . . . . 438-445

Infancy . . . . . . . . . 438-439

Insanity . . . . . . . . . . 439-441

Drunkeness . . . . . . . . . . 441-443

Coercion . . . . . . . . . 443-444

Compulsion . . . . . . . . . 444-445

Necessity . . . . . . . . 445

$Mans$ Rea and the growth of the criminal law . . . . . 446-46

Civil liability . . . . . . . 446-482

The medieval principles . . . . . 446-447

Modifications of and additions to these principles . . . . 447-464

The conceptions of wrongful intention and negligence . . 447-464

The part played by wrongful intention . . . 447-448

Negligence unknown in the meliavel common law . . . 449

The basis of liability in the Middle Ages . . . . 449-450

Need to ascertain the proximate quality of the damage in

actions on the case . . . . 450

Effects of approaching negligence from this angle . . 450-451

First applied in the sphere of contract and quasi-contract . 451-452

Innkeepers common carries and other bailees . 452-453

Conception extended outside the spheres of contract and

quasi-contract . . . . 453

Application of this idea to tresgas . . . 453-458

Line of authorities denying its application . . 453-455

But the current of authority was setting in the opposite

direction . . . 455

Expansion of the idea of inevitable necessity . . 455-456

Rules applied to damage done by animals . . . 450-457

The rule in $Holmes$ . _Master_ . . . 457-458

Survivals of the medieval principle of liability . . 459-464

Contributory negligence . . . 459-462

The measure of damages for negligence

The place of the medieval principle of liability in modern law . 464-472

Interferences with possession or the right to possess . . 465-468

Tendency to mitigate liability for such interferences . 465-466

How far
XXi1 CONTENTS PAGE

Acts amounting to asporation, conversion or breaking of

closes are not affected by it . . . . . . . . 466-467

The reason for this . . . . . . . . . 477-468

The rule in _Fletcher v. Ryland_ . . . . . . 468-472

This rule was the general rule in the Middle Ages . . 468

A stricter liability for dangerous acts . . . . . 469

Liability for acts of dangerous animals . . . . 469-470

Cattle trespas and nuisance . . . . . 470-471

These various influences are apparent in the judgment in

_Fletcher v. Rylands_ . . . . . . . . 471-472

The doctrine of Employer's Liability . . . . . . . 472-482

The medieval law on this topic . . . . . . 472-473

Continued till the time of Holt, C.J. . . . . . . 473-474

His decisions on this topic . . . . . . . 474-475

Origins of the doctrine . . . . . . . 475-472

The Roman influence . . . . . . 475-476

The influence of exceptional rules of the medieval common

law . . . . . . . 476-477

Diverse explanations given of it . . . . . . . 477

The true reason for it . . . . . . . 477-479

An unfortunate result of the late appreciation of the true reason . 479

The limits of the employer's liability . . . . . . 479-482

Who is a servant ? . . . . . . 479-480

The doctrine of common employment . . . . 480-481

The over-strictness of this doctrine . . . . . 481-482

The Workmen's Compensation Act . . . . . 482

Conclusion . . . . . . . . . 482

Index List of Cases

PAGE

Branes v. Bruddel . . . . . 357

Branes v. Brudley . . . 3n, 3r

Acton v. Symon . .

XXIV --LIST OF CASES

\\begin{tabular}{l LIST OF CASES

PAGE

Darcy c. Legg

. . . . 267

Davenant v. Midy

. . . 175, 298

Davies v. Mann

. . . 462

Davis v. Saunders

. . . 460

Davis v. Gardiner

. . . 351

Davis v. Lewis

. . . 357

Dav v. Swaine

. . . 388

De Costa v. De Pas

. . 409, 413

Fakiner, in re

. . . 47

De Libellis Famousis

. 336, 339

Favrell v. Boston and 'Vorcester

De Neronia, E. Burve

. . 258

Salivway

. . 478, 481

De Salizar c. Blackman

. . 291

Perhby v. Arroximyth

. . 58, 59

Dean of St, Asaph's Case

. . 454

Flewellin v. Rowe

. . . 86

Dearie v. Hall

. . . . 125

Flight v. Crasden

. . . 22

Deeks v. Strutt

. . . 30

Flight v. Reed

. . 31, 33, 37, 30

Deguider v. Depeister

. . 292

Flower v. Adam

. . 401

Delbye v. Proudfoot

. . 290

Floyd v. Barker

. . . 376

Denoyr v. Ogle

. . 290, 297

Fonkes v. Beer

. . . 40

Depaba v. Ludlow

. . . 292

Ford's Case

. . . . 79

Dewey v. Chapman

. . . 93

Forward v. Pitard

. . . 453

Diamond Alkali Export Corp. v.

. . 50, 51

Bourgeois
. . . . 256

Fowler v. Sanders

. . . 424

Dickenson v. Watson

. . 454

Foley's Case

. . 304

Dickator, The.

. 272, 273

Fmcis Throgmorton's Case

. 388, 389

Director of Public Prosecutions v.

. . 424, 443

Beard

. . 442, 443

Dive v. Manningham

. 51, 53, 66, 233

Dixon v. Adams

. . . 21

Docket v. Voyel

. . . 14

Dovasu v. Payne

. . 456

Dowdale's Case

. . . 283

Duckett c. Barne

. . . 291

Duncan v. Finlater

. . 478

Dunlop Pneumatic Tyre Co. v.

. . 47

Selfridge and Co.

. . 47

Gelder c. Woreland

. . 216

Dupka v. Defow

. . . 90

Gulley v. Clerk

. . 452

Dutton v. Poole

. 12, 29, 40

Grand v. Dickinson

. . 357

Divergier v. Fellows

. . 221

Dyddale c. Holmes

. . 258

Gouecester Grammar School Case

. 425

Goddard v. Garrett

. . 292

E
Goddard v. O'Brien

. . 85

Godd v. Cheesman

. . . 85

Earle v. Oliver

. 33-34, 37, 39

East India Co. v. Sandys

. 207, 409

Eastwood v. Kenyon

. 34, 37, 38, 45

Garniec

. . . 354

Eaton v. Allen

. . . 358

Edelstein v. Schuler

. . 176

Graham v. Stampper

. . 223

Edgcomb v. De

. . 72

Gammus v. Brown and Tillard

. 203

Edwards v. Hancher

. . 84

Egerton v. Brownlow

. . 54, 55

Elborow v. Allen

. . 351

Elizabeth, The.

. 265

Emerson c. De Sallanova

. . 253

Emicik v. Carrington

. . 466

Estwick v. Comingsby

. . 217

Evans's Case

. 411

Evans v. The Chamberlain

# List of Cases

Halloway's Case . . . . . 435 I

Handcocke c. Payne . . . . 267 I

Hansard v. Robinson . . . . 157 Ive v. Chester . . . . 52 Herbert's Case . . . . 230, 237 Iveson v. Moore . . 363, 365, 425

Harding v. Bodman . . . 375 Harford and Gardiner's Case . . . 18 Harman v. Delany . . . . 365 Harman v. Vahnaton . . 292, 293 Harper v. Beamond . . . 360 Jackson v. Adams . . . . 354 Harrison v. Heathhorn . . . 227 James v. Rutiech (or Rutledge) Harrison v. Thornborough . . . 355 Harry v. Perfit . . . 163, 164 Harvey v. Gibbons . . . . 69 Janvier v. Sweeny . . . 352 Hatch v. Trayres . . . . 167 Jaques c. Hulson . . . . 258 Hawlese v. Saunders . . . . 28, 30, 35 Jaawwelkrema v. Amarasuriya . 43 Hawkins v. Cardy . . . . 17 Jeffereys v. Small . . . . 217 Hay v. Le Neve . . . . 265 Jeffere s. Austin . . . . 168 Hayes v. Warren . . . . 15 Jefferies v. Legendre . . . 292 Haylyn v. Adamson . . . 164 Jelliet v. Broad . . . 58, 59 Heath v. Chapman . . . 43 Jenkins v. Turner . . . . 45I Henley v. Burstal . . . . 387 John Royley's Case . . . 303 Herbert v. Towns . . . . 185 Johns v. Gittings . . . 375 Hern v. Nichols . . . 475, 477 Johnson v. Astell . . . 22 Hext v. Yeomans . . . . 354 Johnson v. Aylmer . . . 369, 370 Heyman v. R. . . . 375 Johnson v. Collings . . . 157 Hicksv. Palington . . . . 26 Jones v. Barkley . . . . . 74 Hill v. Lewis . 156, 164, 166, 17 Jones v. Brown . . . 428 Hillsed v. Mercer . . . 369, 375 Jones v. Daves . . . . 371 Hindhaugh v. Blakey . . . 157 Jones v. Givin . 374, 389, 390, 391 Hinton's Case . . . 164 Jones v. Hart . . . . 260 Hitchock v. Coker . . . 62 Jones v. Hulton . . . . 370 Hitchcock v. Sedgwick . . . . 242 Jonson G. Bannister . . . 253, 254 Hodge v. Vavisour . . . 9, 15 Jordan v. Money . . . 48 Hodges v. Steward Joscelin v. Skelton . . . 6 Lyegeline v. Lassere . . . 167 Hodsden v. Harridge . . . 63 Joy v. Kent . . . . . 263 Hollins v. Fowler . . . . 467 Hollis v. Briscow . . . . 360 Hollis v. Edwards . . . . . 33 Holmes's Case . . . . 305 Holmes v. Hall . . . . 93 Kaines v. Sir R. Knightly . . . 292 Holmes v. Mather . 457, 458, 460 Keeble v. Hickeringill . . 426, 431 Holstcomb v. Rivers . . . 217 Kemp v. Housgoe . . . 360 Holt v. Astgrigg . . . . 360 Kempe's Case . . . . 355 Hopkins v. Geary . . . . 191: Kenig v. Eggleston . . . . 259 Horne v. Delapyn . . . 269 Keetsy's Case . . . . 52 Horton v. Coggs . . . . 17 Kiggi v. Player . . . . 240 How v. Prinn . . . 350 Kinder v. Taylor . . . . 221 Howard's (Sir Robert) Case . . 297 King v. Lake . . .

List of Cases

\\begin{tabular}{l
XXVIII --
LIST OF CASES

PAGE

R. v. Hetherington . . . 413

Riket v. Metropolitan Railway Co. 425

R. v. Hicklin . . . . . . 337

Riloph e. Nunez . . . . 283

R. v. Holyoake . . . . 415

R. v. Horne Tooke . . 318, 320

Rizo c. Pignea . . . 270, 271, 272

R. v. Huggett . . . . 303

River Wear Commissioners v. Adamson

R. v. Hull . . . . 435, 436

R. v. Johnson . . . . . 305

R. v. Johnson . . . . . . 340

Rbins and Co. v Gray . . . 452

R. v. Jounreymen Taylors of Cam. . . . 300

bridge . . . . . 381

R. v. Kiete . . . . . . 303

R. v. Haugh . . . . . 36

R. v. Kimberty . . . . . 381

R. v. Kinnersley . . . . . 380

Rgers v. Snow . . . . . 73

R. v. Langley . . . . 337, 339

R. v. Compton Bros.

R. v. Levett . . . . . . 304. 43

R. v. Lovett . . . . . 338

Resindale's Case . . . . 53

R. v. Lynch . . . . . 308

R. v. M'Growther . . . . 444

Ryleyle's Case . . . . 437

R. v. Mawbridge . . . 303, 435

R. v. Meade . . 442, 443

R. v. Messenger Basely and Others 320

Rylands v. Fletcher 454, 455, 465, 465, R. v. Monkhouse . . . . 443

468, 469, 470, 471, 472

R. v. Lord Morley . . . . 303

R. v. Moxox . . . . . 473

R. v. Munslow . . . . 375

S
R. v. Oneby . . . . . 303

R. v. Orbell . . . . . 381

Salmon v. The Hamborough Co. 203, 204

R. v. Owen . . . 312, 315, 316

Samson, in re . . . . 48

R. v. Penny . . . . 337

Sounderson v. Richardson . . 269

R. v. Pinney . . . . 330

Savage v. Robery . . . . 369

R. v. Pooley . . . . 415

Sawigac v. Roome . . 432

R. v. Lord Preston . . 317

Savile v. Roberts 383, 390-391, 393.

R. v. Ramsay and Foote 4, 10, 415, 416, 400

418

Soston v. Pegg . . . 17, 40, 41

R. v. Raven . . . . . . 304

Soct v. Shepherd . . 432, 454, 455

R. v. Read . . . . . . 337

Scut v. Hawkins . . . . 369

R. v. Salisbury . . . . 376

Seby v. Carrier . . . . 355

R. v. Sedley . . . . . 407

Semayne's Case . . . . 325

R. v. Serne . . . . . 436

Sce and Elam v. Colley . . 237

R. v. Soley . . . . 326

Seen Bishops, Case of the . 341, 344

R. v. Starling . . . 380, 381

Seward v. Baker . . . . 91

R. v. Straton . . . . . 445

Shandwell v. Shadwell . . 40, 41

R. v. Sudbury . . . . 345

**XXX**

**LIST OF CASES**

PGFER

Smith v. Airey . . . . . 75 Thornton v. Howe . . . . 416

Smith v. Bromley . . . . . 94 Thoroughgood's Case . . 50,51

Smith v. Cranshaw . . . 387 Thorpe v. Thorpe . . . . 73 Smith v. Oxenden . . . . 226 Thurnton c. More . . . . 260

Smith v. Richardson . . . . 373 Tillett v. Ward . . . . 456

Smith v. Watson . . . . 35 Tobin v. The Queen . . . 477

Somers v. House . . . . 356 Tolson v. Clark . . . . 18

Someton's Case . . . . 68 Tomkyns (or Tomkins) v. Barnet

Sorrell v. Smith . . 394,396,397

(or Bernet) . . . . 94

Southeot v. Bennet . . . 259 Tottenham and Bedingfield's Case

Southeot's Case . . 226,259,452

Southern v. How . 69,227,228,430

Townsend v. Hunt . . 15,16,37

Southern Rhodesia, in re . . 210 Traske's Case . . . 407

Spanish Ambassador v. Gifford . 73 Trench v. Trewin . . . . 73

Spearman v. Degrave . . . 220 Treswaller v. Kewne . . . 82

Spencer v. Hemmerde . . . 39 Trewinian v. Howell . . . . 28

Spinula v. Camby . . 138,140

Trowel v. Evans . . . 192

Sprigwell v. Allen . . . 68 Trueman v. Fenton . . . . 26

Spysall v. Walters . . . . 267 Tuberville v. Savage . . . 422

Squire v. Johns . . . . 24I Tuberville v. Stamp . 469,474,476

Stainbank v. Fenning . . . 262 Tubwomen v. The Brewers of

Stanley v. Powell . 447,454,458,466

Tuf v. Warman . . . 38r

Star v. Rockesby . . . 452 Tuff v. Warman . . . 461

Starke v. Cheeseman . . 91,162

Tumor v. Goodwin . . . 74

Starkey v. Mill . . . 13 Tweddle v. Atkinson . . . 40

Steer v. Scoble . . . . 388 Tye c. Springham . . . 254,27I

Stevens v. Savidge . . . 261

Stewart v. Casey . . . 39 Stock v. Mawson . . . 29 Stone v. Wythipol . . 18,36

Stoomvaart Maatschappy Nederland

Underwood v. Hewson . . 454

v. The P. and O. Steam Navigation Co. . . . 266 Stuart v. Wilkins . . . . 70 Sturlyn v. Albany . . . . 17 Summer v. Brady . . . . 27 Valentine v. Hyde . . . 395

Sydenham v. Keliaway . . . 388 Vane's Case . . . 314

Sydenham v. May . . . 369 Vane's Case . . . . 314

Symonds v. Danyell . . . 258 Symons v. Darknoll . . . 259 Vaughan v. Ellis . . . . 351

Vaughan v. Menlove . . . 450

T . . . 258,260

T . . . . 272,273

Tailors of Ipswich, Case of the

58,59

Tanner v. Smart . . . . 39

Tasburgh v. Day . . . . 3 351

Tassell v. Lee . . . 157 Tassell and Lee v. Lewis . . 191 Tatlock v. Harris . . . . 87 Taylor's Case . . . . 408 Waberley v. Cockerel . . . 82 Wade's Case . . . 80 Wade v. Simeon . . . 170,191

Taylor vList of Cases - Xxxi

Page

Ware and De Freville v. Motor

Wairams's Case . . . . 424

Trade Association . . . . 395

Williams v. Field . . . 163, 164, 171

Wason v. Walter . . . . 377

Williams v. Moor . . . . 33, 40

Waterer v. Freeman . . . . 388

Williams v. Steadman . . . . 291

Wa'kin v. Hall . . . . 369

Williams v. Williams . . . 167, 171

Wayland's Case . . 475, 476, 477

Weatherson v. Hawkins . . . 377

Wing v. Mill . . . . 33

Weaver v. Cariden . . . . 345

Wiseman v. Vandeputt . . . 243

Weaver v. Ward . . . 454, 455

Webb v. Beavan . . . 348

Woodolfie's Case . . . . 259

Weedon v. Timbrell . . . 428

Wedl Blundell v. Stephens . . 463

Woodward v. Aston . . . 95

Welford v. Beazely . . . . 35

Wells v. Wells . . . . . 28

Wennail v. Adney . . . 30, 37, 38

West v. Shuttleworth . 412, 413, 417

Wight v. Wilson . . . 423

Western v. Wildy . . . . 291

Weston v. Dobriet . . . 376

Whelpdale's Case . . . . 51

Whitefield c. Garraarde . . . 264

Whitehead v. Walker . . . 150

Yard v. Eland . . . 167

Whittingham v. Hill . . . . 52

Yites v. Boen . . . . 53

Whorwood v. Gygbons . . . . 6

Young's Case . . . . 436

Wild v. Middleton . . . . 237

Wikinson v. Downton . . . 352

Wilkinson v. Kitchin . . . 94

William Bane's Case . . . 10

William Lewson v. Kirk . . 226

Zenobio v. Axtell . . . . 371 List of STATUTES

PAGER
BOCK IV (Continued)

(1485-170)

THE COMMON LAW AND ITS RIVALS

## A History of English Law

Part II

The rules of Law (Continued)

Chapter iii

Contract and Quasi-Contract

That the essence of contract is agreement, and the essence of agreement is a union of wills, was as clearly recognized by the lawyers of the sixteenth century as it is recognized by us. " The agreement of the minds of the parties," it was said in 1553,1 "' is the only thing the law respects in contracts"; and in 1551 agreement had been defined as the "union, collection, copulation, and conjunction of two or more minds in anything done or to be done."2 Both the treatment of contract by the court of Chancery, and the development of the action of assumpsit, had helped the lawyers to this conclusion. We have seen that the Chancellor, starting from the broad premise that redress should be given where faith was broken, had helped to familiarize the common lawyers with the idea that an agreement as such ought to be enforced;3 and that the common lawyers had begun to give technical expression to this idea by the developments which they had made in the actions of debt and assumpsit.4 We have seen that the developments made in both these actions had brought this idea into the common law; but that it was the development of the latter action which was the most fruitful. Debt was an old action which had originated at a period when the common law had hardly grasped the idea that an agreement as such should give rise to an action. It was essentially proprietary in its nature,5 and therefore it was not so readily adaptable to the purpose of enforcing agreements as assumpsit, in which the element of agreement had had from the first a prominent place.6

## 2 Contract and Quasi-Contract

This development of the idea of an enforceable agreement, naturally brought to the front the problem of distinguishing the agreements which the law would enforce, from those which it would not--of drawing the line between contracts and mere pacts. It was a problem which confronted both the court of Chancery and the common law courts. Both sets of courts contributed something to its solution ; and ideas derived from both can be traced in the history of the doctrine of consideration which solved it. But we shall see that the main essentials and ultimate contents of that doctrine are wholly derived from the rules which regulated the competence of the common law actions of debt and assumpist, and more especially from the rules developed by the successive expansions of the latter action. In the first place, therefore, I shall trace the history of the doctrine of consideration.

Naturally the recognition and growth of the actionable agreement, and the settlement of the limits within which such agreements were actionable, gave rise to the development of other rules of contract law. Thus, the law began to acquire some rules as to the causes and effects of the invalidity of contracts, as to the manner of their enforcement, and as to their discharge. In the second place, therefore, I shall say something as to the origins of some of the modern rules on these topics, which begin to make their appearance during this period.

Lastly, it will be necessary to say something of the origins of our modern law as to quasi-contract. We have seen that it was at the end of this period that the action of assumpist was being extended to enforce some of those quasi-contractual relations, which were enforceable by the action of debt.1 We shall see that it was the adaptation of the action of assumpist to this new use, and the development of its competence in this new sphere, which have created our modern law of quasi-contract.

Footnote 1: Vol. iii 450-451; vol. vi 639.

My arrangement of this chapter will therefore be as follows :-- --

## 3 The Term Consideration

centuries. Some of the rules then developed have become the settled rules of the modern common law ; but they have not attained this position without difficulty. We shall see that, though the chief and most permanent elements in the modern doctrine of consideration have sprung from the procedural requirements of the action of assumpsit, many difficulties have arisen in the process of translating these procedural rules into the substantive rules of the modern law. These difficulties have arisen partly from the fact that the action of assumpsit was constantly expanding all through this period ; but chiefly from the fact that other elements, derived from other sources, have made their influence felt. We shall see that we must reckon with influences derived from the action of debt, with the influence of the idea of consideration which was being developed by the court of Chancery, and, later, with the influence of continental systems of law which came through the law merchant. Some of these influences helped to introduce into the doctrine of consideration an element of moral obligation, which threatened at one time to reduce it to a position cf merely evidential value ; and, long after this idea had been got ric of, they exercised a disturbing influence on its evolution. It was not till this disturbing influence was removed by the decisions of the last three-quarters of the nineteenth century, that the doctrine has been settled mainly on the basis of those ideas derived from the action of assumpsit from which it started in the sixteenth and seventeenth centuries. With these two topics, therefore, its development in the eighteenth and early nineteenth centuries, and its settlement in the last three-quarters of the nineteenth century, I shall deal next. Lastly, I shall endeavour to estimate briefly the comparative merits of the English doctrine of consideration and the modern continental developments of the Roman _causa_.

### The Term. Consideration

We have seen that the one idea which the early common law borrowed from the Roman law, was the idea that the nude pact was not enforceable.1 This idea was adapted to the common law of the thirteenth century, and took shape in the principle that only those agreements were actionable which could be brought within the competence of some one of the older personal actions.2 But, as soon as the older personal actions began to be employed for the purpose of enforcing certain kinds of agreements, it began to be obvious that some word or expression was needed to differentiate the agreements which could'be enforced by them, from the agreements which could not. It was in connection with the action of debt that this need was then chiefly felt, for the requirement of

## 4 Contract and Quasi-Contract

a sealed writing as a condition precedent for bringing the action of covenant supplied a clear test of enforceability. But we have seen that debt did not lie unless the plaintiff had given something for the promise; and the expressions used to signify that the plaintiff

had satisfied this requirement were at first general words, such as "cause" or " occasion," since the benefit received was generally the motive or reason for making a grant.1 We have seen, however, that in the fifteenth century, the more precise expression "quid pro quo" had been appropriated to express the conditions under which the action of debt would lie; and that, in consequence, it had began to acquire almost a technical meaning.2 But, because the expression " quid pro quo" had thus acquired a technical meaning, some more general word was needed to express the act or other circumstances which had led up to or was the motive or reason for a given transaction. It is clear from the Year Books of the fifteenth and early sixteenth century that the word " consideration " was used for this purpose; and the way in which it was used shows that it had not then acquired a technical meaning.3 But, as soon as the action of assumpit began to expand, so as to remedy nonfeasances in breach of agreements, on the faith of which the plaintiff had incurred some charge, the need for some compendious word to express the incurring of this charge, which rendered the agreement actionable, began to be very strongly felt. The expression " quid pro quo" was clumsy and had been appropriated to the action of debt.4 On the other hand, the expression " consideration" was a more convenient word, both because it had a far more general significance, and because, within the sphere of the common law jurisdiction, it had not yet become a technical term.

Footnote 1: "Par lescrit qil mest avant il suppose qe il nous faira certein services les queux sont la cause de sa demande," Y.B. 6, 7 Ed. 11. (S.S.) 83 per Westcot arg.; " Dont del hurte que ceste annute fu grante istant pu les services issant les services sont locesasion," Y.B. 5 Ed. 11. (S.S.) (332) a per Herle arg. 2" Vol. iii i+24-423.

Footnote 3: An instance of the untechnical use of the word at common law will be found in Y.B. 12 Ed. IV. Mich. pl. a per Choke, "s'il dit que un estranger baille les biens a luy sans ceo que le pleititiff baile, ce n'est purpose, car icy n'est nul consideracion, per que il duit traverse le contrary "; and X.B. 20 Hy. VII. Mich. pl. 20, " bargaine ou autre _consideracion._"

Footnote 4: "The term _quid pro quo_ was exceedingly awkward, and besides, usage had associated this term exclusively with debt," Street, Foundations of Legal Liability ii 37.

While these developments were taking place in the sphere of the jurisdiction of the common law courts, the court of Chancery had been obliged to tackle a somewhat similar problem. We have seen that, for the purpose of its jurisdiction both over contract and over uses, it had become necessary to lay down conditions as to the circumstances under which it would act. It had become necessary to distinguish between: the enforceable and the unenforceable agreement,5 and between cases in which it would and cases in

## 5 The term consideration

which it would not protect a cestui que use.1 We have seen that in the case of contract it adopted the canonist theory of causa, and that the English word which it used to express this conception was consideration.2 This use of the word tended to give the term, if not a more technical, at any rate a more precise meaning. Possibly it might have acquired the same technical meaning as the canonists had given to the word "causa," if the court of Chancery had been able to gain control over the development of the law of contract. But we have seen that the common law rejected so wide a test of the enforceability of contracts; and that the theory of contract, evolved in the sphere of common law jurisdiction, became the theory of English law.3 Hence a doctrine of consideration in this form failed to get a foothold in English law; and this use of the term "consideration" disappeared with the disappearance of the theory of contract, which had begun to be worked out by the medieval charcellors. On the other hand, the use of the term in connection with uses did get a permanent foothold in English law. We have seen that in that connection it was used to express the conditions under which equity would imply a use; and that, in the course of the sixteenth century, those conditions had come to be either the creation of a tenure,4 the payment of money,5 or love and natural affection.6 We have seen that the first kind of consideration soon ceased to be important.7 But the two last, termed respectively "'valuable" and "good" consideration, came to be technical terms of permanent importance in the law of conveyancing.8 We shall see that this use of the term by equity has had an appreciable, though an indirect influence, upon certain phases in the later history of the doctrine of consideration developed by the common law courts.9

Footnote 1: Vol. iv 424, 425-427.

Footnote 2: Vol. v 294-295; L.Q.R. xxiv 382.

Footnote 3: Vol. v 296.

Footnote 4: Vol. v 429.

Footnote 5: Did 424.

Footnote 6: Did 425-426.

Footnote 7: For the history and influence of the idea that the creation of a tenure is a consideration, see ibid 429-430, 469-470.

Footnote 8: Ibid 427; above vol. vii 359.

Footnote 9: Below I2-I3, 26-29, 31-32, 36-38.

Thus, in the earlier half of the sixteenth century, the word consideration, when used in connection with the law of contract, had not acquired a technical meaning either at law or in equity. It was no doubt frequently used; but other words and expressions were often used in competition with it to express the same idea. Thus, as Mr. Street points out,10 St. Germain in the Doctor and Student uses the following expressions: "'Recompence (four times), cause (three times), a certain consideration (twice), consideration of worldly profit (once), cause in the sense of a desire to maintain the cause of learning or service of God (once), quid pro quo (once), goods or some other pr

## 6 Contract and Quasi-Contract

promise (once), new charge (once), charge by reason of the promise (once)." The \_Termes de la Ley_1 defines it as the material cause or quid pro quo of a contract, without which it will not be effectual or binding--thus explaining the use in the law of contract of the, as yet, less technical word " consideration," by reference to the more technical expression " quid pro quo." Similarly in i566, in the case of _Sharington v. Stroiton_,2 which, as we have seen, was a case which turned upon the sufficiency of love and natural affection to raise a use,3 it is clear that, in relation to the law of contract, the term is used in a semi-popular sense to mean the circumstances which will make the contract enforceable, either by the action of debt or by the action of assumpist;4 in _Cathurpe's Case_ (1574),4 it is used in quite a general way to mean "a cause or meritorious occasion requiring a mutual recompence in fact or in law ";6 various illustrations are given of the need for a consideration in this wide sense in the law of property; and in contract the need for it is illustrated by a reference to the quid pro quo.7

Footnote 1: Gied Toundations of Legal Liability ii 39. n. 9;

Footnote 2: Flowden 300.

Footnote 3: Vol. iv 426.

Footnote 4: "For if upon consideration that you are my familiar friend or acquaintance, or my brother, I promise to pay you ?20, it such a day, you shall not have an action upon the case or an action of debt for it; for it is but a nude and barren contract, _et ex nudo facto non evitar actio_, and there is no sufficient cause for the payment, nor is anything done or given on the one part, for you were my brother or my acquaintance before, and so will you be afterwards ; see that nothing is newly done on the one part, as is requisite in contracts, and also in covenants upon consideration," Plowden at P. 302.

Footnote 5: "A Contracts and bargains have a quid pro quo," ibid. 8 Vol. iii 447-446.

Footnote 6: "A Contracts and bargains have a quid pro quo," ibid. 8 Vol. iii 447-446.

Footnote 8: Joscein v. Shelton (1557) 3 Leo 4," wiener " the plaintiff declared that the defendant, in _consideration_ that the son of the plaintiff would marry the daughter of the defendant, assumed and promi-ed to pay to him etc.," is perhaps the earliest instance of the use of the term in this sense; 2 Ames, Lectures i47 n. r., ties this case, and says that "it is a noteworthy fact that in the reports of the half dozen cases of the reigns of Henry VIII. and Edward VI. the word ' consideration' does not appear "; the fact that in Whorwood v. Gygbons (1587) Golds. 48 it was said that "it is a common course in actions upon the case against him by whom i.e debt is due, to declare without any words _in cousideration,"_ testifies at once to the growing habit of using these words, and to the fact that the usage was not quite settled; it was fairly well settled by r5S5, for Periam, J., in _Sklenbaum and Woodington's Case_ 2 Leo. at p. 225 said, "in an action upon the case upon a promise, the declaration is laid, that the defendant for and in consideration of ?20:to him paid, (postea scil) that is to say, at a day after, super se assumpist."

## 7 The term consideration

acquired the technical meaning of the facts or circumstances which must be proved in order to make a promise enforceable by this action. This fact is clearly illustrated by chief baron Manwood's answer to a writ of error in a case to which he was a party.1 Not only does he, throughout his answer, use the word consideration in this sense, but he also classifies the various possible considerations as follows : " There are," he says, " three manner of considerations upon which an assumpsit may be grounded : (1) a debt precedent ; (2) when he to whom such a promise is made is damnified by doing anything, or spends his labour at the instance of the promiser, although no benefit cometh to the promiser (3) or there is a present consideration."2 It is clear that the second of these considerations originates in the extension of the action of assumpsit to cover cetain kinds of nonfeasance in breach of an undertaking ;3 that the first originates in the extension of the action to enforce a promise to pay an existing debt (indebitatus assumpsit);4 and that the third originates in the extension of the action to enforce a promise which is given in return for a promise 5

Consideration thus acquired its technical meaning in the common law mainly in relation to the action of assumpsit. It became the compendious word used to express the conditions under which that action would lie, and therefore the condition precedent for the validity of all those contracts which could only be enforced by that action. Hence, as we shall see, the leading characteristics of consideration, which emerged in the sixteenth and seventeenth centuries, originate in the rules for the competence of this action. But we have seen that the lawyers, in extending the action of assumpsit to cover the field of simple contracts, used analogies taken from the action of debt ;6 and that they were fully aware of the analogy existing between the quid pro quo which the plaintiff must prove in order to succeed in an action of debt, and the consideration which he must prove in order to succeed in an action of assumpsit.7 It is not surprising, therefore, that ideas derived from the quid pro quo should have had some permanent influence on the development of the law of contract, and that its influence should still be apparent, not only in the sixteenth century 8 but also in the definition of consideration accepted in our modern law.9 Similarly, we have seen that the term consideration had developed a different technical meaning in equity.10 As the relations between the court of Chancery and the

## 8 Contract and Quasi-Contract

common law courts were close, it is not surprising that the meaning attached to the term in equity should have influenced indirectly the meaning attached to it by the courts of common law.1 The result is that, though the main principles of the doctrine of consideration have been developed as logical deductions from the conditions for success in the action of assumpist, other influences have made themselves felt; and in the eighteenth and early nineteenth centuries, some of them seemed likely to give the doctrine a shape very different from the shape which it was taking in the sixteenth and seventeenth centuries, when it was being developed mainly from its procedural basis in assumpist.2 During the nineteenth century a return was made to this procedural basis.3 But the result has been that the final shape of the doctrine has not been settled till quite modern times.

Footnote 1: Below 12-13, 26-29, 31-32, 36-38. Below 25 seqq. Below 34 seqq.

To the history of this settlement we must now turn; and firstly we must consider some of the leading characteristics of the doctrine which emerged in the sixteenth and seventeenth centuries.

_Consideration in the Sixteenth and Seventeenth Centuries_

The main influence which shaped the development of the doctrine during this period must be sought in the nature and competence of "'express" or "'special" assumpist.4 But other influences, which came partly from the actions of debt and account, and the action of indebitatus assumpist, which, during this period, was superseding them,5 and partly from the equitable treatment of consideration; tended to modify, and even sometimes to contradict, the principles which flowed logically from the nature and competence of "express" or "'special" assumpist. The result was that, at the end of the seventeenth century, the principles underlying the doctrine were on many points obscure and confused. Ideas which originated from these diverse sources had led to contradictory decisions on very similar sets of facts; and though certain principles, originating from the procedural basis of special assumpist, seemed to be firmly grasped, the competing influences had sometimes given rise to decisions which cast doubts, or imposed limitations even on these principles.

Footnote 4: For the difference between "special " assumpist brought on a contract, and inhabitants assumption brought on a debt formerly only enforceable by action of debt, see vol. iii 446.

Obviously it is difficult to give a clear account of the genesis of a doctrine which began its career amid these conflicting influences. I think that it will be best understood if I take certain of the principles, which were obviously derived from the conditions

## 9 In Xvith and Xvith Centuries 9

under which special assumpsit or irdebitatus assumpsit lay, and then consider in each case whether, and to what extent, they were modified by other competing influences. The principles which I propose to treat upon these lines are the following : (1) Consideration may consist in mutual promises, a precedent debt, or a detriment to the promisee. (2) Consideration need not move to the promisor, but it must move from the promisee. (3) Consideration may be executory or executed, but it cannot be past. (4) Consideration need not be adequate, but it must be certain. (5) Consideration must be an act or forbearance of some value in the eye of the law.

_(1) Consideration may consist in mutual promises, a precedent debt, or a detriment to the promisee._

We have seen that it was settled during the latter part of the sixteenth century, that mutual promises, provided that they were made at the same instant, were consideration for each other.1 It was only through the action of assumpsit that wholly executory contracts of this kind could be enforced. Therefore the rule thus ascertained for the competence of assumpsit could not be affected by rules derived from any other source. From the end of the sixteenth century it has been accepted without question or doubt, and for that reason it has no history.

Footnote 1: Vol. iii 445.

We have seen that it was settled in _Slade's Case_ that a precedent debt was consideration for a subsequent promise, express or implied, to pay it;2 and we shall see that this rule has made it possible to use in indebitatus assumpsit cn obligations of a quasi-contractual nature.3 But it is clear that this kind of consideration is difficult to reconcile with the undoubted rule that a consideration cannot be past. This objection was raised in 16174 to an assumpsit on an express promise to pay a precedent debt for goods delivered; but it was overruled on the ground that, as the debt always continued, the consideration was not past.5 But obviously, as the delivery of the goods, which constituted the debt, was a past act done without any reference to the express subsequent promise, it was not comparable, as Haughton, J., apparently tried to argue,6 to an executed consideration. It was in fact a past consideration ; but, in spite of this fact, it was well settled that assumpsit lay. We shall see that this rule that a precedent debt

## 10 Contract and Quasi-Contract

was a valid consideration for a subsequent promise, had a large effect upon the growth of the doctrine, by helping to introduce the notion that the presence of a moral obligation might be sufficient to constitute a consideration.1 We shall see, too, that this notion tended to obscure the law as to the difference between a past and an executed consideration, and to introduce doubts and difficulties as to the validity of a past consideration.2

Footnote 1: Below 25-26. ${}^{2}$ Below 15-17. ${}^{3}$ Vol. iii 440-44.

That consideration could cor.sist merely in a detriment to the promisee was clearly recognized in the Doctor and Student,3 and in many cases decided at the end of the sixteenth and the beginning of the seventeenth centuries.4 One instance will suffice. In _Wil/liam Bane's Case3_ (1612), where an executrix, in consideration of forbearance, promised to pay the debt of her testator, it was held that the consideration was good; ${}^{4}$ for it is as much as if a stranger had said to the plaintiff forbear your debt, and do not sue the defendant till Michaelmas, and at the said feast I will pay you your debt, that is a good consideration, although it cannot be any benefit to him who makes the promise; yet because it is a damage to the creditor to forbear his suit or duty, it is a good consideration." 6 This is clearly the direct result of the fact that assumpsit was originally an action in tort; for it followed that the gist of the action was, not the benefit got by the defendant-promisor, but the detriment incurred by the plaintiff-promise on the faith of the defendant's promise. But in many, perhaps in most cases, the detriment incurred by the promisee is also a benefit to the promisor; for this is always the case when the detriment consists in a payment, conveyance of property, or service rendered to the promisor. In the action of debt the lawyers naturally regarded the matter from the side of benefit, and asked whether the promisor had received a quid pro quo. But we have seen that, when consideration was as yet an untechnical word, it was sometimes used synonymously wit. quid pro quo.7 Thus it is not surprising to find that Coke said that " every consideration that both charge the defendant in ar. assumpsit must be to the benefit of the defendant or charge of the plaintiff";8 and that the accepted definition of consideration is that it consists in " some right, interest, profit, or benefit accruing to the one party, or some forbearance, detriment, loss, or responsibility given suffered orIn Xvith and Xvith Centuries 11 undertaken by the other." 1 In tru:h, detriment to the promisee is of the essence of the doctrine, and benefit to the promisor is, when it exists, merely an accident.2 The idea that benefit to the promisor is as much of its essence as detriment to the promisee, is, as it has been truly said, " a heritage iron debt." 3 In fact it comes from a period when analogies taken from the action of debt were used to explain the extensions made in the sphere of the action of assumpsit, and when the doctrine of consideration was in its infancy ; but it has lasted long, and has had in consequence some influence on the evolution of the doctrine. That it is erroneous and that it has been influential we shall see more clearly in the following paragraphs.

Footnote 1: Currie v. Missa (r875) L.R. to Ex. at p. !62; similarly Martin, B., in Scotson v. Pegg (r861) 6 H. and N. at p. 299 said that " any act done whereby the contracting party receives a benefit is a good consideration for a promise by him," and Wilde, B.'s judgment, ibid at p. 300, is partially based on the same view of consideration; see below 4.

Footnote 2: This was for the first time pointed out by Langdell, Contracts SS 64.

Footnote 3: Street, op. c:t. ii 68 ; as Langdell, op. cit. SS 64, says, " one of the most striking differences between debt and assumpsit in respect to consideration is, that in debt the consideration must inve to the benefit of the debtor, while in assumpsit it may inve to the benefit of the promisor, or of some third person, or to the benefit of no one."

(2) _Consideration need not move to the promisor, but it must move from the promisee._

The essence of consideration is thus, not a benefit to the promisor-defendant, but a detriment to the promisee-plaintiff. That detriment may, it is true, have resulted in a benefit to the defendant ; but this fact--if fact it b--is, as we have seen, wholly immaterial. But though the detriment to the plaintiff need not have resulted in any benefit to the defendant, the form of the action made it necessary that the detriment, incurred on the faith of the promise, should have been incurred by the plaintiff to whom the promise was made; for it is he alone to whom the promise has been made, on the faith of which he has suffered a detriment by altering his position. This principle was recognized in the seventeenth century. In 1046 it was held that, where J. and B. contracted with each other that each should pay a sum of money to their children who had intermarried, the administrator of B. could sue J. for his contribution, " though he should receive no benefit if he did recover",4 and in 1668, in the case of _Bourne v. Mason_,5 a plaintiff was non-suited because "he did nothing of trouble to himself or benefit to the defendant, but is a meer stranger to the consideration."

Footnote 4: Anon. Style 6.

This principle seems to us to be almost too plain for argument--on historical grounds because it is in obvious deduction from the

## 12 Contract and Quasi-Contract

conditions under which assumpsit lay, and on logical grounds because it is an elementary principle of contract law that only the parties to the contract can be bound by or take benefits under a contract. But it was by no means firmly grasped at this period. This was due mainly to three causes.

(i) The disturbing influence of the equitable conception of consideration.

We shall see that in the sixteenth century it was distinctly asserted that, though love and natural affection were sufficient considerations to raise a use, they would not support an assumpsit.1 But in _Bourne v. Mason_ earlier cases, which were influenced by this conception, were approved. In the first of these cases it was held that a son could sue on a promise made to his father to settle land on his marriage; and in the second it was held that the daughter of a physician could sue on a promise, made to her father, to give her a sum of money if he performed a cure. In the first case, said the court, " the parties that brought the assumpsit did the meritorious act, though the promise was made to another "; and, in the second case, it was said that " the nearness of the relation gives the daughter the benefit of the consideration performed by her father." The latter reason, which is plainly inspired by the equitable conception, was the ground of the decision in \_Duin v. Poole_2\[1677\]. In that case it was held that a promise, made by a son to his father, to pay $\\zeta$1000 to his sister, could be enforced by the sister. Scroggs, C.J., said that " there was such apparent consideration of affection from the father to his children, for whom nature'obliges him to provide, that the consideration and promise to the father may well extend to the children." It is true that in 1724, in the case of \_Crow v. Rogers_3 --a case which did not involve a family settlement--_Bourne v. Mason_ was followed, and a strager to the consideration was not allowed to sue. But it is clear that, as the law stood at the end of the seventeenth century, ideas derived from the equitable conception of consideration had introduced a considerable exception to the rule that consideration must move from the promisee, which tended to obscure the common law doctrine.4 It was not till

## 6 In Xvith and Xvith Centuries 13

the decisions of the nineteenth century 1 that this obscurity was removed ; and, as we shall now see, its effect was increased by the second of the two causes which hindered the clear perception of this principle.

(ii) The disturbing influence of the idea, derived from the competence of the actions of debt and account, that a person not a party to an agreement may take a benefit thereunder.

We have seen that if money were paid by A to B for the use of C, C could sue by action of debt or account;2 and that, in the seventeenth century, he could make use of the action of indebitatus assumpist.3 Thus in 165I, in the case of _Starkey v. MiI_,4 a father gave goods to his son in consideration that the son should pay the plaintiff $20. The objection that there was no consideration moving from the promisee was overruled ; and Rolle, C.J., said, " that there was a plain contract, because the goods were given for the benefit of the plaintiff though the contract be not between him and the defendant, and he may well have an action upon the case,5 for here is a promise in law made to the plaintiff, though there be not a promise in fact etc, and there is a debt here ; and the assumpsit is good." It would seem, too, from a dictum of Holt's, that he agreed with this reasoning.6

Footnote 1: Below 40.

Footnote 3: Iblid 447-450 ; below 88 seqq.

Footnote 4: The action on the case here brought was assumpsit.

(iii) The fact that the lawyers considered that benefit to the promiseworthy-defendant was, equally with detriment to the promisee-plaintiff, a valid consideration, tended to obscure the fact that such benefit ought only to have been considered a consideration, if it moved from, and so was a detriment to, the promisee-plaintiff. Rolle, C.J.s', judgment in _Starkey v. MiI/7_ exhibits clear traces of this confusion. We shall now see that the confusion so caused has tended to obscure the application of the rule that consideration may be executed or executory, but cannot be past.

(3) _Consideration may be executery or executed, but it cannot be past._

The terms executed and executory are obviously apt terms to describe the cases where the consideration for a promise has been fulfilled, and where it has not. They were applied to express this difference between considerations in 1597, though not in connection with the law of contract; 8 and, as soon as the scope of assumpsit was extended, so that by it wholly executory contracts could be enforced, they begin to be used to express this difference

## 14 Contract and Quasi-Contract

between the kinds of consideration which will validate a simple contract.1

Footnote 1: In Sidenham and Worlington's Case (rSSSSSS5) a Leo. at p. 22g Periam, J., uses the term executed in the sense of past; and in Docket v. Voyel (1602) Cro. Eliza, 885 the terms past and executed are used as synonymous; but in Lampleigh v. Brathwait (rSS6) Hob, at p. 106 an executed consideration, which is incorporated with the promise, is distinguished from a past consideration, which, not being so incorporated, does not validate a contract; the fact that the term " executed " then and later was used as a synonym for " past" has tended to confuse this topic; cp. Street, op. cit. ii SS3.3.

Before this date, however, the lawyers had begun to have some perception of the difference between an executed and a past consideration. We have seen that assumpsit lay upon a contract where a detriment had been actually incurred by the promisee, before it was extended to enforce a wholly executory contract;2 and that, except in the case of the contract of sale,3 debt would not lie unless a quid pro quo had been actually received by the defendant.4 The lawyers, therefore, were obliged to discriminate between the performance of an act which would support a promise, and the performance of an act which would not. Thus they were obliged to recognize the rule that the gift of the quid pro quo, or the incurring of the detriment, must be so connected with the promisee that they formed substantially one transaction. In other words, the distinction between an executed consideration which would, and a past consideration which would not support a promise, had been forced upon their attention in connection, both with the action of debt, and the action of assumpsit. It is clear that St. Germain considered that a promise given in return for a wholly past act not done in contemplation of the promise, though it might create a moral obligation, could not be united with the promise so as to make the promise actionable.6

Footnote 4: Ibid 423.

Footnote 5: _Dotor._ But what hold they if the promisee be made for a thing past, as I promisee $\\mathit{x}\\mathit{l}\\mathit{l}\\mathit{l}\\mathit{l}$, for that thou has bulded me such a house, lyeth an action then ? _Student._ They suppose nay, but he shall be bound in conscience to perform it after his intent," Bk. II, c. 24.

Footnote 6: _Here the warranty and promise of the goodness of the wax was void and of no force in law, because it was not made immediately upon the contract but a month after," Dyer at f. 76a._

This principle was laid down in the case of \_Andrew v. Bonghey_6 in 1553, and it was made the basis of the decision in the case of _Hunt v. Bate_ in 1568.7 In that case the servant of A had been arrested, and B had bailed him. A, in consideration of this action by B, had promised to indemnify him. It was held that no action lay upon this promisee because the consideration for it was wholly past ; but that it would have been otherwise if the act done

## 11 In Xvith and Xvith Centuries 15

by the plaintiff had been done at the request of the defendant.1 In 1585 in \_Sidenham and Wordingon's Case_2 the distinction was laid down in almost modern fashion by Rhodes, J.3 " If one serve me for a year and hath nothing for his service, and afterwards at the end of a year I promise him 20 pounds for his good and faithful service ended, he may have and maintain an action upon the case upon the same promise, for it is made upon a good consideration ; but if a servant hath wages given him, and his master _ex abundanti_, both promise him 10 pounds more after his service ended, he shall not maintain an action for that 10 pounds upon the said promise ; for there is not any new cause or consideration preceding the promise." In 1636 Jones and Croke, J.J., in the case of _Townsend v. Hunt_, made a very similar statement.4 Clearly this view of the law facilitated the adaptation of assumpit to the sphere of implied contracts.5 If A does work or performs a service for B at B's request, the work or the service can be regarded as an executed consideration, which will support a promise to pay.

Footnote 1: " By the opinion of the Court it (the action) does not lie in this matter, because there is no consideration wherefore the defendant should be charged for the debt of his servant, unless the master had first promised to discharge the plaintiff before the enlargement and minimize made of his servant, for the master did never make request to the plaintiff for his servant to do so much, but he did it of his own head. But in another like action on the case brought upon a promise of twenty pounds made to the plaintiff by the defendant in consideration that the plaintiff, at the special instance of the said defendant, had taken to wife the cousin of the defendant, that was good cause, although the marriage was executed and past before the undertaking and promise, because the marriage ensued (upon) the request of the defendant," ibid at ff. 272a, 272b.

Footnote 2: " If the defendant is not a legal

## 16 Contract and Quasi-Contract

the basis on which it really rasted, which, as we shall see,1 was not cleared up till the nineteenth century. To explain how this confusion arose, we must glance at the manner in which the form of assumpsit known as indebitatus assumpsit had been allowed to encroach on the sphere of debt. We have seen that \_Slade's Case_2 sanctioned the principle that the existence of a precedent debt raised an implied promise to pay it. The consideration for the promise was the precedent debt. But this was clearly a past consideration. This point was, as we have seen, taken in the case of _Hodge v. Vavisour_ in 1617, but it was overruled.3 The debt it was said "always continues," and "the law will imply a tacit consideration"; and it was compared to a case where the service was executed on the request of the defendant. Clearly these reasons were specious rather than sound. They were verbal quibbles put forward to explain the undoubted fact that indebitatus assumpsit lay upon a precedent debt, and to square this fact with the undoubted rule that a past consideration was no consideration. The result seems to have been that not only the case where a promise was made to pay a precedent debt, but also the case where an act was done on request, were regarded as being in substance exceptions to the rule that a past consideration was invalid. For this reason the latter class of cases were not treated, as the earlier decisions treated them, as cases of executed consideration, but as showing that a past consideration, if given at the request of the plainifi, was valid.4 It was for this reason that it was held, in the case of _Hayes v. Warren_,5 in 1724, that if work was done by the plaintiff he could not suc on a subsequent promise to pay, unless it was alleged that the work was done at the request of the defendant, or unless such request could be implied by proof that the defendant had had the benefit of the work.

Footnote 1: Below 38-39: 2 (1603) 4 Co. Rep. 92b; vol. iii 443-444.

Footnote 2: 3 Bulstr. 222; above g.

Footnote 4: This is illustrated by the case of Townsend v. Hunt (1636) Cro. Car. 408; in that case the defendant's wife was an executrix and as such liable to pay a legacy of PS60 to the plaintiff when he came o' age; the defendant and his wife paid PS53 in April, and the plaintiff gave a geneal release; in September the defendant, in consideration that the plaintiff had at his request given this release, promised to pay the remaining PS7; Jones and Croke, JJ., held that the contract was valid, "for if this promise had been made at the time of the release made, it had been clearly a good promise and a good consideration; then, being made after the release, forasmuch as the release is made at the defendant's request, and the defendant hath the continuance of the benefit thereof, the promise upon this consideration is good enough "; after the verdict the exception that the consideration was past was again moved, "_sed non allocatur_; because it was made at the defendant's request "; note the recurrence of the idea that consideration may consist in a benefit to the promisor-defendant.

Footnote 5: Stra. 933-- it was objected that this was a past consideration; and not being laid to be done at the request of the defendant, it could be no consideration to raise an assumpsit."

It is obvious, therefore, that the course which the decisions had

## 11 In XVITH AND XVITH CENTUREIES 17

taken in the seventeenth century had tended, firstly, to obscure the relations between executed and past consideration ; and, secondly, to indicate that the rule that a past consideration was invalid was a rule which admitted of exceptions -- The rule that a precedent debt would support an action of indebitatus assumpsit was a clear exception ; and, if it is argued that the consideration is sufficient because the man who owed the debt ought to pay it, it is clear that the acceptance of this argument will mean the admission of something very like moral obligation as a valid consideration.1 It is clear, too, that the decisions which made for exceptions to the rule that consideration must move from the promisee, and especially the decisions which allowed a person, not a party to a contract, to sue on a contract made for his benefit,2 tend in the same direction. All this, as we shall see later, tended to obscure the logical development of the doctrine from its procedural basis in assumpsit. But at this point we must consider, in the two following sections, the development of certain other rules which emerged in the seventeenth century. Here again we shall see conflicting tendencies at work which prevented any final settlement of the law during this period.

Footnote 1: Thus in Bosden v. Thinn (1603) Cro. Jac. at p. 19 the court decided in favour of the plaintiff, " because Roberts, upon the plaintiff's undertaking at the defendant's request, had credit given him by Fludd; and that the plaintiff was damified by reason thereof, which in _conscience the defendant ought to satisfy_ ; that the consideration is sufficient and not past " ; cp. the Doctor and Student cited above I4 n. 5.

Footnote 2: Above Iz.

Footnote 3: " The idea," says Sir F. Pollock, " is characteristic not only in English positive law but in the English school of theoretical jurisprudence and politics. Hobbes says : ' the value of all things contracted for is measured by the appetite of the contractors, and therefore the just value is that which they be contented to give,' " Contracts (9th ed.) 185-187.

(4) _Consideration need not be adequate but it must be certain._

The law has never attempted to adjudicate upon the adequacy of a consideration. That is a matter for the parties to the contract. If a person chooses to make an extravagant promise for an inadequate consideration it is his own affair.3 Thus in I587, in the case of _Sburryn v. Albany,4_ it was said that " when a thing is to be done by the plaintiff, be it never so small, this is a sufficient consideration to ground an action" ; and this principle is an accepted doctrine of our modern law. But, though the consideration need not be adequate, it must be sufficiently definite for the court to see that it really exists. Thus it was said in I553 that, "'if I bargain with you that I will give you for your land as much as it is reasonably worth, this is void for cefault of certainty ; but if the judging of this be referred to a third person, and he adjudge it,

## 18 Contract and Quasi-Contrast

then it is good."1 In 1588 2 and 1600 3 it was held that love and natural affection were not considerations upon which an assumpsit could be grounded. In 1636 it was held that a promise to forbear "'aliquo tempore" was void for uncertainty.4

Footnote 1: Mercury v. Lyds, Dyer at f. gira.

Footnote 2: Harford and Gardiner's Case 2 Leo. 30,

Footnote 3: Brett v. J.S. and his Wife, Cro. Eliza. 756-- 4 Natural affection of itself is not a sufficient consideration to ground an assumpsit; for although it be sufficient to raise a use, yet it is not sufficient to ground an occasion without an express quid pro quo."

Footnote 4: Tolson v. Clark, Cro. Car. 438.

It is easy to state this principle, but difficult to apply it to concrete cases which come near the line; and it is clear that this difficulty will be enormously increased, if once the law begins to develop those lines of cases which tended to mix up moral obligation and consideration. No doubt it is easy to say that one test of certainty is to be obtained by asking whether the act or forbearance had a definite value. But this solution merely shifts the difficulty, for, as we shall now see, the law had no very clear ideas as to what acts or things it accounted of sufficiently definite value.

_(5) Consideration must be an act or forbearance of some value in the eye of the law._

The question whether or not an act or forbearance is of sufficient value in the eye of the law, was discussed during this period chiefly in three classes of cases: (i) when the promise was made in consideration of a forbearance to prosecute a groundless claim; (ii) when a promise was made by a creditor to his debtor that, in consideration that the debtor would pay or promise to pay his debt wholly or in part, the creditor would release him; and (iii) when a promise was made by a third person that he would do something for one of the parties to a subsisting valid contract, if that party would perform or promise to perform his duty under the contract.5

Footnote 5: On these topics generally see Ames, Two Theories of Consideration, Lectures 323-353.

(i) Promises made in consideration of a forbearance to prosecute a groundless claim.6

Footnote 6: See Ames, op. cit. 325-327. 7 Cro. Eliza. 126.

It was settled in 1568, in the case of _Stone v. Wythipol_,7 that forbearance to prosecute an invalid claim was no consideration. In that case the executor of an infant testator promised to pay his testator's debt, if the creditor would forbear to sue. It was held that, as he could not have sued for this debt because the testator was an infant, the promise of the executor to pay was based on no consideration. Coke's argument, to which the court asserted, was as follows: " Every consideration that both charge the defendant in an assumpsit must be to the benefit of the defendant or charge

## 13 In Xvith and Xvith Centuries 19

of the plaintiff, and no case can be put out of this rule. And this contract by the infant was void; and staying of suit is no benefit to the defendant, nor any charge to the plaintiff, more than was before." This decision was followed in a long line of cases;1 and substantially the same reasoning as that used by Coke was used by Tindal, C.J., in 1846.2 But, before this date, it had ceased to be possible to state the principle quite so absolutely. It had been decided in 1821 that forbearance to prosecute a suit already instituted, when the law was doubtful, was a valid consideration for a promise.3 This view was approved in 1861, and extended to a forbearance to institute proceedings to establish a claim which there was a bona fide intention to make the subject of litigation.4 Finally, in 1870, in the case of _Callisher v. Biscloffsheim_,5 it was held that forbearance to prosecute a bona fide claim was a good consideration, though the claim was in fact baseless. It would seem, therefore, that the old principle only applies to a forbearance to prosecute a claim which the claimant knows to be baseless.6

Footnote 1: See the list collected by Ames, op, cit. 325 n, 2,

Footnote 2: "In order to constitute a binding promise, the plaintiff must show a good consideration, something beneficial to the defendant, or detrimental to the plaintiff. Detrimental to the plaintiff it cannot be if he has no cause of action; and beneficial to the defendant it cannot be; for, in contemplation of law, the defence upon such an admitted state of facts must be successful, and the defendant will recover costs, which must be assumed to be a full compensation for all the legal damage he may sustain," Wade v. Simeon 2 C.B. at p. 564.

Footnote 3: Longridge v. Dorville 5 B. and Ald. 177.

Footnote 4: Cook v. Wright r B. and S. 559.

Footnote 5: L.R. 4 Q.B. 449.

Footnote 6: "Every day a compromise is affected on the ground that the party making it has a chance of succeeding in it, and if he boaa fide believes he has a fair chance of success, he has a reasonable ground for suing, and his forbearance to sue will constitute a good consideration. . It would be another matter if a person made a claim which he knew to be unfounded, and, by a compromise derived an advantage under it; in that case his conduct would be fraudulent," _fer_ Cockburn, C.J., L.R. 4 Q.B. at p. 452; "It seems to me that if an intending migrant bona fide forbears a right to litigate a question of law or fact, which it is not veracious or frivolous to litigate, he does give up something of value," Miles v. New Zealand Alford Estate Co. (1886) 32 C.D. at p. 291, _fer_ Bowen, L.J.

## 20 Contract and Quasi-Contract

Firstly, after some hesitation in the fifteenth century,1 the opinion of Brian, C.J., to the effect that a smaller sum cannot be a satisfaction for a larger,2 had come to be generally approved in the sixteenth century.3 The rule on this point was stated in its final form in _Pinnel's Case_ in 1602 : 4 " Payment of a lesser sum on the day in satisfaction of a greater cannot be any satisfaction for the whole, because it appears to the judges that by no possibility a lesser sum can be a satisfaction to the plaintiff for a greater sum; but the gift of a horse hawk or robe etc., in satisfaction is good." This really amounts to the arithmetic proposition that a lcsscr sum cannot be satisfaction for a greater,5 It is a rule relating to the discharge of contract, which was evolved in the sphere of the action of debt, and naturally followed from the limitations of that action. It is not, and it could not be, based upon the view that such an agreement was not enforceable by action of assumpsit, because there was no consideration for it, for the simple reason that the action of assumpsit was only just beginning to develop, and the doctrine of consideration was as yet wholly undeveloped.6 In fact, till the expansion of assumpsit to remedy purely executory contracts, it was inevitable that this question should be regarded solely from the point of view of the action of debt. A mere agreement to discharge was not actionable. It only became actionable when the thing for which the discharge was promised was done; for, till then, the promisor had no quid pro quo. But if that thing was less than the party doing it was liable to do, where was the quid pro quo? As Brian, C.J., said, " It is agreed that the agreement merely is nothing to the purpose, but the agreement coupled with the satisfaction; so that the performance of the agreement is the substance of the plea."7

Footnote 1: Y.B. 33 Hy, VI, Mich. pl. 32 (p.48) _fer_ Danvers, J., cited Ames, op. cit. 329; and in Y.B. ro Hy. VI, Mich. pl. 4, Frieux, J., expressed the same opinion--" Semble que il n'y ad diversite perenter le cas de satisfaction de concord in argent ou d'un cheval. Car nien obstant que le sum in concord soit moins que le sum in demande; uncore quand le debtee (i.e. creditor) ce ad receu per son agreement demesne, c'est ausey bon satisfaction a luy en Ley ceme receit d'un chose d'autre nature'; to the same effect Perkins, Profitable Book SS 749 (ed. 1642), who notices the divergence of opinion on the point.

Footnote 2: " "L'accion est port sur xxl., et le concord que il paiera forsque xl., lequel appert estre nul satisfaction de xxl., car paiement de xl., ne poit estre paiement de xxl.,. M es si fut du cheval, quel cheval est paye accordant al concord, c'est bon satisfaction; car non appert le quel le cheval vault plus ou moins que le som en demande,"Y.D. to Hy, VII, Mich. pl. 4.

Footnote 3: (1563) Dalison 49 (1587) 4 Leo, 8r. 4 5 Co. Rep. II7a.

Footnote 5: Ames, op. cit. 330-331.

Footnote 6: Ibid 330.

Footnote 7: Y.B. ro Hy, VII, Mich. pl. 4.

Secondly, we have seen that the Roman rule, that a contractual obligation ought to be discharged by the same formalities as those by which it had been made, had been received by the common law.8 It followed that a contract, which purported to discharge

## 2 In Xvith and Xvith Centuries 21

an existing contractual obligation, must be based on consideration. But if A, being under a contractual obligation to pay $\\not{\\sim}$1o to B, agrees with B that, if B will discharge him, he will pay $\\not{\\sim}$5, what consideration is there for B's promise? Clearly A has incurred no detriment by the making of such a promise. It follows that such a consideration is not valid. This reasoning was followed in _Richard's and Bartel's Case_ in 1584.1 In that case R, the executrix of A, sued B for the price of corn delivered by her testator. B pleaded that, after the contract had been made, R agreed that, because the corn had been lost by a tempest, he would charge only part of the price; and that he had always been ready to pay this part of the price. The whole court decided in favour of the plaintiff, " because there is here not any consideration set forth in the bar, by reason whereof the plaintiff should discharge the defendant of this matter, for no profit but damage comes to the plaintiff by this agreement, and the defendant is not put to any labour or charge by it, therefore here is not any agreement to bind the plaintiff." This decision was followed by cases decided in 1591,2 and 1597.3 In the latter of these cases it was held that the payment of the same sum as that which the plaintiff was liable to pay, was no consideation for a further promise by the defendant.

Footnote 1: I Leo. 19; cp. Street, op, cit. **i** 08-99.

Footnote 2: Greenleaf v. Barker, Cro. Eliza. 193.

Footnote 3: Dixon v. Adams, Cro. Eliza. 538.

Footnote 5: 5 Co. Rep. 117a.

It follows, therefore, that whether we regard the rule as a rule relating to the acts which will operate as a discharge, or whether we regard it as a rule regulating the validity of a contract to discharge the party liable, the same result is produced. The payment of the whole or a part will operate neither as a discharge, nor will it be a consideration for an agreement to discharge.

So far the law is clear. The payment of the whole or part of the sum due cannot be consideration for a further promise, because such payment is no detriment to the promise. But in the sixteenth and seventeenth centuries the law was not finally settled on these lines. There is another line of cases in which the judges, looking rather at the benefit derived by the promisor in getting speedy payment or payment without action, held such payment to be a valid consideration for a promise to release the debt. They held therefore that, though as decided in _Pinnel's Case_,6 payment of a lesser sum was no satisfaction of a greater, yet the payment of such lesser sum might be a valid consideration for a promise to give a release, or to do some other act. Thus in 1595, in the case of _Reynolds v. Pinhove_,7 the defendant had recovered $\\not{\\sim}$5 from the

## 22 Contract and Quasi-Contract

plaintiff. In consideration of $\\pounds 4$ paid to him by the plaintiff, the defendant promised to acknowledge satisfaction of the judgment. The court held the contract valid, " for it is a benefit onto him to have it without suit or charge." The same view was put forward by Coke, C.J., in 1617, in the case of _Bagge v. Slade_.1 " If," he said, "a man be bound to another by a bill in $\\pounds 1,000$ and he pays unto him $\\pounds 500$ in discharge of this bill, the which he accepts of accordingly, and dot upon this assume and promise to deliver up unto him his said bill of $\\pounds 1,000$, this $\\pounds 500$ is no satisfaction of the $\\pounds 1,000$, but yet this is good and sufficient to make a good promise, and upon a good consideration, because he hath paid money--$\\pounds 500$--and he hath no remedy for this again." Possibly Coke may have considered that the payment was a consideration because, if such payment could have been resisted, it was a detriment to the promisee; but I think that his dominant idea was that the payee has got the money, and that this benefit to him should be a consideration--as he said elsewhere in the same case, " I have never seen it otherwise, but when one draws money from another, that this should be good consideration to raise a promise." There are other cases decided in the seventeenth century in which the same reasoning was used;1 and we shall see that it was not till the beginning of the nineteenth century, that it was finally settled that the payment by a debtor to his creditor of a part of a sum due, cannot be a consideration for a promise by the creditor.3

Footnote 1: 3 Bulstr. 162.

(_b_) As soon as it was recognized that a promise given for a promise was a valid consideration,4 it is difficult to resist the conclusion that a promise by a debtor to pay part of a debt to his creditor, ought to be a consideration for a promise by the creditor to release him. This view seems to have been taken in the earlier half of the seventeenth century. In 1602, in the case of _Goring v. Goring_,5 an agreement by an executor to discharge a debtor of his testator who owed $\\pounds 205$, in consideration of a promise by the debtor to pay $\\pounds 150$ in instalments, though admitted to be no valid satisfaction, was held to be a valid agreement, as it was promise against promise.6 Similarly Comyns states that "an accord with mutual promises tc perform is good, though the thing

## 23 In Xvith and Xvith Centuries

be not performed at the time of action ; for the party has a remedy to compel the performance." 1 We shall see that it was not till the following century, that, not without some conflict of opinion, it came to be thought that promises of this kind, though mutual, were inoperative to operate as a satisfaction of the original debt;2 and that the view that in this case the mutual promises are not considerations for each other, derives its strength from cases in which the judges had failed to adapt the old rules as to accord and satisfaction, to the new situation created by the rise of the wholly executory contract.3 But we shall see that there is authority to the contrary, and that the law on this point is not yet wholly settled.4

Footnote 1: Digest _Accord_ B 4-.

Footnote 2: Below 40-47, 83-85.

(iii) A somewhat analogous problem to that last discussed arises, when a promise is made by a third person that he will do something for one of the parties to a subsisting valid contract, if that party will perform or promise to perform his duty under the contract.5 Such contracts are of course of comparatively rare occurrence; but, during this period, at least two cases arose in which the problem was discussed. Both were cases in which the consideration for the promise by the third person was, not the actual performance by the party to the contract of his duty under that contract, but a counter promise by that party to perform his duty.6 In 1600, in the case of _Sherwood v. Woodzwara_,7 the plaintiff sold cheeses to the defendant's son. The defendant, "in consideration the plaintiff would deliver the said cheeses to his said son, assumed, that if the son did not pay for them then he would." The son did not pay, and the plaintiff sued on this promise. In arrest of judgment it was moved " that this was not any consideration; for it is no more than what the law appoints to deliver that which he sold." The court over-ruled this objection and held the consideration valid. In the case of _Bagge v. Slade_,8

Footnote 8: Below 83-85.

Footnote 8: On this topic there has been much discussion; see'Ames, op. cit. 327-329, 340-348; Williston H.L.R. viii 27-38; Langdell, H.L.R.:xiv 496-508; Pollock, Contracts (9th ed.) 197-202, and L.Q.R. xvii 410-422; Street, op. cit.iiii.

## 24 Contract and Quasi-Contract

Now it is reasonably clear that both these cases were cases of promise for promise. It is clear, in the first case, that, when promise was made, the cheese was not yet delivered ; and, in the second case, that, when the promise was made, the money had not yet been paid. For this reason no valid objection can be taken to the actual decisions in these cases. A promise for a promise was clearly a valid consideration--why should not a promise to perform a legally enforceable duty already owed to a third person be a good consideration for a counter promise? We shall see that, unlike the case of a promise by a debtor to pay a sum less than the debt owed, in consideration of a counter promise to give a release, no body of opinion excluding this particular sort of promise has grown up.1

Footnote 1: Below 4$,$I$,$, ${}^{3}$ Above 22,

But in both these cases the court went a good deal further than this. In both they were inclined to take the same view as was taken in that line of cases in which it was held that a payment of part of a debt might be good consideration for a promise to release the whole ;2 for in both they assigned, as the reason for their view that such payment was a valid consideration, the fact that it was a benefit to the creditor to get the money. We have seen that this view is indicated in Coke's remarks in the case of _Bagge v. Slade_ ;3 and it is even more clearly apparent in the remarks of Gawdy and Fenner, JJ., in the case of _Sherwood v. Woodward_ . "It is an ease," they said,4 " to the bargainee to have them without suit, which peradventure otherwise he could not have had. And although the bargainee may take them in this case, the bargainor is not bound to deliver them ; and there is a new act done by him upon this agreement, and it is an ease to the vendee."

Footnote 3: Above 22,

The development of these rules, during the sixteenth and seventeenth centuries, shows that consideration was acquiring a technical meaning in connection with the law of contract, and that a doctrine of consideration was growing up. As assumpsit was fast ousting all other remedies for the enforcement of contracts it was only natural that the contents of that doctrine should be shaped largely, and perhaps principally, by the exigencies of that remedy. It tended to be a reflection of the conditions which a plaintiff must satisfy before he could succeed in this action. But, as the developments just described show, this was not the only influence which has gone to the making of the doctrine. Ideas derived from the quid pro quo, which must be proved in order to succeed in an action of debt ; ideas derived from the very different

## 11 In XVIIIth & Early XIXth CENTS. 25

conception of consideration which was being developed by the court of Chancery; and doubts as to the invalidity of a past consideration, caused largely by the fact that the past consideration of a precedent debt was the foundation of the action in indebitatus_assumpsit,--all tended to import into the doctrine of consideration elements, which led in practice to results very different from those which flowed from the view that it was simply the sum and substance of the conditions which a plaintiff must satisfy, in order to succeed in an action of assumpsit. We must not underrate the importance of these elements. We shall now see that, during the eighteenth and early nineteenth centuries, they came very near to ousting the ideas derived from the conditions under which assumpsit lay; and that it was not till the second half of the nineteenth century that the latter set of ideas prevailed, and that the doctrine was settled on its modern basis.

_Consideration in the Eighteenth and Early Nineteenth Centuries_

During this period the doctrine of consideration was developed mainly on lines which ignored its historical connection with the action of assumpsit. More and more emphasis was laid upon those elements in the doctrine, and those ideas, which were derived from other sources; and thus it became possible for Lord Mansfield and his fellow judges to put forward theories which almost, if not quite, identified consideration with moral obligation. Thus the doctrine of consideration was given a wholly new shape which would, if it had become established as a part of the common law, have fundamentally altered the whole theory of our law of contract. At one time there was some likelihood that consideration would become of merely evidentiary value; and even when this possibility had disappeared, it still remained extremely probable that its identification with moral obligation would leave it as vague and illusory a test of the validity of a contract as the continental "cause."1

Footnote 1: Below 44.

In this section I shall describe the technical lines upon which this development proceeded and indicate its effects upon the doctrine of consideration.

The earliest line of development started from the rule that, if a debt was due, a promise to pay that debt would give rise to an action in indebitatus assumpsit.2 This principle was applied to cases where the debt was really due, but, for one reason or another, it was not enforceable by action. As the debt was due, it was no very violent departure from principle to rule that an express

## 26 Contract and Quasi-Contract

promise by the debtor to pay it would remove the bar to the enforcement of the debt. Thus it was held in 1697 that "when the defendant under age borrowed money of the plaintiff, and afterwards at full age promised to pay it, this is a good consideration for the promise, and the defendant shall be charged."1 On similar principles, it was held in 1699 that a promise to pay a debt barred by the statute of limitation made the debt enforceable by action, and could be set up in answer to a plea of the statute;2 and the former ruling, that an infant could be sued on an express promise made after he had ceme of age to pay a debt contracted during infancy, was affirmed.3 A further development of the same principle was made in 1777, in the case of _Trueman v. Fenton,4_ when it was held that a promise by a bankrupt to pay a creditor, who had accepted no dividend, was enforceable. The transaction was regarded as the revival of the old debt, and, in this as in the other cases, the old debt was considered to be a sufficient consideration for the subsequent promise.5

Footnote 1: Ball v. Hesketh Comb., 38r.

Footnote 3: Ibid.

Footnote 4: 2: Lower 544.

Footnote 5: 4: 5: 6: Then the case of Barnardist v. Coupland. ta C,B, is in point. Loud Chief Justice Willes there says 'that the revival of an old debt is a sufficient consideration.' That determines the whole case," _fkr_ Lord Mansfield, C.J., ibid at p. 549.

So far there is an extension of, but no very violent departure from, the older precedents which allowed that an existing debt was a good consideration for a subsequent promise. But, when _Trueman v. Fenton_ was decided, these cases were being made by Lord Mansfield the foundation of a large generalization, which put their ratio decidendi on the very different ground of moral obligation. At the same-time, influenced by the new principles of mercantile law which he was introducing into the common law, he was prepared to assign to the doctrine of consideration a new and subordinate position in the law of contract. Let us examine these two lines of approach to the establishment of a wholly new theory of consideration in English law.

1. _The idea of moral obligation._ It is clear from the judgment in _Trueman v. Fenton_, that Lord Mansfield relied far more on broad equitable principles, than upon the comparatively narrow common law doctrine that the existence of a precedent debt is a good consideration for a promise to pay. "The debts of a bankrupt," he said, " are due in conscience, notwithstanding he has obtained his certificate ; and there is no honest man who does not discharge them, if he afterwards has it in his power to do so. Though all legal remedy may be gone the debts are clearly not extinguished in conscience."6 He used both the old1 In XVIIIth $&$ Early XIXth Cents. 27 cases, which showed that a debt barred by the statute of limitation and a debt irrecoverable by reason of infancy, were considerations for a promise to pay, and the analogy of equitable doctrines, to show that the courts had recognized such a conscientious obligation.1 And, though he based his judgment to some extent upon the common law decisions, he relied far more on a case decided by lord chancellor Parker,3 in which the right of a creditor to recover on a bond given by a bankrupt had been put wholly on the ground of conscience.3 This reliance on equitable decisions was the more attractive in that equity had, as we have seen, a doctrine of consideration very different from that of the common law.4 But the rules as to what amounted in equity to consideration necessarily shared the vagueness of many of the principles of equity, and, like those principles, still retained many :races of notions derived from abstract morality or natural reason ;5 and thus it happened that Lord Mansfield's bias in favour of introducing equitable principles into the common law was eminently calculated to introduce confusion into the common law doctrine of consideration, and, ultimately, fundamental changes which would have altered the whole of the common law theory of contract.

Footnote 1: "How far have the Counts of Equity gone upon these principles? Where a man devises his estate for payment of his debts, a Court of Equity says (and a Court of Lav in a case properly before them would say the same), all debts barred by the Statute of Limitations shall come in and share the benefit of the devise ; because they are due in conscience : therefore though barred by law, they shall be held to be revived and charged by the bequest. What was said in the argument relative to the reviving a promise at law, so as to take it out of the Statute of Limitations, is very true. The slightest acknowledgment has been held sufficient. . So in the case of the man who after he comes of age promises to pay for goods or other things, which, during his minority, one cannot say he has contracted for, because the 'law disables him from making any such contract ; but which he has been fairly and honestly supplied with," z Cowper at p. 548.

Footnote 2: "Lewis v. Chase (1720) r P. Wms. 620.

Footnote 3: The judgment begins as follows: : "Here is an honest creditor, and the bankrupt it he pay him all, still pays but what in conscience he ought "; the decision in this case was contrary to the spirit of many other cases, r P. Wms. 622 n. r, and it was over-ruled by Sumner v. Brady (1791) r H. Bl. 647.

Footnote 4: "Above 4:5 : I shall deal with the later history of consideration in equity in the following Book of this History; see Roscoe Pound, Consideration in Equity, Wigmore Celebration Essays 435 seqq,

Footnote 5: Roscoe Pound, op. cit. 457-458. 6 (1778) 7 T.R. 350 n. a,

Footnote 6: "Roscoe Pound, op. cit. 457-458. 6 (1778) 7 T.R. 350 n. a,

## 28 Contract and Quasi-Contrast

_Hawkes v. Saunders1_ (1782), on the ground that in the former case the administratrix had no assets.2 In _Hawkes v. Saunders_ he followed his own earlier decision in _Atkins v. Hill3_ (1775), and held that, if an executor had assets and promised to pay a legacy, assumpsit would lie. In so deciding he based his judgment on the broad ground that any moral obligation was a sufficient consideration. "Where a man is uncer a legal or equitable obligation to pay, the law implies a promise, though none was ever actually made. A fortiori a legal or equitable duty is a sufficient consideration for an actual promise. Where a man is under a moral obligation which no court of law or equity can enforce, and promises, the honesty and rectitude of the ting is a consideration."4

Footnote 1: r Cowper 289.

Footnote 2: "It is not like the case of Rann v. Hughes ; for there there were no assets, nor any averment of assets stated in the declaration. But in this case there was a full fund ; and therefore she was bound in law justice and conscience to pay the plaintiff his legacy," ibid at p. 291.

Footnote 3: Ibid 284.

Footnote 4: Ibid at p. 290.

Footnote 5: (I603) 4 Co. Rep. 92a ; vol. iii 445-446.

Footnote 6: Recch v. Kennegal (1748) r Ves. Sen. at p. 126.

Footnote 7: Trewinian v. Howell (1588) Cr. Eliza. gr., cited by Buller, J., r Cowper at p. 293.

It is true that in this judgment, in which the doctrine that moral obligation amounts to consideration attained its most unqualified and complete recognition, we can see an echo of the reasoning by which the decision in \_Slade's Case_5 was justified. The existence of a debt imports a promise, and so assumpsit will lie, even though there has been no express promise to pay. But the reasoning appears here in a very different setting. It is based wholly on equitable considerations ; and the only dictum which really supported the actual decision was a dictum of Lord Hardwicke's, cited by Buller, J.,6 to the effect that the fact that assets had come to an executor's hands was sufficient consideration for a promise by him to pay a legacy. It is true that other cases were cited ; but they bore out neither the broad propositions on which the judgment was based, nor the decision itself. Thus it is clear that a decision that the indebedness of a testator was a consideration for a promise by the executor to pay the creditor,7 is no authority for the proposition that the possession of assets is a consideration for a promise to pay a legacy, for the element of precedent debt is wholly wanting. Nor was it much to the point to cite a case in which it was held that the abandonment of a right, enforceable in equity, was a good consideration.8 The fact that such cases could be cited and such arguments used, taken in connection with the fact that other older cases, which pointed in a very different direction, were not cited,9 show that on the slender basisIn XVIIIth $&$ Early XIXth Cents. 29 of earlier cases which allowed that a precedent debt, though unenforceable, was consideration for a promise, a wholly new theory of consideration was being created. It is not surprising, therefore to find that any past decisions, which could give any sort of support to this new theory, should have gained the approval of Lord Mansfield and his colleagues. Thus in the case of _Martyn v. Hind1_ he expressed surprise that anyone could have doubted the correctness of the decision in _Dutton v. Poole_ ;2 and in another case he was said by Buller, J., to have expressed the opinion that an agreement by a creditor to discharge his debtor, in consideration of receiving a smaller sum, was valid.3 Footnote 1: (1776) 2 Cower at p. 443. 3 For this case see above I2.

Footnote 2: "Whether an agreement by parol to accept a smaller sum in satisfaction of a larger can be pleaded or not, I do not know ; it was formerly considered that it could not, and was so decided in Coke. I think however that there are some late cases to the contrary, and one in particular in Lord Mansfield's time, who said, that if a party chose to take a smaller sum, why should he not do it ?" Stock v. Mawson (1798) I B. and P. at p. 290.

Footnote 19: "Ibid at p.

## 80 Contract and Quasi-Contract

that therefore, if an agreement were in writing, whether under seal or not, consideration was not needed. "I take it that the ancient notion about want of consideration was for the sake of evidence only ; for when it is reduced into writing, as in covenants specialties bonds etc., there was no objection to the want of consideration. And the Statte of Frauds proceeded upon the same principle."1 But as mercantile contracts are almost invariably in writing, it followed that "'in commercial cases amongst merchants the want of consideration is not an objection."2

Footnote 1: 3 Burr. at p. 1669. 2 Ibid.

This heretical doctrine was very shortly afterwards over-ruled in the case of _Rann v. Hughes_ (1778).8 The judges, on being consulted by the House of Lords, laid it down that "'the law of this country supplies no means nor affords any remedy to compel the performance of an agreement made without sufficient consideration ; such agreement is nudun pactum ex quo non oritur actio ; and whatsoever may be the sense of this maxim in the civil law, it is in the last mentioned sense only that it is to be understood in our law." Hence it followed that, "all contracts are, by the laws of England, distinguished into agreements by specialty and agreements by parol; nor is there any such third class ... as contracts in writing."

Footnote 8: It was pointed out that the only precedent for allowing such an action was one in the time of the Commonwealth; and that to allow individual legates to sue would in effect overthrow the equitable rules for the administration of assets, and work grave injustice ; thus, "if an action will lie for a legacy, no terms can be imposed on the party who is entitled to recover, and therefore when the legacy is given to a wife, the husband would recover at law, and no provision could be made for the wife or family : whereas a court of Equity will take care to make some provision for the wife in such a case," ibid at p. 692 _for Lord Kenyon_, C.J.\_.

But, though Lord Mansfield's attempt to make consideration merely one of several kinds of evidence, by which the existence of a contract could be proved, failed, his view that a merely moral obligation was a sufficient consideration grew and flourished. It is true that in 1794, in the case of \_Deeks v. Strutt,\_1 Lord Kenyon, C.J., in effect overruled the actual decisions in _Harokes v. Sunders and Atkins v. Hill_, and held that no action at law could be maintained for a legacy.5 But this decision was treated as proceeding on the ground that the matter was not subject to the cognisance of a common law court, and not as in any way infringing the principles laid down as to the sufficiency of a moral obligation to support a promise.6 We shall now see that, though a reaction against this view had begun to set in in the second quarter of theIn XVIIIth & Early XIXth Cents. 31 nineteenth century, it was, until then, almost an accepted doctrine. In fact, so deeply did it leave its marks on English law, that traces of it can be found even as late as the second half of that century.1

Footnote 1: See Flight v. Reed (1863) I H. and C. 703; below 33.

It is possible to trace two lines of decisions in which this doctrine made its influence felt.

(i) We have seen that it was well established that a precedent debt, though unenforceable by reason of the expiration of the period fixed by the statute of limitation, or infancy, or a discharge in bankruptcy, was a valid consideration for a subsequent promise.2 We have seen, too, that these decisions were no very violent departure from the principle that a precedent debt was a good consideration for a promise to pay, which could be enforced by indebitatus assumpsit; for in all these cases there was a debt existing, though it was not enforceable by action.3 But these decisions were extended to cover the case where, by reason of a statutory enactment or of common law rules, the contract was wholly void, so that there was no debt in existence. Thus in 1809, in the case of _Barnes v. Hedley_,4 it was held that a promise to pay the principal and legal interest could be founded on a precedent loan, which was void by reason of the infringement of the usury laws; and as late as 1863 this decision was followed, in spite of the vigorous dissent of Martin, B., in the case of _Flight v. Reed_.5 So too in 1813, in the case of _Lee v. Muggeridge_,6 a debt created by a bond, which was void because it was given by a married woman, was allowed to be a sufficient consideration for a promise by her to pay the debt after her husband's death. In that case precedents were cited, which proved the somewhat obvious proposition that a void debt could not possibly be a consideration for a promise.7 But they were distinguished on the ground that, in those cases a void consideration had been pleaded, and that they might have been decided differently if the real consideration--the moral obligation--had been stated.8 The court then laid it down that, "it has long been established that where a person is bound morally and conscientiously to pay a debt, though not legally bound, a subsequent promise to pay will

## 82 Contract and Quasi-Contract

give a right of action."1 It is clear that no proposition less wide would have sufficed to decide the case in favour of the plaintiff.

Footnote 1: 5 Taunt, at p. 46 _fer_ Mansfield, C.J.

(ii) We have seen that it was well established that, if an act had been done at the request of the defendant, this act was a valid consideration for a promise by him to pay for it.2 But we have also seen that this rule was coming to be regarded as resting, not on the ground put forward in some of the earlier cases, that the act is in these circumstances an executed consideration for the promise, but on the ground that in such a case the law admitted of an exception to the rule that consideration cannot be past.3 In the case of _Pillars v. Van Mirop_ Wilmot, J., was prepared to give a very wide extension to this exception.4 It is therefore not surprising to find that, during this period, the rule, established in this form, was extended in a manner somewhat analogous to the manner in which the rule that a precedent debt was a valid consideration had been extended. Just as the rule that a precedent debt was a valid consideration for a subsequent promise to pay, was extended to a precedent debt, which for one reason or another was unenforceable by action;5 so the rule that a past act done at the request of the promisor was a valid consideration for a promise to pay, was extended to the case where a person, without a previous request, voluntarily did what another was legally liable to do, and that other in consideration thereof made a promise. No doubt this extension could be justified on the ground that, under these circumstances, the act so done could be taken as executed consideration for the subsequent promise. This was in substance the explanation given by Selwyn;6 and, as thus explained, it is in accord with the principles of the modern law.7 But both the original rule and its extension, if regarded as exceptions to the rule that a past consideration is not valid, can easily be justified by the theory that a moral obligation is a valid consideration; for, if a past act is

**IN XVIIITH $&$ EARLY XIXTH CENTS. 33**

accepted as a valid consideration for a subsequent promise, it is almost tantamount to asserting that a mere motive or feeling of moral obligation is a sufficient consideration. And so we find that, in the cases in which this extension was made, moral obligation occupies a prominent place.

The facts of all these cases were very similar, as they all turned on the liability of a parish, in which a pauper was settled, to maintain him. In the case of _Atkins v. Banzvel1_ the guardians of the parish where a pauper was resident, having expended money on his relief, sued the guardians of the parish where he was settled, to recover the amount so expended. It was held that the action failed, because the defendants had made no express promise to pay. But Lord Ellenborough, C.J., held that, if there had been an express promise, the plaintiffs would have succeeded because "a moral obligation is a good consideration for an express promise";2 and he gave effect to this view in the subsequent case of _Wing v. Mill.3_ In the later case of _Payrter v. Williams4_ the plaintiffs, who had given relief, recovered against the parish where the pauper was settled, but on the ground that the officers of the parish of settlement had requested the relief to be furnished, so that it was a case of an act done at the request of the defendant.5 Necessarily moral obligation played some part in the argument;6 but not much reliance was placed on it by either side; and we shall see that in 1833--the date when that case was decided--the view that moral obligation was always a good consideration was beginning to decline.7 But, even after the theory had ceased to be held in the large sense given to it by Lord Mansfield and by Mansfield, C.J., traces of it lingered on in the language used by distinguished judges. We have seen that as late as 1863 it inspired the decision of the court in _Fight v. Reed;8_ and traces of its influence can be seen in the language of judgments delivered by Parke, B., in 18439 and 1848.8_Contract and Quasi-Contract

It is quite clear that if these eighteenth-century developments of legal doctrine had been received into the common law, the doctrine of consideration woud not hold the place which it holds to-day in the English law of contract. If Lord Mansfield's view that consideration had a merely evidentiary value had prevailed, it would have become simply one of several ways of proving the existence of a contract, it would have lost all connection with its historical origin in the procedural necessities of assumpist, and it would probably have disappeared before now as a substantive body of doctrine. The acceptance of this view would, as Sir F. Pollock has said, have changed the whole modern development of the English law of contract. " and its principles might have been (with only minute theoretica differences) assimilated to those of the law of Scotland."1 No: would the result have been very different if the theory of the identification of moral obligation and consideration in its extreme form had been accepted. In that case the English theory would have become something very similar to the continental theory, which regards mere moral obligation, or the intention to confer a benefit, as a sufficient "_cause._" We shall see that this "_cause_" has consequently become so uncertain a test for distinguishing between a pact and a contract, that in the opinion of many it is wholly useless.2 And this is only natural ; for, as Lord Denman, C.J., pointed cut in the case of _Eastwood v. Kenyon_, the doctrine that moral obligation was a sufficient consideration, " would annihilate the necessity for any consideration at all, inasmuch as the mere fact of giving a promise creates a moral obligation to perform it."3

Footnote 1: "If it had occurred a century or two earlier to a judge of anything like Lord Mansfield's authority, the whole modern development of the English law of contract might have been changed, and its principles might have been (with only minute theoretical differences) assimilated to those of the law of Scotland," Contracts (gth ed.) rgi ; the only criticism that can be made of this dictum is that it probably could not have occurred to any judge " a century or two earlier," as the procedural origin of consideration was then too well recognized.

Footnote 2: Below 44- ${}^{3}$(1540) $\\tt II$ Ad, and, E. at p. 450.

But, as we shall now see these ideas were decisively rejected in the nineteenth century, the procedural origin of the doctrine of consideration was recalled, and the modern law was settled on this basis.

_The Settlement of the Modern Doctrine_

The causes which brought about the rejection of theories, which seemed to have acquired so much authority in the eighteenth century, must be sought ultimately in weight of

## Settlement of Modern Doctrine 35

earlier precedents, which came from a period when the origin of consideration, in the procedural necessities of assumpsit and to some extent of debt, was almost too obvious to require statement. We must therefore examine the manner in which these precedents were used to prove that consideration was something very much more than mere evidence, and more than motive or moral obligation.

It was the view expressed by Lord Mansfield in _Pillans v. Van Mierop_,1 that consideration was merely evidence of the existence of the contract, that was the first to be rejected. It was, as we have seen, rejected in the case of _Rann v. Hughes2_ only thirteen years later, so that it had no time to gather weight by the approval express or tacit of _later_ judges. That it was so speedily rejected is, in my opinion, an indirect and undesigned consequence of SS 4 of the statute of Frauds. The case of _Rann v. Hughes_ was an action on a promise by an administrtrix to pay out of her own estate.3 It was urged that, as the statute had required such promises to be in writing, they did not require consideration to support them. But it was clear enough, both from the words of the statute and from the manner in which it had been interpreted, that non-observance of the provisions of the statute rendered the contract, not void, but unenforceable by action.4 If this had not been so, it would have been impossible for equity to have originated the equitable doctrine of part performance, the beginnings of which we can see in the time of Lord North,5 who had helped to draft the statute;6 nor would it have been possible for a contract :0 be proved by means of a written memorandum drawn up af:er the agreement had been made.7 It was the better opinion, therefore, that writing affected, not the validity, but the enforceability of the contract.8 It followed

Footnote 1: (1765) 3 Burr, at p. f669; above 29-30. 2(1778) 7 T.R. 350 n. $a$.

Footnote 3: It is not even certain that the promise was in that case in writing--\* It is said that if this promise is in writing that takes away the necessity of a consideration, and obviates the objection of nudum patum, for that cannot be where the promise is put in writing; and that after verdict, if it were necessary to support the promise that it should be in writing, it will after verdict be presumed that it was in writing; and this last is certainly true," 7 T,R. 350 n. $a$.

Footnote 4: It was said by the Attorney-General, that since the statute of Frauds, if an agreement be made and reduced into writing, and signed but not sealed, that this is still but a parol agreement, and the writing is only evidence of it," Marquis of Normanby v. Duke of Devonshire (1697) Free. Ch. at p. 217,

Footnote 5: Hollis v. Edwards (1683) r Vern. 159; Butcher v. Stapely (f685) r Vern. 363; vol. vi 658-659.

Footnote 6: Vol. vi 380-384.

Footnote 7: Smith v. Watson (1779) Bunbury 55; cp. Weiford v. Bearely (1747) 3 Atk. 504.

Footnote 8: Pollock, Contracts (9th ed.) 690-70r; the discussion in Leroux v. Brown (185a) r2 C.B. So1, in which the rule was finally decided, was confused by references to the question cf the effect of SS 17 of the statute; that section was differently word, and no final decision was reached as to its effect, vol. vi 386 n. 4.

## 86 Contract and Quasi-Contract

that, if consideration was neeced for the validity of all contracts not under seal, it must be necessary for contracts required to be in writing by the statute of Frauds. But for the fact that the contract then before the court was one which fell within the fourth section of the statute, and but for the fact that the statute affected only the enforceability of such contracts, it may well be doubted whether Lord Mansfield's opinion, which is not in itself unreasonable, would have been so speedily and decisively overruled. If it had not been speedily overruled, and if it had been combined with the doctrine that moral obligation was equivalent to consideration, very little would, as we have seen, have been left of the doctrine of consideration.

Though the case of _Rann v. Hughes_ did not allude to the doctrine of moral obligation, though, as we have seen, that doctrine continued to flourish for many years after that decision,1 the opening words of the judgment impliedly condem the wide meaning afterwards given to it by Mansfield, C.J. "It is undoubtedly true," said Skynne, C.B., in the name of the judges,2 " that every man is by the law of nature bound to fulfil his engagements. It is equally true that the law of this country supplies no means, nor affords any remedy, to compel the performance of an agreement made without sufficient consideration." There were many lawyers who saw clearly enough that the large efficacy attributed to moral obligation could not be supported. Coke's doctrine that consideration " must be either an immediate benefit to the party promising or a loss to the person to whom the promise was made,"3 was still put forward in argument. And, though this doctrine was then denounced as too narrow,4 it still had life in it. In 1802 the reporters Bosanquet and Puller appended to their report of the case of _Wennall v. Adney_ a learned note, which showed that the doctrine that moral obligation was a sufficient consideration to support a promise, was inconsistent with the earlier authorities, and was unnecessary for the decision of most of the cases usually cited for it.5 They maintained that "if a contract between two persons be void, and not merely voidable, no subsequent express promise will operate to charge the party promising, even though he has derived the benefit of the contract "; though they admitted that, "according to the com

## Settlement of Modern Doctrine 37

monly received notion respecting moral obligations, and the force attributed to a subsequent express promise, such a person ought to pay." They maintained that " an express promise can only revive a precedent good consideration, which might have been enforced at law through the medium of an implied promise, had it not been suspended by a positive rule of law, but can give no original right of action, if the obligation on which it is founded never could have been enforced at law." In other words, a precedent debt, as decided in _Slade's Case_,1 is a valid consideration on which indebitatus assumpsit will lie, either by reason of a subsequent express promise, or, if no subsequent promise has been made, by reason of the promise implied from the debt; and a precedent debt, though voidable or unenforceable by action, is a good consideration for a subsequent express promise to pay. But a precedent void obligation, because it is void, cannot be a consideration, whatever be the moral obligation which arises from its creation.

Footnote 1: (r603) 4 Co. Rep. 92a. (r833) r C. and M. at p. 816. (r845) 2 Ex. at p. 90. (r863) 1 H. and C. at p. 716. (r840) 1 Af. and E. at p. 447. (r845) 3 Meyer v. Haworth 8 Ad. and E. 467; at p. 469 Lord Denman, C.J., said, "the record states that the goods were supplied to a married woman, who, after her husband's death, promised to pay. That is not sufficient. The debt was never owing from her. If there was a moral obligation that should have been shown."

That this note had much to do with the change of opinion on this subject, which took place in the latter part of the nineteenth century, is clear from the use made of it in later cases. It was used in argument in the case of _Payner v. Williams_,2 it was approved by Parke, B., in _Earle v. Oliver_,3 and it was cited, though it was misapplied by Pollock, C.B., and Wilde, B., in _Flight v. Reed_.4 More important than all, it was approved by Denman, C.J., in the case of _Eastwood v. Kenyon_.5--the case which gave the death blow to the theory that moral obligation could be regarded as a valid consideration. Lord Denman's opinions upon this question had progressed. In r8386 he had contented himself with following in substance a decision of Lord Tenterden's in 1831,7 and holding that the plaintiff failed, because, if there was a moral obligation, it had not been sufficiently set forth in the declaration. But in _Eastwood v. Kenyon_ he stated clearly that moral obligation could never be a consideration; and it is clear that the decision was mainly grounded, as the note to _Wennall v. Adney_ was grounded, upon the "old common law of England," contained in such cases as _Hunt v. Bate_, _Townsend v. Hunt_, " and indeed in

## 80 Contract and Quasi-Contract

numerous old books."1 "The principle," he said, "of moral obligation does not make its appearance till the days of Lord Mansfield, and then under circumstances not inconsistent with this ancient doctrine when properly explained." From that time onwards the doctrine of consideration has been developed for the most part on strictly historical lines, and entirely in accordance with those older sixteenth and seventeenth century precedents, which regarded the term consideration as the compendious word which summed up the conditions which a plaintiff must satisfy before he could succeed in indabitatus or in special assumpsit.

Though this note to _Wennall v. Adney_ had much to do with producing this change of opinion, it is possible that it was partly due to the new rules of pleading which were made in 1834. We shall see that those rules prevented defendants from pleading the general issue in assumpsit, and required them to plead specially.2 This change obviously tended to concentrate attention upon the kind of pleas appropriate to the action, and to call increased attention to the procedural basis of the doctrine of consideration. However that may be, the fact of this change in the attitude of the courts is undoubted. It is a change in attitude which is analogous to that already noted in the view taken by them as to the extent of the modification of the maxim _action personalis moritur cum persona_ recognized in the case of _Philitps v. Homfray_;3 and as to the relations of the actions of trover and trespass de bonis asportatis.4 As we shall now see, it has made our modern law.

Footnote 1: II Ad. and E. at p. 452; for the cases cited see above 14-15.

Footnote 2: Vol. ix c. 7 SS 2; Common Law Procedure Commission, First Report, Parlt Papers (1831) xxii at pp. 590, 599; Cambridge Law Journal i 273-275.

Footnote 3: Vol. iii SS82.

Footnote 4: Vol. vii 420-421.

Footnote 5: (18 ${\\pm 2}$ ) $\\geq$ Q.B. 85; "motive is not the same thing with consideration, Consideration means something which is of some value in the eye of the law moving from the plaintiff," ibid at p. 859 _for_ Patteson, J.

Three consequences followed from the decision in _Eastwood v. Kenyon_ that a past consideration was no valid consideration, and that moral obligation was not the same thing as consideration. In the first place, it became possible to distinguish clearly between motive and consideration. This distinction was stated in its final form two years later in the case of _Thomas v. Thomas.6_ In the second place, it became possible to get rid of the confusion caused by the habit of regarding a cnsideration executed on request, as an exception to the rule that a past consideration is invalid. In truth, as had long ago been printed out by Selwyn, in connection with the cases turning on the liability of the poor law authorities,6 those cases could be treated more properly as cases of executed consideration. It is clear, as we have seen from \_Launpleigh v.

## 35 Settlement of Modern Doctrine 39

\_Brahawaiit_1 and numerous other cases before and after that decision,2 that the validity of a consideration executed on request is not an exception to the rule that a past consideration is invalid, but simply a case of an executed consideration. This new point of view can be seen gradually emerging in the decisions of the latter half of the nineteenth century; 3 and it received its clearest statement from Bowen, L.J., in \_Stewart v. Casey_4--"The fact of a past service raises an implication that at the time it was rendered it was to be paid for; and, if it was a service which was to be paid for, when you get in the subsequent documenta promise to pay, that promise may be treated either as an admission which evidences, or as a positive bargain which fixes, the amount of that reasonable re-muneration on the faith of which the service was originally rendered." Thus most of the so-called exceptions to the rule that consideration cannot be past disappear.5 It is true that the rule is still recognized that a precedent debt, though barred by the statute of limitation, is consideration for a promise to pay, or for an acknowledgment from which a promise to pay can be inferred. But it is not a consideration for a promise to do any other collateral thing; 6 for, as Lord Sumner has pointed out in his learned judgment in the case of _Spencer v, Hemwerde_, the rule only applied to actions of assumpsit for debts, and not to actions for other kinds of damage.8 Thus, though the consideration is in this case past, it is a legitimate extension of the rule that a precedent debt would support an action of indebitatus assumpist.7 And this is the true historical ground. But at the present day, when the procedural origin of this anomalous rule has been forgotten, it is perhaps better to base it, as Holt, C.J.,9 and Sir F. Pollock have based it,10

## 40 Contract and Quasi-Contract

on the ground that the defendant has waived the benefit of the statute.1 In the third place, this decision emphasized the rule that consideration must move from the promise, and so got rid of cases like _Dutton v. Poole_,2 where the judges had evidently been influenced by the equitable doctrine of consideration.3 That rule had been strongly asserted in 1833, in the case of \_Price v. Easton ;\_4 and in 1861, in the case of _?veddle v. Atkinson_, it was finally held that " the modern cases had in effect overruled the old decisions"; and that they " shewed that the consideration must move from the party entitled to sue upon the contract."5

Footnote 1: The rationale of the analogous case of a promise given by an infant, after attaining his majority, was never clearly settled; in Williams v. Moor (1843) ii M. and W. at p. 263, Parke, B., said that it might be treated, either " as an act giving validity to an otherwise invalid contract, or as a new contract, voluntarily entered into after the party has obtained the capacity of contracting, the consideration being the moral duty arising from the previous transactions."

Footnote 2: (1677) 2 Lev. 211. 3 Above 12. 4 B, and Ad. 433.

Footnote 4: (1884) 9 A.C. 605, 7 At p. 613.

It is by the application of the same principles that other doubtful points in the law of consideration have been practically settled. Thus the case of \_Foakes v. Beer_6 settled that the payment of a smaller sum by a debtor to a creditor, to whom a larger sum is due, is not a valid consideration for a promise by the creditor to release his debtor. In such a case, said Lord Selborne,7 " I cannot say that I think that consideration is given in the sense in which I have always understood that word as used in our law." On somewhat similar grounds it may be doubted whether A's performance of his contractual duty to B can be consideration for a promise by C to A. Here A has only done what he was legally bound to do, just as when he pays part of his debt to B. In neither case is there any detriment to A, the promise, which can afford a consideration for a further promise.8

Footnote 8: (1677) 2 Lev. 211. 3 Above 12. 4 B, and Ad. 433.

Footnote 8: (1884) 9 A.C. 605, 7 At p. 613.

Whether or not a promise by a debtor A to pay less than his debt to his creditor B, can be a consideration for a promise by B to release him is more doubtful. There is much authority to show that an accord to be operative must always be executed; and, as we have seen, actual performance of less than is due is not a con

## 4 Settlement of Modern Doctrine 41

sideration. On the other hand, the better opinion would seem to be that a promise by A to C to perform his contractual duty to B may be consideration for a promise by C to A. It is a case of promise for promise; and ro exceptional rule, excluding this particular kind of promise from the general rule that mutual promises are a valid consideration for each other, can, as Sir F. Pollock has pointed out, be produced.1 In this respect it differs from a promise by a debtor to his creditor to pay a less sum than his debt in consideration for a promise of discharge; for there is, as we shall see,2 some authority for saying that an exceptional rule exists which prevents these promises from being consideration for one another. In fact two cases--\_Shazweit v. Shazweit_1 and \_Sotson v. Pegg4--\_are in favour of the validity of the former class of contracts. But both of these cases call for some comment.

Footnote 1: Contracts (qth ed.) 200-201, 2 Below 83-85.

Footnote 2: (r360) 9 C.B.N.S. 159. 4 (r860) 6 H. and N. 295.

Footnote 3: \*\*The plaintiff may have made a most material change in his position, and induced the object of his infection to do the same, and may have incurred pecuniary liabilities resulting in embarrassments, which would be in every sense a lo:s, if the income which had been promised should be whhled ; and, if the promise was made in order to induce the parties to marry, the promise so made would be in legal effect a request to marry," 9 C.B.N.S. at p. 174. 6 H. and N. at p. 299 : Wilde, B., said at p. 300, " but why is there no consideration? It is said because the plaintiffs in delivering the coals, are only performing that which they were already bound to do. But to say that there is no consideration is to say that it is not possible for one man to have an interest in the performance of a contract made by another." 7 Ibid at pp. 300-301.\*\*Contract and Quasi-Contract

Thus the modern doctrine of consideration was settled on lines, which are remarkable for the historical and logical correctness with which they have been deduced from that procedural basis in the action of assumpsit, from which the conception of consideration originated. Whether the resulting law is wholly fit for the needs of this twentieth century is another question, which I shall discuss in the following section.

### "Cause" and Consideration1

Footnote 1: On this subject see E. G. Lorenzen, Causa and Consideration in the Law of Contracts, Yale Law Journal xxviii 624 ; and a paper by F. P. Walton, L.Q.R. xli 306.

We have seen that the canon law, starting from the basis that faith should be kept, had evolved a theory of contract based upon a generalized conception of the Roman causa ; and that this canonist conception of causa has been accepted and applied by the chancellors in the exercise of the jurisdiction which, during the Middle Ages, they were assuming over contract.2 This fact comes out clearly enough in the Latin version of the Doctor and Student ;3 and that the Doctor and Student correctly represented the facts may be said to have been proved by Barbour's essay on the history of contract in ear.y English equity.4 I have already described the main characteristics of this conception of causa ; and at this point it is only necessary to recall briefly its main characteristics. They may be summed up, says Sir Paul Vinogradoff, under the following heads :6 "(1) The promise must be intentional ; (2) it is subject to be taken back in consequence of a material change of circumstances ; (3) it must have a reasonable cause, which may consist eithe: in a material equivalent or in moral considerations ; (4) a liberal disposition is to be deemed a sufficient cause in the case of gifts ; (5) promises to moral persons, to political learned or religious bodies, are legally valid if they are made for the sake of their moral aims, e.g. for the honour of God, the advancement of learning, assistance of the poor, and the like."

Footnote 4: Ibid 263, 294.

Footnote 5: "With the Romans an agreement was not actionable unless there was some reason why it should be so. The result is that, in these texts, _causa_ means actionability, and does not denote anything else, independent of actionability, which creates that important characteristic," Buckland, Roman Private Law 232.

It is obvious that this canonist theory of causa made for an extension of the sphere of the enforceable agreement, and a corresponding restriction of the sphere of the nude pact ; for if, as seems probable, causa in the civil law means actionability,6 the extended meaning given to the term by the canonists necessarily had this effect. In the sixteenth and seventeenth centuries the tendency towards this extension was assisted by two other causes.

## "Cause" and Consideration

It was assisted, firstly, by the notion that "'the enforceable quality of all agreements was demanded by natural law, and that the non-enforceability of pacts was a specific Roman doctrine which was opposed to natural law"'; \[1\] and, secondly, by the mistaken idea that the old Germanic law specially emphasized the duty of keeping faith.\[2\] These two causes, and especially the second, led in Germany to the total elimination of causa as a necessary condition precedent for the enforceability of contracts.\[3\] In other countries, however, a causa still continued to be necessary ; but it was a causa of the canonist type. It would seem, in fact, that this canonist theory of causa inspired the theory of contract accepted in many continental states in the seventeenth and eighteenth centuries.\[4\] Thus the necessity for a causa is stated to be necessary by many writers on Roman-Dutch law.\[5\] It was introduced into the French law by Domat, accepted by Pothier, and, through Pothier, found a place in the code Napoleon.\[6\] Brissaud points out that the theory was accepted the more easily, because it could be regarded as a development of the older ideas which required something which corresponded to the English quid pro quo.\[7\]

But the "cause," which was thus adopted into French law and Roman-Dutch law, was, as might be expected from the conditions under which it originated, both elastic and vague. Thus, "the existence of a natural, i.e. moral obligation, or even of a real or supposed duty in point of honour: only, may be quite enough. Nay, the deliberate intention of conferring a gratuitous benefit, where such intention exists, is a sufficient foundation for a binding unilateral promise."\[8\] It is not surprising, therefore, that consider-

\[1\] Yale Law Journal xxviii 63r. \[2\] Ibid.

\[3\] In Germany the notion erroneously attributed to the older Germanic law that 'every lawful agreement entered into with the serious intention of being legally binding would directly produce of its own force obligatory effect, without regard to the form in which it was expressed,' ultimately prevailed ; which left no room for the requirement of a _causa_ as a necessary element for the enforceability of contracts," ibid 63z.

\[4\] Ibid 63p-63r. \[5\] Ibid 63z. \[6\] Ibid 63z. \[7\] La _cause_ pour les anciens jurisconsultes correspond au _quid gro quo_ ou a la consideration du droit anglais; ils ont pris pour point de depart les des formines sur la _condiditio sine causa_, sur les contrats innomes, sur les nullites des stipulations, et de la ont tire la regle; pas d'obligation sans cause. _Cil n'a mie bele reson de demander_, dit P. de Fontaines, _qui demande de ce que un ils connexana_, _sans autre reson metire aarant_. On accepta plus facilemente ce principe qui l' candidui dans beaucoup de cas avec la theorie plus ancienne de la necessite de l'execution au moins partielle du contract pour quil en resultat une obligation," Brissaud, Droit Francais ii Arq-Iq20.

\[8\] Pollock, Contracts (5th ed.) App. 69z ; p. Jazavikerem v. Amarasivia \[ICR\] A.C. at p. 875, where the \[ Judicial Committee say, "It may well be that according to English law, as a general rule, an existing moral obligation not enforceable at law does not furnish good consideration for a subsequent express promise: but the Roman Dutch law, by which, in their Lordships view, this case must be governed, is wholly different. According to the latter law it would appear that a promise deliberately made to discharge a moral duty, or to do an act of generosity or benevolence, can be enforced at law, the justa causa debendi, sufficient according to the latter system of law, to sustain a promise, being something far wider than that which the English law treats as good consideration for a promise."

## 4 Contract and Quasi-Contract

able difficulty should have been experienced in making a satisfactory definition of the term.1 Nor is much light got from the interpretation placed upon the clause of the Code Civil which enacts that, " L'obligation sans cause, ou sur un fausse cause, ou sur une cause illicite, ne peut avoir aucun effet."2 A contract is said to be without a "cause " if the paties did not intend by their agreement to affect their legal relations, or if the subject matter of the contract had perished before the contract was made. It is said to have a false "cause " if the parties contracted under a mistake as to the existence of certain facts, belief in which induced the making of the contract--e.g. a promise by A to B to pay B a sum of money under the false belief that he owed him the money. It is said to have an illegal cause if the object of the contract is illegal.3 All this really amounts to is that the parties must have intended by their contract to affect their legal relations, that they must have really consented, and that the object of their contract must be legal.4 Hence it is not surprising to find that many French writers reject the idea that causa is needed for the validity of a contract. "They regard the requirement of causa. . . as an abstract and metaphysical notion calling for subtle distinctions, and creating confusion instead of serving a useful purpose."5 The same view seems to be taken by distinguished Roman-Dutch lawyers. Thus Professor Lee calls the requirement of causa "a juristic figment,"6 and says that it means little more than that "an agreement to be legally enforceable must be entered upon with a serious and deliberate mind." Exactly the same reasoning applies to causa as defined by the Spanish civil code, the Chilean code, and the countries in America which have adopted the provisions of those codes.7

Footnote 1: "Many attempts have been made to find a general definition of _causa_, but none of them has met with approval. . . Great difficulty seems to be experienced by the French writers in distinguishing the _causa_ of a contract, on the one hand from its object, and on the other hand from motive in general," Yale Law Journal xxviii 632. . . Art. 1733. . . Yale Law Journal xxviii 633. .

## 45 "Cause" and Consideration

of Roman-Dutch law, "' is enforceable, provided only that it is freely entered upon by competent persons for an object which is physically possible and legally permissible" ;1 and the same description, it would seem, might be given of either the actual state of the law, or the state to which it is approximating, in all civilized countries which are not governed by the common law. The result is a striking illustration of the truth of Lord Denman's dictum that, the doctrine that moral obligation is a sufficient consideration " would annihilate the necessity for any consideration at all, inasmuch as the mere fact of giving a promise creates a moral obligation to perform it." 2

Footnote 1: Op. cit. 107.

The adoption by the law of this liberal attitude ensures the carrying out of the lawful intentions of contracting parties ; and, if it is right that the law should enforce contracts, there seems no good reason why it should not at the present day adopt this attitude. There seems to be no reason why it should allow itself to be fettered, either by obsolete procedural difficulties, or by obsolete technicalities which have been inherited from other legal systems. But undoubtedly such a system of contract law has its weak points. In the first place, there is the difficulty of proving the contract ; and, in the second place, there is the difficulty of proving whether or not the parties really intended by their agreement to affect their legal relations. Both these questions may raise very difficult questions of fact. But these difficulties may be obviated by requiring, as French law requires, all contracts which involve more than a certain sum of money to be in writing ;3 and by requiring, as is done in many countries, that promises to give shall be authenticated by a judge or notary.4

Footnote 1: Yale Law Journal xviii 643, citing Art. v34 of the Civil Code; for a similar rule in Scotland see Bell, Principles SS83, SS67, cited \[1988\] A.C. at p. 875 n. 2.

Footnote 4: Yale Law Journal xviii 643, citing the codes of France, Germany, and Italy.

Continental systems of law, therefore, by gradually altering, and then in effect dropping, the doctrine of causa, have worked out a theory of contract very different from the English system based on the doctrine of consideration. But it will be clear that, if the eighteenth-century theories of moral obligation, and still more if the theory put forward by Lord Mansfield in _Pillans v. Van Miero_, had prevailed, the English theory of contract would now be approaching very closely to the continental system. It is worthy of note that, in the case of _Pillans v. Van Miero_, Wilmot, J., to a large extent, based his judgment on an identification of the civilian causa with the English consideration.5 As the civilians held that there could be no

## 46 Contract and Quasi-Contract

was put into writing, because the writing made a causa, so in "England writing should supply the place of consideration. But we have seen that this theory was never accepted ; and that, in the second quarter of the nineteenth century, the theory that moral obligation was a valid consideration was rejected. Both these lines of development, therefore, were closed.

Instead, a return was made to those sixteenth and seventeenth century cases, in which the doctrine of consideration was being developed from the procedural necessities of the action of assumpsit. Thus the English theory of contract is still bound up with the conditions imposed upon it by the form of action through which contracts, other than specialty contracts, became enforceable.

No doubt the resulting theory of contract has its strong points. "Roughly stated it seems plain and sensible, the court will hold people to their bargains, but will not enforce gratuitous promises unless they are made in solemn form."1 It is in fact strong where the rival theory is weak. But it may be questioned whether, in its present form, its weaknesses do not outweigh its advantages. Some of its weaknesses have been very clearly pointed out by Markby.2 A gratuitous promise is not actionable unless it is made in writing under seal ; but the court will not enquire into the adequacy of the consideration, and a mere nominal consideration will suffice. Why should not the performance by A of his duty under his contract with B, be a consideration for a promise by C to A? Why should not a promise to keep an offer open for a week, or a promise to release a debt in consideration of part payment, be valid? Why, in fact, should not any promise be binding if the party promising intended to put himself under a legal liability? The requirement of consideration in its present shape prevents the enforcement of many contracts, which ought to be enforced, if the law really wishes to give effect to the lawful intentions of the parties to them ; and it would prevent the enforcement of many others, if the judges had not used their ingenuity to invent considerations. But the invertion of considerations, by reasoning which is both devious and technical, adds to the difficulties of the doctrine.3 Markby's strictures have recently gained an increasing measure of support. Sir F. Pollock has said that the application of the doctrine " to various unusual but not unknown cases has been made subtle and obscure by excessive dialectic refinement,"4

## "Cause " and Consideration

In a recent case Lord Dunedin said,1 " I confess that this case is to my mind apt to nip any budding affection which one might have had for the doctrine of consideration. For the effect of that doctrine in the present case is to make it possible for a person to snap his fingers at a bargain deliberately made, a bargain not in itself unfair, and which the person seeking to enforce it has a legitimate interest to enforce." Professor Lorenzen, in an able article in the Yale Law Journal, to which I am much indebted, takes substantially the same view.2

Footnote 1: Dunlop Pneumatic Tyre Co. v. Selfridgeand Co. \[1915\] A.C. at p. S55; it might however be contended that the refusal to uphold the validity of the contract in this case was on the whole in accordance with public pclicy, as a contrary decision would have facilitated the operations of a design to keep up prices as against the public; but this does not affect the main argument.

Footnote 2: " Subject to certain qualifications relating to form, it should suffice for the formation of contracts that there exist (1) capacity ; (2) an intention to contract; and (3) a possible and lawful object," Yale Law Journa xxviii 646.

In fact, the doctrine of consideration in its present form is something of an anachronism. The substantive law has long ago broken away from the leading stringo of the form of action, and the law of actions has become merely adjective law. But our theory of contract is still governed by a doctrine which is historically developed, with great logical precision, from the procedural requirements of the form of action by which simple contracts were enforced. These procedural requirements were not mere matters of form. They were the conditions precedent for applying the remedy which was the best, and in many cases the only remedy, which the common law possessed for the enforcement of contracts. Thus it happens that it has not been possible to treat the doctrine of consideration as mere form. It has been necessary to treat it as the essential condition for the validity of all simple contracts.

There is, it seems to me, good sense in Lord Mansfield's view that consideration should be treated, not as the sole test of the validity of a simple contract, but simply as a piece of evidence which proves its conclusion. This is in effect the view which he tried to enforce in _Pillars v. Yan Mierop;_" and though, like some of his other rulings,4 it was demonstrably not English law, it embodied a true idea of the tendency of legal development. The consequence of adopting this view would be that any lawful agreement into which the parties to it entered with the intention of affecting their legal relations,5 would, if it could be proved byContract and Quasi-Contract

adequate evidence, be enforceable. The intention of the parties to enter into a lawful agreement affecting their legal relations would be the main thing. If that was proved the agreement would be enforceable.

We have seen that in Continental states difficulties of proof have made it impossible to adopt an attitude quite so liberal as this ;1 and to introduce any such rule into the law of this country would make a total break wih all existing rules of English law. But it is at least arguable that the time has come to make some sort of a change. A legal history is not perhaps the place to make suggestions as to the law of the future. It is concerned with the past. But, if history is to be something more than mere antiquarianism, it should be able to originate suggestions as to the best way in which reforms in the law might be carried out, so as to make it conform with present needs. The doctrine of consideration has, as we have seen, its strong points. Its weakness is that it is inadequate as the sole test of the validity of simple contracts. The true remedy, therefore, is not to scrap it, but to reduce it to a subordinate place in the English theory of contract. This, it seems to me, could be done, and at the same time a great simplification could be made in the English law of contract, if a short Act were passed which, (1) abolished the differences between simple and specialty contracts ;2 (2) repealed SS 4 of the statute of Frauds and SS 4 of the Sale of Goods Act ;3 and (3) provided that all lawful agreements should be valid contracts, if the parties intended by their agreement to affect their legal relations, and _either_ consideration was present, _or_ the agreement was put into writing and signed by all the parties thereto. By making these changes we should get a body of law which would be easy to apply, and would allow a greatly increased freedom of contract. The need for proof that the parties to the contract intended to affect their legal relations would be satisfied ; proof of the existence of the contract would be facilitated ; and, at the same time, full effect could be given to the intention of persons who wish to enter into contractual relations.

Footnote 1: Above 45.

Footnote 2: Something like this has already been affected in the law as to the administration of assets by 32, 33 Victoria c 46; Re Samson \[1906\] 2 Ch. SS84.

Footnote 3: It might be necessary to reconsider

## 2 The invalidity, enforcement, and discharge of contracts

The growth of rules upon the first of these topics was due, partly to the working out of the consequences of the fact that the essence of contract is agreement, and partly to the necessity of bringing the rules of contract law into line with the law of status and the law of crime and tort. Thus we get the growth of rules as to the effect of mistake, as to the contractual capacity of married women and infants, and as to the effect of illegality of object ; and the growth of these and other rules gradually enables the law to draw distinctions between different grades of invalidity--between contracts which are void, contracts which are voidable, and contracts which are unenforceable. But, just as the different rules which make up the doctrine of consideration were gradually developed from the procedural rules which regulated the competence of the action of assumpsit, so some of the rules as to the invalidity of contracts, the greater part of the rules which regulated the conditions under which the parties could enforce their contracts, and the forms and modes of discharge, were gradually built up from the same procedural basis. It is true that some of these rules owed something to the mediaeval rules as to covenants and conditions contained in deeds, which, for the most part, related to the land law ; and that other doctrines, e.g. the rules as to payment and tender, which first made their appearance in connection with the land law,1 were adapted to the law of contract. But most of the substantive rules of our modern law were built up from decisions as to the rights of the parties in personal actions, and more especially in actions of assumpsit, brought to enforce contracts ; and it is only when these decisions have begun to accumulate, that the substantive rules begin to take their modern shape.

During this period these rules are for the most part only beginning to be developed. In many cases their later development is the work of the eighteenth and nineteenth centuries, and will be related in the succeeding Book of this History. In these cases, therefore, it will only be possible at this point to indicate briefly the origins of some of these rules, under the three heads which I have indicated.

_Invalidity_

That the absence of consideration made a contract invalid followed, as we have seen, from the procedural requirements of assumpsit. Further causes of invalidity flowed from the natureContract and Quasi-Contract

of an agreement, the incapacity of the parties, illegality of object, impossibility, the alteration of a contract under seal, and the effect of statutory provisions. With these causes of invalidity I shall deal in the first place. Secondly, I shall deal with one of the results of these causes of invalidity--the elucidation of the distinction between void, voidable, and unenforceable contracts. Thirdly, I shall say something of the effects of fraud and misrepresentation, and explain why at this period these topics have not assumed the place which they will occupy in our modern law of contract.

(1) Causes of invalidity.

_Causes arising from the nature of an agreement._

We have seen that the contract under seal was the only purely consensual contract known to the medieval common law.1 It is not surprising, therefore, to find that the early authorities on contracts invalid by reason of circumstances vitiating consent are all concerned with these contracts under seal. As early as Edward I,'s reign Fleta stated that a deed executed under a mistake as to its contents and without negligence was not binding.2 But we have seen that the mediaeval common law had not acquired a doctrine of negligence;3 and so, in the Year Books, Fleta's rule was stated in the following form: if an unlearned man, to whom the provisions of a deed had been wrongly read, executed it under a mistake as to its contents, he could say that it was not his deed.4 The principle of these cases was summed up by Coke in \_Thoroughgood's Case_5 (1584), where it was held that if an illiterate man was induced, either by a party to the deed or by a stranger, to deliver as his deed a document which contained provisions quite different from those which he intended, the deed was void. Clearly this decision depends at bottom on the principle that the party so deceived has never consented. The fact that the person deceived was illiterate is really immaterial, as was seen by some of the judges 6 before _Thoroughgood's Case_ was decided, provided, as Fleta in the thirteenth century,7 and as the later cases point out,8

## 6 Invalidity

there has been no negligence. It was inevitable that, as the idea that the essence of contract is consent became more distinctly realized, the principle should be applied to all kinds of contracts. In t86g it was applied to a case where a man was induced to indorse a bill of exchange by the fraudulent representation of the acceptor that he was signing a guarantee ; \[1\] and other modern cases afford illustrations of different varieties of this fundamental error or common mistake, which, because it excludes consent, prevents the conclusion of any contract.\[2\]

Similarly, there was authority in the Year Books that an agreement induced by threats or violence could be avoided,\[3\] because in such a case consent was not freely given.\[4\] "If a stranger menace A to make a deed to B, A shall avoid the deed which he made by such threats as well as if B himself had threatened him." \[5\] This was a slight advance on some of the earlier authorities, which had refused to pay any attention to duress by a stranger; \[6\] but the common law still continued to take so narrow a view of what constituted duress \[7\] that there was abundant need for the creation and elaboration by equity of a doctrine of undue influence as a supplementary cause of invalidity. It was, however, very early recognized that the effect of duress was different from the effect of a common mistake. Inasmuch as consent had been given, though not freely given, the effect was to render the deed not void but voidable.\[8\]

_Causes arising from the incapacity of the parties._

That a married woman's contract was, with very few exceptions, absolutely void, was a principle which had been clearly ascertained in the Middle Ages.\[9\] On the other hand, it was reasonably clear that an infant's contract, other than a contract for necessaries, was voidable at his option; \[10\] and it was settled early in the seventeenthContract and Quasi-Contract

century that, if an infant took a lease of property, he was liable for the rent, if he did not repudiate it during his infancy.1 Moreover, the court was careful to safeguard the infant's liability for necessaries. A bond for the payment of money lent, though it was for the purchase of necessaries ; and a contract to buy goods " to maintain his trade though he gain thereby his living " did not bind him.3 Whether or not the infant's liability was truly contractual, so that he was liable to pay the contract price, or whether it was rather quasi-contractual, so that he was only liable to pay a reasonable price, was not as yet clearly ascertained. We have seen that in the Middle Ages there is some authority for the proposition that, the action of debt lay against him, and if this action lay it could be brought only for the contract price.4 It is clear, too, that for the rent reserved on a lease made during infancy he could be sued by action of debt,5 for otherwise he could not have been sued at all.6 But in many cases where he was sued for necessaries the form of the action was assumpsit on a quantum merit ;7 and in this action the plaintiff could obviously recover only a reasonable price. Thus the form of the action usually employed gave rise to the modern idea, to which effect is given by the Sale of Goods Act,8 that his liability for necessaries is rather quasi-contractual than contractual.9

Footnote 1: Ketsey's Case (16f14) Cro. Jac. 330.

Footnote 2: "An infant may bind himself tx pay for his necessary meat, drink, apparel, necessary physick, and such other necessaries, and likewise for his good teaching or instruction, whereby he may profit himself afterwards; but if he bind himself in an obligation or other writing, with a penalty for the payment of any of these, that obligation shall not bind him," Co. Litt. 72a.

Footnote 3: Whittingham v, Hill (16f19) Cro. Jac. 494.

Footnote 4: Vol. iii 519 n. 5; this was assumed to be good law in Makarell v, Bachelor (15g98) Cro. Eliz. 583.

Footnote 5: Ketsey's Case (16f14) Cro. Jac. 330.

Footnote 6: Vol. vii 263, 272.

Footnote 7: See e.g. Ive v. Chester (16zo) Cro. Jac. 56o; Rainsford v, Fenwick (16f9) Carter 215.

Footnote 8: Nash v. Inman \[T90s\] a K.B, at pp. 8-9 _fer_ Fletcher-Moulton, L.J.

Footnote 10: On this topic see generally Pollock, Contracts (9th ed.) 96-101.

Footnote 11: "As for a drunkard, who is voluntarius daemon, he hath (as hath been said) no privilege thereby. ... And if an idiot make a feoffment in fee, he shall in pleading never avoid it by saying that he was an idiot at the time of his feoffment," Co. Litt. 247a.

Footnote 12: "Every deed feoffment or grant, which any man _non compos mentis_ makes, is avoidable, and yet shall not be avoided by himself, because it is a maxim in law, that no man of full age shall be in any plea to be pleaded by him, received by the law to stultily himself, and disable his own person," Beverley's Case (1603) 4 Co. Rep. at f. r23a.

The treatment by the law of the contracts of drunken persons or lunatics was for some time uncertain.10 Coke, speaking of dispositions of their property made by them, laid it down that the lunatic and idiot, and a fortiori the drunkard whose disability was his own fault, could not be allowed to avoid them ;11 and presumably he would have applied the same principles to their contracts,12 Invalidity

But it is doubtful if this was ever really accepted as law. It was certainly not the law of Bracton's day, who on this point followed Roman law;1 and Fitzherbert expressly dissents from it, and maintains that the dealings by a linatic with his property were, like the dealings of an infant, voidable.2 In the eighteenth century it was thought that, if the hunacy or drunkenness was so complete that the lunatic or drunkard was incapable of consent, the contract was void.3 But there are many cases in which a man is a lunatic or drunk, but not completely incapacitated ; and it may well be that his state is not immediately obvious to the other contracting party. It would be hard to rule that in such cases the contract was wholly void; and so in 1848 the principle which had been for some time acted on by the court of Chancey 4 was adopted ; and it was laid down that a contract entered into by a lunatic or drunken person makes the contract voidable at his option, provided that his state was known to the other contracting party.5

Footnote 1: **Furious autem stipulari non potest, ne aliquod negotium agree, quia non intelligit quid agit," f. rooa. 2 F.N.B. 2oz D. 3 Yates v. Boen (1739) 2 Str. 1704; Pit v. Smith (181r) 3 Camp. 33; Pollock, Contracts 98-roo. 4 Ibid 98. n. (g). 5 Molton v. Camuroux (1848) 2 Ex. 487, 4 Ex. 17. 6 (755r) Plowden at p. 64. 7 Bridge v. Cage (1606) Cro. Jac. 103 ; Mackeller v. Todderick (1634) Cro. Car. 337. Rosindale's Case cited in Hussey v. Jacob (1697) r Ltd. Raym. at p. 89. 8 Pollock, Contracts (98d ed.) 443-444.**

_Illegality of object._

That an agreement to do something contrary to law is void has necessarily been recognized from the earliest times. "If," it was said in _Dive v. Manningham_," the obligation was to save one harmless if he killed such an one or did such a trespass, the obligation should be void. So shall it be here, for the obligation is to save the sheriff harmless for doing a _tort_ and a thing contrary to law, in which case the obligation is void by the course of the common law ". There are many cases of this period which lay down the principle that, if the whole consideration for a contract is illegal, the contract is void;7 and this is still the law, for the illegality of the consideration vitiates the whole.8 In certain of these cases, however, we can see the origin of distinctions which, to some extent, limit the generality of this principle. Two of these distinctions are well established in our modern law, and the third is obsolete.

Footnote 1: **Furious autem stipulari non potest, ne aliquod negotium agree, quia non intelligit quid agit," f. rooa. 2 F.N.B. 2oz D. 3 Yates v. Boen (1739) 2 Str. 1704; Pit v. Smith (181r) 3 Camp. 33; Pollock, Contracts 98-roo. 4 Ibid 98. n. (g). 5 Molton v. Camuroux (1848) 2 Ex. 487, 4 Ex. 17. 6 (755r) Plowden at p. 64. 7 Bridge v. Cage (1606) Cro. Jac. 103 ; Mackeller v. Todderick (1634) Cro. Car. 337. Rosindale's Case cited in Hussey v. Jacob (1697) r Ltd. Raym. at p. 89. 8 Pollock, Contracts (98d ed.) 443-444.** Contract and Quasi-Contract

" It is unanimously agreed in 14 H. 8 25, 26 that if some of the covenants of an indenture, or of the conditions endorsed upon a bond, are against law, and some good and lawful ; that in this case the covenants or conditions which are against law are void ab initio, and the others stand good."1 (ii) It was settled in 1623 that if one man makes a promise to another, in consideration of the performance of a service by that other, which is not manifestly unlawful, and is not known to the person who performs it to be unlawful, the fact that it is unlawful will be no answer to an action on the promise to pay for it.2 " If I request one man to enter into another man's ground, and in my name drive out the beasts and impound them, and promise to save him harmless, this is a good assumpist, and yet the act is tortious ; but .

Invalidity

political expediency, which is a matter for the consideration of the statesman and not of the judge. But Parke, B., who used these words, admitted that some decisions have been founded " upon the prevailing and just opinions of the public good ; for instance the illegality of covenants in restraint of marriage or trade ";1 and he pointed out that " public policy," if the term was used to signify the policy of the law, might be "a just ground for judicial decision," for, " it amounts to no more than that a contract or condition is illegal which is against the principles of the established law."2 In fact, a body of law like the common law, which has grown up gradually with the growth of the nation, necessarily acquires some fixed principles; and, if it is to mantain these principles, it must be able, on the ground of public policy or some other like ground, to suppress practices which, under ever new disguises, seek to weaken or negative them.3 Only thus can it maintain the essential continuity of its principles. At the same time, because this principle of public policy gives to a legal system the power of preserving in this way the continuity of its principles, it also gives it the power of developing its principles so as to keep them in touch with the needs and ideas of the age. It thus helps to secure, not only continuity, but a so a certain elasticity in the growth of the law. The decision, for instance, in the case of \_Bowman v. The Secular Society_4 would have been as unintelligible to lawyers of an earlier age, as their tolerance of traffic in offices of trust5 is to us.

Footnote 1: The term 'public policy' may indeed be used only in the sense of the policy of the law, and in that sense it forms a just ground of judicial decision. It amounts to no more than that a contract or condition is illegal which is against the principle of the established law. If it can be shown that any provision is contrary to well decided cases, or the principle of decided cases, and void by analogy to them, and within the same principles, the objection ought to prevail; "ibid at pp. 123-124.

Footnote 2: "The determination of what is contrary to the so-called 'policy of the law' necessarily varies from time to time. Many transactions are upheld now by our courts which a former generation would have avoided as contrary to the supposed policy of the law. The rule remains, but its application varies with the principles which for the time being guide public opinion," Evanutrel v. Evanutrel (t874) L.R. 6 P.C. at p. 29; " rules which rest upon the foundation of public policy, not being rules which belong to the fixed or customary law, are capable, on proper occasion, of expansion or modification. Circumstances may change and make a commercial practice expedient which formerly was misclicuous to commerce," Maxim Nordenfelt Co. v. Nordenfelt \[1893\] I Ch, at p. 661 _fer_ Bower, L.J.; these dictata were approved by Vaughan Williams, L.J., in Wilson v. Camley \[1905\] I K.B. at pp. 737-735--\*1 cannot," he said, " in the least acquiese in the suggestion that as habits change and time goes on, we may not find new instances of contracts which cannot be enforced on the ground that they are contrary to public morality."

Footnote 4: \[1917\] A.C, 406; below 476, * Vol. i 250-25I.

Footnote 5: "The term 'public policy' may indeed be used only in the sense of the policy of the law, and in that sense it forms a just ground of judicial decision. It amounts to no more than that a contract or condition is illegal which is against the principle of the established law. If it can be shown that any provision is contrary to well decided cases, or the principle of decided cases, and void by analogy to them, and within the same principles, the objection ought to prevail; "ibid at pp. 123-124.

Footnote 6: "The determination of what is contrary to the so-called 'policy of the law' necessarily varies from time to time. Many transactions are upheld now by our courts which a former generation would have avoided as contrary to the supposed policy of the law. The rule remains, but its application varies with the principles which for the time being guide public opinion," Evanutrel v. Evanutrel (t874) L.R. 6 P.C. at p. 29; " rules which rest upon the foundation of public policy, not being rules which belong to the fixed or customary law, are capable, on proper occasion, of expansion or modification. Circumstances may change and make a commercial practice expedient which formerly was misclicuous to commerce," Maxim Nordenfelt Co. v. Nordenfelt \[1893\] I Ch, at p. 661 _fer_ Bower, L.J.; these dictata were approved by Vaughan Williams, L.J., in Wilson v. Camley \[1905\] I K.B. at pp. 737-735--\*1 cannot," he said, " in the least acquiese in the suggestion that as habits change and time goes on, we may not find new instances of contracts which cannot be enforced on the ground that they are contrary to public morality."

Footnote 7: "The term 'public policy' may indeed be used only in the sense of the policy of the law, and in that sense it forms a just ground of judicial decision. It amounts to no more than that a contract or condition is illegal which is against the principle of the established law. If it can be shown that any provision is contrary to well decided cases, or the principle of decided cases, and void by analogy to them, and within the same principles, the objection ought to prevail; "ibid at pp. 123-124.

Footnote 8: "The term 'public policy' may indeed be used only in the sense of the policy of the law, and in that sense it forms a just ground of judicial decision. It amounts to no more than that a contract or condition is illegal which is against the principle of the established law. If it can be shown that any provision is contrary to well decided cases, or the principle of decided cases, and void by analogy to them, and within the same

## 56 Contract and Quasi-Contract

law in touch with the facts and needs of daily life.1 No doubt, in its application to the law of contract, we must remember the epigram of Jessel, M.R., to the effect that not lightly to interfere with freedom of contract is paramount public policy.2 But that was said in the days when freedom of contract was supposed to be the panacea for all the ills of the body politic. It represented a passing phase of political thought ; and it would now command as much and as little assent as it would have commanded in the sixteenth and seventeenth centuries. Historically, complete freedom of contract was never regarded as ''paramount public policy.'' If the common law had ever taken this view it would, in effect, have abandoned its valuable concept of public policy, and have thereby lost much of its power of shaping the legal and political ideas of the many races which acknowledge its sway ; for, as Bowen, L.J., truly said,3 ''the interests of contracting parties are not necessarily the same as the interests of the commonwealth.''

Footnote 1: See Rodriguez v, Speyer Bros. \[17g\] A.C. at pp. 79-8r _per_ Lord Haldane.

Footnote 2: ''If there is one thing which more than another public policy requires it is that men of full age and competent understanding shall have the utmost liberty of contracting, and that their contracts when entered into freely and voluntarily shall be held sacred and shall be enforced by courts of justice. Therefore you have this paramount public policy to consider in that you are not lightly to interfere with this freedom of contract,'' Printing Co. v, Sampson (r8;5) rg Eq. at p. 465.

Footnote 3: Maxim Nordenfelt Co. v, Nordenfelt \[17g93\] r Ch. at p. 661.

Because the common law has, largely through its system of case law, kept in touch with the needs of the day, it is a little difficult to say exactly to what kinds of transaction this concept of public policy was first applied. In the sphere of contract law it has been said that it was first applied to discourage wagering contracts.4 In truth, it is much older than this. Long before these contracts became enforceable through the development of assumpsit, it had been applied to invalidate transactions which ran counter to the morality of the day. In fact, one of the oldest and one of the most continuous of its applications in the sphere of contract law is its application to contracts in restraint of trade.5 We can see from the bulk of the commercial legislation enacted at all periods in the history of English law,6 that all matters connected with trade have always possessed great legal and political importance; and that the law relating to them has reflected very accurately prevailing political and economic ideas.7 It is not, therefore, surprising to find that the law as to contracts in restraint of trade has, more than any other class of contracts, been moulded by changing ideas of public policy.

Footnote 4: Pollock, Contracts (gth ed.) 38.0.

Footnote 5: See Anson, Contracts (zrth ed.) 221 (n).

Footnote 6: Vol. ii 466-473; vol. iv 314-407; vol. vi 313-360.

Footnote 7: The history of the usury laws, below too-122, is a good illustration.

In the Middle Ages, where the object of the Legislature was

## 6.1 Invalidity

the attainment of ideally fair conditions of commerce and industry, when, with this object in view, their conditions were minutely regulated by statutes and local by-laws,\[1\] any attempt to disturb the working of these regulations of contract was regarded almost as a crime.\[2\] Such an attempt was akin to the operations of the injuituitous forestaller and regrator ; and there is little doubt that all contracts in restraint of trade were, on these principles, regarded as wholly illegal. But we have seen that, during the sixteenth century, political and moral ideas were changing as rapidly as the conditions of trade ; and that these changes necessarily produced many changes in men's economic ideas.\[3\] The object aimed at was not so much the attainment of ideally fair conditions as the increase in national power. Traders must be encouraged to found new industries, and, with that object in view, new associations and companies must be founded, in order that the requisite capital might be provided. Freer play must be left to the initiative of the individual trader or body of traders, and therefore to their power to make what contracts they pleased. Trade was not, as we have seen, left free in the modern sense.\[4\] As in the Middle Ages, it was still only free within the limits not covered by regulation ; and, though those regulations now left a wider scope to the activities of the traler, anything which infringed those regulations was still regarded as the infringement of the freedom of trade as defined by law. So that, just as a monopoly which infringed the freedom of trade as thus understood was illegal,\[5\] so a contract restraining a man from trading must be for the same reason held to be void.

Throughout the sixteenth century this was the view taken by the courts. They therefore held to be void all contracts in restraint of trade. Thus, in i578, a covenant by an apprentice with his master not to exercise his trade in Nottingham for four years,\[6\] and in i587 a covenant not to exercise the trade of blacksmith in Southmins in Surrey,\[7\] were held to be void. In i602, in the case of _Colgate v. Bachelter_,\[8\] it was resolved that it was illegal "'to prohibit or restrain any to use a lawful trade at any time or at any place ; for as well as he may restrain him for one time or one place, he may restrain him for longer times and more places, which is against the benefit of the commonwealth "; and Anderson, C.J., remarked that a man " might as well bind

## 58 Contract and Quasi-Contract

himself that he would not go to church."1 This remark shows that, as in the Middle Ages, these contracts were still considered to be illegal, because they attempted to vary the conditions of trade as settled by law; and in all of them the dictum of Hull in Henry V.'s Year Book 2 was cited. The mediaval point of view was still predominant.

Footnote 1: Owen I43; cp. the Case of the Tailors of Ipswich (t675) II Co. Rep. at f. 54a, where an ordinance restricting apprentices in their trade was held void as contrary to the Act of 5 Elizabeth c. 4 (see vol. iv 38o seq.), and as contrary to the policy of the common law.

Footnote 2: Cited vol. ii 468 n. 3.

But, as more scope was given to the individual, as he therefore became more free to make what contracts he pleased, it began to be seen that this rigid rule worked injustice. The sale of a business would be impossible, if the vendor could at once set up a shop next door, and begin to compete with a purchaser; and it was felt to he hard that an apprentice could, as soon as he had served his time, use all his former master's trade secrets to compete with him. Therefore contracts imposing a limited restraint of trade were in fact made. Consequently, the courts found it necessary to revise their attitude to them. The case of _Rogers v. Parry_ in 16143 marks the beginning of this change. In that case the defendant had, in consideration of a sum of money paid by the plaintiff, promised the plaintiff that he would not carry on the trade of a joiner in a certain shop, during the term of twenty-one years for which he held the shop. Coke, C.J., pointed out that this was not a contract in general restraint of trade; and the whole court agreed that, "as this case here is for a time certain and in a place certain a man may well be bound and restrained from using of his trade"; and this view of the law was upheld in the court of Exchequer Chamber in 1621 in the case of _Broad v. Jollyfe_,4 and given effect to in several contemporary and subsequent cases.5

Footnote 2: Jelliet v. Broad (t621) Nov 98; Bragge v. Stanner (1622) Palmer 172; Prugnell v. Gosse (1649) Alleyn 67; Hundocke v. Blacklowe (t670) z Wms. Saunders 156.

But it is clear that these cases gave only a very carefully guarded liberty to make these contracts. They only established an exception to the general rule that these contracts were prima facie illegal. It was thus necessary to define the conditions under which they would be held to be valid. In the first place, it was held that they must be limited as to space; and they were at first very narrowly limited. Thus, in 1668, the courts were inclined to hold that a covenant not to set up a trade in Cirencester was void.6 In the second place, it was held that a restraint un

**INVALIDITY**

limited as to space, though limited as to time, was bad.1 In the third place, no restraint could be justified which was not reasonable as between the parties. A limited restraint imposed on the purchase and sale of a business,2 or by a master on his apprentice,3 might be justified. But there must not only be a sufficient consideration, as in the case of all other contracts, but a consideration which was of such a sort that it proved the reasonableness of the transaction.4 Thus, in 1685, a bond taken by the Company of Tailors at Exeter from a tailor not to use his trade in Exeter;5 and in 1689 a bond not to buy certain goods of any but the plaintiff; and not to buy more than a certain quantity,6 were held to be void. In so far as these two cases decided that the court could not enforce such a contract unless it was reasonable as between the parties, they were no doubt rightly decided. But some of the dicta went further. Thus, in the first of them the analogy of the infant's bond for necessaries was used, and it was held that a bond not to exercise a trade was in no circumstances good, though a simple contract to the same effect might be good.7

Footnote 1: See Barrow v. Wood (1643) March rgt, where serjeant Evers admitted that, "if a man binds himself not to use his trade for: two years, or if a husbandman be bound he shall not plough his land, these are conditions against law, because where the restraint is total . . . the condition is not good "; cp. the Case of the Tailors of Ipswich (16f3) ir Co. Rep. 53a.

Footnote 2: "And this was agreed by Rolle for law, who took these differences, that where a bond or promise restrains the exercise of a trade, although it, be as to a particular place only, yet if it be upon no consideration, the bond etc., is void : but if there were a consideration for the restraint, as if A assign a shop to B . . there in respect of the apparent prejudice which may accure to B if A should continue the trade, such a bond or promise is good," Prugnell v. Gosse (1649) Alleyn 67.

3:" Windham said that an apprentice might be bound on this condition, as $Hall$ against $Haves$ Gar. 1, when the original taking and instruction is on these terms," Ferby v. Arrosmith (1668) z Keble 377.

Footnote 4: Above n. 2; cp. Jelliet v. Broad (1621) Noy g8 where emphasis was laid on the adequacy of the consideration; and Clerk v. Taylors of Exeter (1685) 3 Lev. at p. 242.

Footnote 5: Clerk v. Taylors of Exeter 3 Lev. 241.

6: Thompson v. Harvey v Shower z.

7: Clerk v. Taylors of Exeter (1685) 3 Lev. at pp. 242-243; and the same rule was laid down by Reeve, J., in Barrow v. Wood (1643) March at p. 163; but opinions were somewhat conflicting, see Rolle's opinion cited above n. 2, and Dolben's dissenting opinion in Thompson v. Harvey (1689) 1 Shower at p. 3.

8: Vol. vi 333-334.

## 60 Contract and Quasi-Contract

had become at the end of the nineteenth century. The scattered cases, which had begun to modify the older rigid principle, contained the germs of the newer law; but they were not wholly consistent, and some laid down law which was not wholly reasonable. It was obvious that they all required to be reviewed in the light of the new economic ideas which were beginning to prevail. This review of the cases and restatement of the law was made in 1711 by Parker, C.J. (the future Lord Macclesfield), whose judgment in the case of _Mitchel v. Reynolds1_ is the true beginning of the modern law on this subject.

Footnote 1: P. Wms. 181.

The facts in the case of _Mitchel v. Reynolds_ were as follows: The defendant had assigned to the plaintiff the lease of a bakehouse in the parish of St. Andrews, Holborn, for the term of five years, and had given a bond promising to pay a penalty if, during that term, he exercised the trade of a baker in that parish. The question was whether this bond was valid. Parker, C.J., pointed out that restraints on trade might be either involuntary, that is imposed by law or custom, or voluntary, that is imposed by the agreement of the parties.2 The first sort were restraints imposed by grants, charters, customs, or bye-laws; and of these some, e.g. a grant which created a moropoly, were bad, while others, e.g. a bye-law for the better regulation of trade, were good.3 All general restraints imposed by the agreement of the parties, and all restraints whether general or particular made without consideration, were void.4 But particular restraints, if imposed upon a good and adequate consideration, " so as to make it a proper and useful contract"5 were good. In order to prove this thesis, Parker, C.J., made a novel and somewhat unhistorical use of the analogy of those older restraints on trade imposed by the law, which were then beginning to be regarded as obsolete.6 He used it to show that the law had never indiscriminately condemned all restraints on trade, pointing out that, as involuntary restraints had, from time immemorial, been imposed by custom, they must have had a lawful beginning.7 But these involuntary restraints must always have been reasonable, so that even a crown grant which attempted to impose an unreasonable restraint, would be void.8 No doubt the reasons which induced the courts to hold unreasonable involuntary

## 6 Invalidity

restraints did not apply to voluntary restraints ;1 but, as both alike were restraints on trade, this difference did not prevent the law from treating reasonable voluntary restraints in the same way as reasonable involuntary restraints. That the restraints should be reasonable was the important matter. What then should be the test of reasonableness ? The law should look to see whether the restraint imposed, either a restriction on the party which would prevent him from earning his livelihood, or a hardship on the public by depriving it of the abilities of one of its members.2 More especially should it look to see that these contracts do not facilitate the operations of those corporations, " who are perpetually labouring for exclusive advantages in trade and to reduce it into as few hands as possible ";3 or the operations of "masters who are apt to give their apprentices much vexation on this account, and to use many indirect practices to procure such bonds from them, lest they should prejudice them in their custom when they come to set up for themselves."4 If none of these evils appeared to be likely to result from a contract stipulating for a particular restraint, it was reasonable and valid,5 even though the contract took the form of a bond.6 But the onus of proving that it has satisfied these tests of reasonableness is always on the party seeking to enforce it, and, if he cannot satisfy that onus, it is void ; for the law always presumes these contracts to be void.7

Footnote 1: "The true reason of the disallowance of these (voluntary restraints) in any case is never drawn from _Magna Charta_; for a man may voluntarily and by his own act put himself out of his possession of his freehoM, ... Neither is it a reason against them that they are contrary to the liberty of the subject; for a man may, by his own consent, part with his liberty; as in the case of a convenant. out to erect a civil upon his own lands," I P, Wms. at pp. 188-189.

Footnote 2: Ibid at pp. 190.

Footnote 3: Ibid at pp. 191, 197.

Footnote 4: Ibid at pp. 194-196.

Footnote 5: Ibid at pp. 191-197.

This case stands at the parting of the ways. In the play which it makes with the older regulations, depending on crown grants customs and bye-laws, we can see traces of methods of controlling trade which had fast been weakening ever since the Revolution ; and, in the manner which it uses the analogy afforded by the control, which the common law exercised over the reasonableness of these regulations, we can see a skilful adaptation of the principles underlying this control, to those new voluntary restraints which the greater freedom accorded to trade was making increasingly common. The control, which formerly was applied to the older involuntary restraints, must be adapted to the more modern voluntary restraints. And some adaptation was necessary, both because the control of these voluntary restraints could not be justified on quite the same grounds, and because new tests of reasonableness must be supplied. I: is in the definition of these new tests that this case lays down substantially modern law. NoContract and Quasi-Contract

doubt changes in economic conditions have rendered some of the dicta contained therein obsolete. No doubt certain expressions are misleading and have misled--the use throughout the case of the term consideration, both in its technical sense, and in a non-technical sense to mean a reasonable ground for making a contract,1 was the foundation of erroneous ideas as to the part which consideration played in relation to these contracts.2 No doubt the leading principles there laid down were somewhat obscured by the detailed rules, and fine distinctions, which were elaborated by the long line of cases which followed it.3 But, when all deductions have been made, there is no doubt that we see in this case the same principles which were restated, and applied to a new economic environment, in _Nordenfelt v. the Maxim Nordenfelt Co._,4 in _Mason v. the Provident Clothing Co._,5 and in _Morris v. Saxelby._,6 All these decisions follow this case in recognizing that contracts in restraint of trade are prima facie void. The first recognizes pre-eminently the principle that they must not be injurious to the public. The other two that they must not be oppressive to the party restrained. In fact, the two main evils pointed out by Parker, C.J., as likely to result if these contracts were not carefully controlled--the danger of allowing a great corporation to get too exclusive a control of trade, and the danger that masters would oppress their apprentices--precisely correspond to the two sets of circumstances in which these contracts are usually made. They are usually made, either on the purchase and sale of a business, or on the engagement of an employee; and, as the modern cases show, it is the first of these dangers which must be specially guarded against in the former, and the second in the latter type of case.

Footnote 1: See especially I P. Vms. at pp. 192-193 where consideration is used (t) in the sense of evidence of reasonableness, and (z) is compared with the consideration in a covenant to stand seised.

Footnote 2: "It was laid down in _Mitchel v Reynolds_ that the court was to see that the restriction was made upon a good and adequate consideration, so as to be a proper and useful contract. But in time it was found that the parties themselves were better judges of that matter than the court, and it was held to be sufficient if there was a legal consideration of value; though of course the quantum of the consideration may enter into the question of the reasonableness of the contract," Nordenfelt v. Maxim Nordenfelt Co. \[1894\] A.C. at p. 556_fer\_ Lord Macaughten; see I S.L.C. (roth ed.) 404-405, and Hitchcock v. Coker (183); 6 A. and E. at pp. 456-457_fer\_ Tindal, C.J.

Footnote 3: "A good account will be found in the work to this case in S.L.C. (roth ed.) 402 seq. ; and in the judgments in Nordenfelt v. Maxim Nordenfelt Co. \[1894\] A.C. 535, especially Lord Macaughten's criticism of the views of Bowen, L.J. at pp. 562 seq. 4 \[1894\] A.C. 535. \[1973\] A.C. 724. \[1976\] 1 A.C. 688.

_Impossibility._

The parties to a contract may either (i) promise something absolutely impossible in itself or made impossible by law; or (ii) something not inherently impossible, but impossible in fact; or

**INVALLIDITY**

(iii) the object of the contract may be made impossible by the act of one of the parties to the contract. The last named case is really one of the ways in which a contract may be discharged by breach, and I shall speak of it under that head.1

Footnote 1: Below 78.

(i) As to promises which are absolutely impossible in themselves there is not much authority.2 Probably a contract, in which such a stipulation was the consideration for a promise, would be held to be void because there was in fact no real consideration.3 But such promises have sometimes come before the courts in the shape of conditions in bonds. A promises B to pay a sun certain, with a condition that, if a certain event happens, the promise to pay is to be void. What is intended is to secure the happening of the event; and " whether the condition is illegal our courts have found no difficulty in considering the bond as what in truth it is, an agreement to do the illegal act But in the case of impossibility the law has stuck at the merely formal view of a bond as a contract to pay the pena sum, subject to be avoided by the performance of the condition; accordingly, if the condition is impossible either in itself or in law, the obligation remains absolute."4 On the other hand, if the condition is subsequently made impossible of performance by the act of God, or if one of several conditions is thus made impossible, the bond becomes void.5

Footnote 2: See Pollock, Contracts (9th ed.) 309.

Footnote 3: Anon, Contracts (tzth ed.) 357.

Footnote 4: Pollock, Contracts (9th ed.) 335; Co. Lit., 206b (there cited) says, " If a man be bound in an obligation etc, with condition that if the obligor do go from the church of St. Peter in Westminster to the church of St. Peter in Rome within three hours, that then the obligation shall be void. The condition is void and impossible, and the obligation standardh good."

Footnote 5: * Where a condition of a bond consists of two parts in the disjunctive, and both are possible at the time of the bond made, and afterwards one of them becomes impossible by the act of God, the obligor is not bound to perform the other part: for the condition is made for the benefit of the obligor, and shall be taken beneficially for him, and he hath election to perform the one or the other for the saving of the penalty of his bond: and when one part is become impossible by the act of God, it is as beneficial for him as if that part of the disjunctive, which is become impossible, had been only the condition of the bond," Laughter's Case (1595) 5 Co. Rep. at f. 22a; Pollock, Contracts 335.

Footnote 6: Harvey v. Gibbons (1676) 2 Lev. 161.

7: * En tels cases on ul default est en le obligee en le performance del condicion, en caux cases si la condicion ne soit performne, 'lobligor forfeitera, come en case siFootnote 1: The _Pigot's Case_ is the _Pigot's Case_, and the _Pigot's Case_ is the _Pigot's Case_.

Footnote 2: The _Pigot's Case_ is the _Pigot's Case_.

Footnote 3: The _Pigot's Case_ is the _Pigot's Case_.

## 64 Contract and Quasi-Contract

This principle is well illustrated by the case of _Paradine v. Jane_.1 In that case the plaintiff suel the defendant for three years arrears of rent. The defendant pleaded that Prince Rupert had kept him out of possession from July, 1643, till March, 1646, so that he could not take the profits. It was held that this plea was no answer to the action. "And this difference was taken, that when the law creates a duty or charge, and the party is disabled to perform it without any default in him, and hath no remedy over, then the law will excuse him. As in the case of waste, if a house be destroyed by tempest or by enemies, the lessee is excused. But when the party by his own contract creates a duty or charge upon himself, he is bound to make it good, if he may, notwithstanding any accident by inevitable necessity, because he might have provided against it by his contract." This is still the law if the contract is in terms unconditional. And at this period the courts were the more ready to apply it to all contracts, because, as we shall see, they were inclined to hold that where the two parties to a contract made mutual promises, those promises were independent of each other, so that each could sue the other for the breach of the other's promises, whether or not the party suing had performed his part.2 We shall see that later the tendency was the other way, and the courts were more inclined to hold that such promises were dependent the one upon the other, so that non-performance by one party was an excuse for non-performance by the other.3 But this enabled more attention to be paid to the underlying intention of the parties when they entered into the contract, and so made it possible to hold that they were excused by the happening of events which neither had contemplated at that date.4 This has led to numerous exceptions which have, to a large extent, eaten up the or.ginal rule. The original rule is now only applicable in cases where the parties have used words which show that they intended their promises to be absolute.

Footnote 1: (1648) Aleyn 26.

Footnote 4: Pollock, Contracts 279.

_The alteration of a contract under seal._

It was laid down in \_Pigot's Case_5 that, if a deed is altered in a material point, either by a party to it or by a stranger, the deed becomes void. If it is altered in an immaterial point by a party to it, it likewise becomes void ; but if it is altered in an

## 6.1 Invalidity

inmaterial point by a stranger without the privity of the party, the deed is not avoided. These rules laid down by Coke are the foundation of the present law applicable to all written contracts.1

Footnote 1: See Master v. Miller (t791) 4 T.R. at p. 330 for Lord Kenyon, C.J.,

_Statutory Provisions._

The two statutes affecting the validity of contracts of which I intend to speak at this point are the statute of Frauds 2 and the statute of Limitation.3 Of the first I need say little as I have already discussed the effect of the two sections--the fourth and the seventeenth--which affect the validity of contracts.4 We have seen that the question whether the fourth section rendered the contract void, or left it valid but unenforceable by action, was for some time doubtful; but that, before the point was actually decided, the better opinion was that it only rendered the contract unenforceable.8 We have seen too that the question as to the effect of the seventeenth section was never finally decided.6 On the other hand, it was reasonably clear from the words of James I.'s statute of Limitation that that statute affected, not the right under a contract, but the right to enforce it. As the court said in the case of _Wainford v. Barker_," it is a debt tho' barrable by pleading of the Statute."

Footnote 2: See Master v. Miller (t791) 4 T.R. at p. 330 for Lord Kenyon, C.J.,

Footnote 3: 21 James I. c. 16 SS 3; vol. iv 533.

Footnote 4: Vol. vi 390-393. * Above 35.

Footnote 5: Vol. vi 385 n. 4. * (t69) 1 Ltd. Raym, 232.

Footnote 6: Vol. vi 385 n. 4. * (t69) 1 Ltd. Raym, 232.

Footnote 7: Vol. vi 385 n. 4. * VCL VIII.--5

### Contract and Quasi-Contract

_si actio_, because the delivery of the deed was not void. And so is the diversity when a mar shall say _non est factum_, and when he shall demand judgment _si actio_."1 Or, to translate these differences from the phraseology of adjective to the phraseology of substantive law, so is the diversity between void and voidable. Similarly, it is clear from the manner in which the courts interpreted the statute of Limitation, and the fourth section of the statute of Frauds, that they hed a clear enough appreciation of the practical consequences of the differences between void and unenforceable.

Footnote 1: Dive v. Manningham, Plowden at p. 66 _per_ Mountainque, C.J.; as we have seen there was Year Book authority for these propositions, above 51 n. 3.

But, though the courts have shown a clear enough appreciation of these essential differences, both they and the Legislature have often used the terms void, voidable, and unenforceable very loosely. The word void is often used where either voidable or unenforceable is meant. Thus, the incorrect term " void " was applied to infants' contracts instead of the correct term " voidable," before certain of these contracts had really been made void by the Infants' Relief Act;2 and the same term was sometimes applied to contracts which were not evidenced by writing as required by section four of the statute of Frauds.3 So that, as Sir F. Pollock has truly said, " the language of text writers, of judges, and even of the Legislature, is no safe guide apart from the actual decisions."4 We shall, I think, find the explanation of this curious phenomenon in the fact that these differences were worked out mainly from the point of view of the procedure and pleading in an action. The fact that they were so worked out is illustrated clearly enough by the extract from the case of _Dive v. Manningham_ just cited.5 We have seen, too, that the best evidence of the fact that the effect of non-compliance with section 'our of the statute of Frauds was to render the contract unenforceable, is, firstly, the manner in which the courts allowed a memorandum, drawn up after the contract had been made, to be given in evidence ; and, secondly, the growth of the equitable doctrine of part performance.6 Both these rules really originate in rulings as to the evidence admissible to prove the contract. Similarly the long controversies as to whether it was necessary to plead specially the statute of Limitation,7 would hardly have been possible, if the courts had not been conscious that the statute affected, not the validity, but the enforceability, of the contract.

Footnote 2: Pollock, Contracts (9th ed.) 59-66.

Footnote 3: See e.g. Birknyr v. Darnell (1703) SS Salk, a p. 28.

Footnote 4: Contracts (5th ed.) 54.

Footnote 5: Above 35 ; vol. vi 393, 658-659.

Footnote 6: See note 6 to Hodsden v. Harridge 2 Wms, Saunders 63.

Contract and Quasi-Contract

We have seen that in _Somerion's Case_ it was held that a lawyer who had, in breach of his undertaking, betrayed his employer and acted for his rival, could be made liable in an action of deceit on the case.1 It was no long s:ep to take to hold that, if a person definitely and expressly warranted the truth of certain facts, and the facts turned out to be otherwise, he could also be made liable to an action of deceit on the case.2 In other words, he could be made liable in tort for a false warranty ; and, if he had thus warranted the truth of certain facts, he could be made liable for the damage resulting from their untruth, whether or not he knew them to be untrue.3 It followed, therefore, that if a contract was induced by fraud or misrepresentation the party aggrieved had no remedy by action on the contract ; for the contract was not thereby rendered invalid. But he had an action in tort for deceit if he could prove that the other contracting party knew that his representation was false,4 or if at the time of the contract he had expressly warranted its truth.5

Footnote 1: Vol. iii 437-432.

Footnote 2: Believe x39-x40, citing a Y.B. cf 7 Rich. II. concerning a warranty of a horse, cited vol. iii 408 n, I.

Footnote 3: Ibid 408 and n, 2.

Footnote 4: Dale's Case (r56) Cro. Eliza. 41; Sprigwell' v. Allen (r649) Aleyn. gr.

Footnote 5: Roswell v. Vaughan (r608) Cro. Jac. at p. 197; Rolle, Ab. _Action sur Case_ P. pl. 4 (i p. 90), and see ibid i 97 pl. r, citing a case of 3j Eliza.

It was with reference to contracts for the sale of goods that these principles were almost exclusively developed;6 and it is one of these cases--the case of _Chandelor v. Lopus_ ''--which shows most clearly the attitude of the law at the beginning of the seventeenth century. In that case the plaintiff brought an action on the case against the defencant a jeweller, for that he, ''being a jeweller, and having skill in jewels and precious stones, had a stone which he affirmed to be a Bezoar stone, and sold to the plaintiff for one hundred pounds; _ubi re vera_ it was not a Bezoar stone.'' The plaintiff got a verdict in the King's Bench ; ''but error was thereof brought in the Exchequer Chamber; because the declaration contains not matter sufficient to charge the defendant, viz. : that he _warranted it to be_ a Bezoar stone, or that he _knew that it was not_ a Bezoar stone; for it may be that he himself was ignorant whether it were a Bezoar stone or not ''; and on this ground the judgment was reversed. As it was clear that there had been no warranty, the plaintiff then brought a fresh action, alleging that the defendant knew the stone not to be a Bezoar stone.8 Whether this declaration disclosed a good cause of action

## 12 Invalidity

divided the court, and the ultimate issue of the action is not known.1 But it is clear from this case that a defendant, induced to contract by fraud, had no remedy except in tort; and that he could only succeed in an action of tort if he could prove that the defendant either knew that his statements were untrue, or he had expressly warranted 2 their truth at the time of the making of the contract.3 The only exceptions to this rule were the cases of sales of food and drink, which the law required to be pure, and to which there was therefore annexed an implied warranty of quality.4

Footnote 1: It may perhaps be inferred from the statement of counsel in Southern v. How (167s) Cro. Jac. at p. 469 that the second action succeed; he says distinctly that " because that it was _scians_ the plaintiff had judgment " ; this statement was not contradicted, and Tanfield, J., had said, H.L.R. viii 284, " it is agreed by all that if in this case _scians le defendant_ were omitted, the plaintiff could not recover."

Footnote 2: " Note that by the civil law every man is bound to warrant the thing that he sleitl and conveyeth, albeit there be no express warranty : but the common law bindeth him not unless there be a warranty; either in ded or in law, for _Careat Emptor_," Co. Litt, toza.

Footnote 3: Andrew V. Boughey (1553) Dyer at ff. 7jb, 76a ; in the case of Pope v. Lewyns (1622) Cro. Jac. 6a0 it was held that the poper form of declaration was warranty-zand veduldit _not_ warrantziavitt vendik ; qp. Mew v. Russell (1683) 2 Shower 284.

Footnote 4: Vol. iii 386 ; Street, op. cit. i 379-380.

Footnote 5: " This case is a dangerous case and may be the cause of a multitude of actions, if it be thought that the bare affirmation of the vendor causes the action," Chandelor v. Depus H.L.R. viii 284 _per_ Popham, C.J.

It would seem that the judges, dreading to encourage litigation by disappointed purchasers, were inclined to insist very strictly on the maxim "careat emptor." If a man sells an unsound horse or unsound wine, " it behoveth," says Fitzherbert,6 " that he warrant the wine to be good and the horse to be sound, otherwise the action will not lie. For if he sell the wine or horse without such warranty, it is at the other's peril, and his eyes and his taste ought to be his judges in that case." This, in effect, left the law without any adequate means of repressing fraud. Its definition of fraud was too narrow, in that it did not include statements made recklessly ; and it took no account of statements made at the time of a sale, which in fact amounted to a warranty, unless they were put into the form of an express warranty.7 But it is obvious that, in one respect, the idea that a man might be liable in tort for the breach of an express warranty, tended to develop the law. This liability for breach of warranty, though asserted by an action in tort, existed whether or not the person warranting knew of its falsity. In fact, the ground of the liability was as much contractual as delicual; for it was based on the breach of the warranty as to the truth of the statement warranted.

Contract and Quasi-Contract

This clearly tended to introduce into the law the idea that non-fraudulent misrepresentation might be a ground of liability.

It was not till the eighteenth century that the liability of vendors for mis-statements, fraudulent or otherwise, was extended by the growth of the idea that a warranty could be implied. This development took place, first in relation to warranty of title,1 and later and less completely in respect of warranties of quality. When, towards the close of the eighteenth century, it became possible to sue for damages for breach of a warranty by an action on the contract,2 it became clear that fraud, and certain kinds of non-fraudulent misrepresentaton, had a direct effect upon the validity of a contract. In fact, as Mr. Street has truly said,3 since then " the law of warranty has been transferred almost bodily to the domain of contract." When that happened, the ideas which originated in the law of warranty as applied to sales of goods, during the period when the action on a warranty was an action in tort, were applied to other classes of contract.4 As the result of this development, it will become possible to regard fraud, and certain kinds of non-fraudulent misrepresentation, as having definite effects upon the validity of a contract. But the law had not reached this point at the close of the seventeenth century. The only remedy for a false representation was an independent action in tort; and, as we shall see in the following sections, the rules as to the enforcement of contracts, and as to their discharge by failure of performance, were such that it would hardly have been possible for a person who had been defrauded to get adequate relief by an action on the contract.

Footnote 1: The first advance in this direction was made by Holt, C.J.'s decisions in Crosse v. Gardner (r68g) Carth, 9o, and Micina v. Stoughton (r700) r L.d. Raym. 593, to the effect that an affirmation by a seller in possession of goods that they were his own amounts to a warranty; as Mr. Street says, op. cit. 133, this decision tended to " brea' dwn the rule that express words of warranty are necessary."

Footnote 2: The first reported case in which this was allowed was Stuart v. Wilkins (r778) I Dougl, r8; but according to Buller and Ashhurst, J.J., ibid at p. 22, the practice of so declaring was considerably older, though it evidently struck Lord Mansfield as a novelty.

Footnote 3: Op. cit. 139o.

Footnote 4: At this period there are very few examples of the application of this remedy except in the case of contracts of sale; one of the few cases is Anon. (1683) Skin, r19, where the plaintiff sued the defendant for deceit in preending to be a single person, and inducing her to go through the form of marriage with him; cp. Street, op. cit. 1 392.

## 72 Enforcement

the question arises whether he can do so if he has not himself performed his own duties. It is clear that on this question three possible views may be taken. Firstly, A's right to enforce B's duty under a contract, made between A and B, may be conditional upon A's performance of his own duty ; or A's and B's duties may be regarded as being entirely independent of each other, so that each can sue the other, though the party suing has not performed his part ; or A's and E's duties may be regarded as being due simultaneously, so that neither can sue the other, unless the party suing is ready and willing, at the time of the action brought, to perform his duty.1

Footnote 1: Po:lock, Contracts (9th ed.) 28o.

The rules applicable to this question are, at the present day, regarded as depending on the interpretation of the intention of the parties to the contract. " The court looks to the purpose and effect of the contract as a whole as a guide to the probable intentions of the parties, and the presumption, if any there be, is that breach or default in any material term of a contract between men of business amounts to default in the whole." 2 But this was not so clearly the attitude of the court in the sixteenth and seventeenth centuries. The rules on this subject were still implicated with, and influenced by, the forms of action by which contracts were enforced ; and though, no doubt, the courts attempted to ascertain the intention of the parties, both the procedural rules, and the tendency, which has already been noted in dealing with the interpretation of conveyances,3 to lay down rigid rules of construction, combined to make the law on this topic one of the most technical and least satisfactory parts of the law of contract.

Footnote 4: For an account of the sphere of these different forms of action see vol. iii 417-426, 428, 429 seqq., 446, 447.

As the growth of the law on this topic during this period was largely influenced by the development of the forms of action, I shall consider, firstly, the rules which grew up in the spheres of debt and covenant, and their modification when they came to be applied in the sphere of assumpsit ; and, secondly, the rules which originated in the need to distinguish the spheres of special assumpsit and assumpsit on a quantum merit.4

Footnote 4: For an account of the sphere of these different forms of action see vol. iii 417-426, 428, 429 seqq., 446, 447.

(i) _The rules which grew up in the spheres of debt and covenant, and their modification when they came to be applied in the sphere of assumpsit._

We have seen that the right to bring an action of debt was conditional upon the gift of a thing or the doing of an act by

## 72 Contract and Quasi-Contract

the plaintiff, which would be regarded as quid pro quo for the defendant's promise ; and that, except in the case of the contract of sale of goods, a mere promise to give or perform was not a sufficient quid pro quo.1 It followed that the plaintiff could not recover unless he had performed his side of the bargain ; and we have seen that the same rule resulted from the conditions under which, at the beginning of the sixteenth century, the action of assumpsit lay for nonfeasance in breach of an undertaking ; for, till assumpsit was extended to remedy the breach of wholly executory contracts, the detriment suffered by the plaintiff on the faith of the defendant's promise must have been actually incurred.2 On the other hand, in the case of the contract of sale of goods, the duty to pey and the duty to transfer were regarded as independent obligations, so that each could sue the other for failure to perform, whether or not he had fulfilled his part of the bargain--"contracts of debt," as Vaughan, C.J., said, " are reciprocal grants."3 The same reasoning was applied to the reciprocal covenants of the parties in a contract under seal. This fact is illustrated by the case of _Ware v. Chapel.4_ Ware had by deed covenanted with Chappel that he would provide five hundred soldiers and bring them to a certain port, and Chappel had covenanted to provide shipping and victual for them. Ware sued Chappel for not providing the shipping and victual at the appointed time, and Chappel pleaded that Ware had not raised the soldiers at that time. Rolle, C.J., held that this plea was no answer to the action, because " they are distinct and mutual covenants, and there may be several actions brought for them." He then pointed out that Chappel had his remedy against Ware if he raised not the men, as Ware had against Chappel for not providing the shipping. Under these circumstances it is not surprising to find that the mutual promises which, at the end of the sixteenth century had come to be enforceable by assumpsit, were treated in the same way. This fact is illustrated by the case of _Gover v. Capper_ (1597).5 In that case the defendant owed the plaintiff $\\pounds 20$. The defendant, in consideration of a promise to deliver up the bill evidencing the debt, promised to give two sufficient sureties for the payment of the $\\pounds 20$. The plaintiff sued the defendant, alleging that he had delivered up the bill, but that the defendant had broken his promise by producing two worthless sureties. The defendant pleaded that the plaintiff had not delivered up the bill. The plaintiff demurred, and judgment was given for him, " for the

## 73 Enforcement

alleging that he had delivered the bill was but surplusage; for the consideration was the promise to deliver it; . . . a promise against a promise is a sufficient ground for an action." The same rule was applied in other seventeenth-century cases.\[1\]

But these were only prima facie rules. The courts were always willing to give effect to any expressions used by the parties which indicated, or seemed to indicate, their intentions as to the order in which the mutual undertakings of the parties were to be performed. If it could be gathered that the performance by one was a condition precedent to performance by the other, the other could resist an action until performance had been made.\[9\] On the other hand, if performance by one was not a condition precedent, each could sue the other, whether or not he had performed his part of the agreement.\[3\] In the first case the promises were said to be dependent, and in the second independent. But the rules applied to determine whether, in any given case, a promise was dependent or independent, were so technical and artificial that it was almost impossible to deduce from them any certain principle.\[4\] As Williams says, after citing a number of sixteenth and seventeenth century cases, "the judges in these cases seem to have founded their construction of the independency or dependency of covenants or agreements on artificial and subtle distinctions, without regarding the intent and meaning of the parties." \[5\] As usually happens in these cases, the ingenuity of the judges resulted in the establishment of a number of very artificial rules of construction, which hindered rather than helped the elucidation of the intention of the parties in any given case.\[6\] They had an effect upon the interpretation of the duties of the parties to a contract similar to the equally artificial rules for the interpretation of conveyances, which those same judges were constructing at this period.\[7\]

In fact, so long as the judges considered that the promises to be performed by the two parties to a contract must be eitherContract and Quasi-Contract

dependent or independent, it was really impossible to avoid hardship. It was as hard on a plaintiff to force him to perform as a condition of recovery, as it was on a defendant to require him to perform in spite of the paintiff's failure to perform.1 It was only natural that, while the law was in this state, the arguments of plaintiffs and defendants should be directed chiefly to this simple point of proving dependency or independency; and that, as cases argued on these lines accumulated the rules as to what promises were dependent and what independent should grow more and more subtle and unsatisfactory. It is clear, too, that, so long as the question was regarded from this point of view, it was difficult to decide in accordance with the substantial merits of the case, and to give effec: to the real intentions of the parties to any given contract. Thus, for instance, it is difficult to see how any effect could be given to such defences as fraud or misrepresentation. If the promises were dependent, a plaintiff, though defrauded, could not hope to recover unless he could prove performance; and if they were independent, the fact that he had defrauded the defendant would be no answer to his action.

Footnote 1: Street, Foundations of Legal Liability ii 136; Mr. Street at pp. r32-140 has given a good account of this bran:h of the law to which I am much indebted.

At the beginning of the eighteenth century the courts began to perceive that it was impossible to class all stipulations in contracts as dependent or independent. They began to see that in many cases contracts consisted of " mutual conditions to be performed at the same time"2--in other words, that conditions might be concurrent. This was recognized in 1714, in the case of _Turnor v. Goodzvin_,3 where there was a contract to pay money for the assignment of a judgment debt. Parker, C.J., said,4 "the question is whether the plaintiff's assignment be the first act to be done or not. This differs from the other cases where the time and the consideration are mentioned. The defendant would have assigning to be first assigning, and the plaintiff would have it assigning . after payment. We are all of opinion that there is one way which will solve all these difficulties, and that is the assignment shall neither precede nor wait, but shall accompany the payment, and both to be done at the same time. . The money is here his security til: the assignment; though the money be told over by the defendant and plaintiff, yet it remains the defendant's money, and the plaintiff cannot justify the taking it though laid on the table. On the other hand, the moment he has delivered the assignment, the property of the money is altered. . .

Footnote 3: This is the expression used by Lord Mansfield, C.J., in Kingston v. Preston (1772), cited in Jones v. Barkley (1773) 2 Dougli, at p. 69t.

Footnote 4: Fortescue 145.

Footnote 5: Fortescue 145.

"I

## 75 Enforcement

The this watch ; the money is his if he deliver the watch, if not 'tis otherwise."

To these concurrent conditions neither the rules applicable to dependent, nor those applicable to independent promises, were applicable. It was therefore laid down that in these cases, "'if one party was ready and offered to perform his part, and the other neglected or refused to perform his, he who was ready and offered has fulfilled his engagement, and may maintain an action for the default of the other; though it is not certain that either is obliged to do the first act."1 This tended to diminish the importance of the older cases, which laid down rules as to when the promises of the parties were dependent, and when they were independent. It became more possible to pay attention to the real intention of the parties to the contract ; and to develop rules as to their respective rights and duties, based upon their performance of or failure to perform their contract. When, therefore, towards the close of the eighteenth century, the rules as to the method of treating these concurrent conditions in a contract were settled, the courts began to see that the older rules as to when a condition or promise should be treated as dependent and when as independent, were too rigid and technical ; and they therefore began to lay it down that these matters must be decided by " the good sense of the case."2 In other words, the expressions used by the parties to a contract must be construed in order to discover their intentions, and effect must be given to the intention thus discovered. With the adoption of this changed attitude by the courts of law, the modern history of this branch of the law begins.

Footnote 1: Kingston v. Preston (1773) 2 Dougl. at p. 59r.

Footnote 2: " In ordinary cases of this kind the work is to be done before the wages are earned ; but those cases do not apply to the present, where both the acts are to be done at the same time. Speaking of conditions precedent and subsequent in other cases only leads to confusion. In the case of _Campbell v_, _?ones_, I thought, and still continue to be of that opinion, that whether covenants b or be not independent of each other, must depend on the good sense of the case, and on the order in which the several things are to be done," Morton v. Lamb (1979) 7 T.R. at p. 130 _fer_ Lord Kenyon, C.J. 3 Vol. iii 446-447.

Footnote 3: " Vol. iii 446-447.

(2) _The rules which originated in the need to distinguish the spheres of special assumrsit and assumrsit on a quantum merit._

We have seen that these two branches of the action of assumpsit became distinct in the course of the seventeenth century, and that practical consequences were drawn from these differences.3 Thus we have seen that it was settled in 1696 that indebitatus assumpit would only lie where a debt had been incurred, and that therefore it would not lie on an executory contract where a promise was consideration for a promise.4 It followed that if two parties made

## 76 Contract and Quasi-Contrast

a contract, and the performance of one was a condition precedent to payment by the other, the former could not sue the latter either by action of debt or indebitatus assumpist, or by action of special assumpsit, if he could not allege and prove performance. He could not sue by action of debt or indebitatus assumpsit because the debt was not incurred. Thus when A was employed by B to collect his rents, and B promised to pay him $\\measuredangle$Ioo a year, and B died after A had acted for three quarters of a year, it was held that A could recover nothing from B's executor by action of debt.1 It is clear also that he could recover nothing by special assumpsit, because the promise to pay was in consideration of his service for a year, and such performance he could not allege. He could only have recovered the value of his services if the testator had wrongfully broken his contract; for in that case the special contract would not be in existence, and he would therefore have been in the position of one who had done something of value for another, not under or in fulfilment of a special contract. In such a case the law would have implied a promise to pay what his services were reasonably worth, for which he could have sued by indebitatus assumpsit on a quantum merit.2

Footnote 1: Countes of Plymouth v. Throgmorton (1688) r Salk, 65.

Footnote 2: Vol. iii 447. ${}^{\\circ}$ R. T.R. 320. ${}^{\\circ}$ Ibid at p. 324.

These rules as to the conditions under which special assumpsit and assumpsit on a quantum merit lay, gave rise to the rule, which was clearly laid down in 1795 in the case of _Cutter v. Powell.3_ In that case the defendant promised to pay a sailor thirty guineas, if he " proceeded continued and did his duty " as second mate on a voyage from Jarancia to Liverpool. He died on the voyage, and it was held that his representatives could not recover on a quantum merit. " That where the parties," said Lord Kenyon, C.J., " have come to an express contract none can be implied, has prevailed so long as to be reduced to an axiom in the law."4 This is still the law, if it is clear that no payment is due till the whole of the consideration for that payment has been performed.5 But the need to distinguish between cases of this kind, to which the rule applies, and cases in which the parties have varied their contract, or have in fact accepted something not quite in accordance with it, have given rise to many complicated rules, and to " distinctions more than usually fine."6

Footnote 3: Pollock, Contracts (9th ed.) 285.

The circumstances under which the special contract is resided, so that a person who has performed services under it is entitled to sue on a quantum merit, falls under the next following topic--discharge of contract.

## Chapter 73 Discharge

_Discharge_

The three ways in which contract may be discharged, with which I propose to deal, are, breach; performance or the tender thereof; and agreement.

1. Breach.

It follows from what has been already said as to the enforcement of contracts, that the modern rules applicable to the breach of contract by failure of performance, were not ascertained during this period. If the promises of the two parties were independent of each other, failure of performance by one was not a discharge of the other's obligation. If they were dependent, the plaintiff must prove performance on his side, and it was only then that he could sue for damages if the other party failed to perform. In such a case there could be no question of the right of the plaintiff to rescind the contract, according to whether the failure of performance went to the root of the contract or not, for he had already performed his side of the contract. When, however, it came to be recognized that, where the promises of the two parties were concurrent, either might sue on proof that he was ready and willing to perform, the question arose whether or not any given failure gave the right to rescind the whole contract, or whether it did not give such a right; but only gave a right to sue for such damages as had been sustained by the failure. It is in this connection that, in the eighteenth and nineteenth centuries, the modern distinctions between conditions, and warranties, and warranties ex post facto, grew up. These expressions were used, often inconsistently, to express the differences between those terms in a contract failure to perform which gave rise to a right to rescind, those terms which did not give this right, and those terms which would have given such a right if their breach had not been acquised in \[1\].

But failure to perform a contract may arise from many causes. It may be due, for instance, to fraud or misrepresentation; and we have seen that one of the older remedies for a fraudulent misstatement, which induced a contract, was an action in tort on a warranty, if an express warranty had been given at the time of the making of the contract \[2\]. We have seen, too, that, in the eighteenth century, the scope of this remedy was enlarged by the growth of the conception of an implied warranty; and that it was recognized that false or fraudulent misstatements which induced a contract might be remedied by an action on the contract \[3\].

## 78 Contract and Quasi-Contract

In effect, the result of such misstatements was a total or partial failure of performance; and thus it comes about that, in our modern law, the effect of fraud upon a contract is treated in much the same way as the breach of a condition which amounts to total failure of performance, and gives a right to rescind; while non-fraudulent misrepresentation is treated, according to the nature of the fact or facts misrepresented, either as the breach of a condition which amounts to total failure of performance and gives a right to rescind, or as the breach of a warranty which amounts to a partial failure of performance, and gives only a right to get damages as compensation for its breach.

Other cases of failure of performance, which cause a breach of contract, are a refusal to perform, or impossibility of performance created by one of the parties to the contract. It was recognized in this period that both put an end to the contract, and gave the party injured the right to sue for damages for its breach. That a refusal to perform a contract amounts to a breach is an obvious truism. That it was recognized as a truism can be seen from the case of _Lea v. Exelby_.1 In that case the defendant was possessed of a lease for years, and the plaintiff owned the reversion upon it. The plaintiff promised to pay the defendant a sum of money, and the defendant promised, on payment, to surrender the lease. The plaintiff sued the defendant, alleging that he had tendered the money and that the defendant had not surrendered. It was held that the plaintiff could not recover, because he ought to have alleged, either that he had paid the money, or that he had both tendered the money and that the defendant had refused it. It was the refusal which constituted the breach of the contract for which he was suing; and as refusal had not been alleged, no cause of action arose. That impossibility of performance created by the act of one of the parties to a contract amounts to a breach of the contract is illustrated by the case of _Hulbert v. Watts_,3 where the contrast between impossibility so occasioned, and that occasioned by the act of God, is expressly noted.

Footnote 1: (t60z) Cro, Eliza, 888. (t697) I Ld. Raym, 112,

(2) Performance or the tender thereof.

Performance may take the form either of doing an act or of making a payment. The act promised must be completely performed in order to discharge the duty under the contract; and this was a rule frequently applied in cases where performance was a condition precedent to the right to enforce the fulfilment of the promise of the other party. Thus in t619 a judgment for a plaintiff was arrested, because he failed to show complete per

## 7 Discussion

### 7.1 Introduction

The first attempt to understand the nature of the universe is to understand the nature of the universe. The universe is a very rich and rich and rich and rich, and it is a rich and rich and rich and rich. The universe is a rich and rich and rich and rich, and it is rich and rich. The universe is a rich and rich and rich rich and rich. The universe is rich and rich and rich.

Footnote 1: For example, the _true_ value of the

## 6 Discharge

_dead would discharge a contract under seal, though nothing had been received in satisfaction;_ $1$ _and Croke, in the case of_ Acton v. Symon\_,\_ $2$ _differing from Berkley, J., laid it down that, if the two parties to a simple contract afterwards made a contract under seal to the same effect, the simple contract was discharged._ $3$ _The fact that the law has always given effect :o the lawful intentions of the parties to a writing under seal, and the fact that such a writing is regarded as superior to a mere parol contract or contract made by unsealed writing, has prevented any question arising as to the efficacy of this mode of discharging any contract. We shall now see that the fact that the law, from these two points of view, treated simple contracts very differently, has resulted in raising many difficult questions as to their operation in discharging such contracts._ _(ii) The operation of a simple contract in discharging a contract._ $4$

Footnote 1: \_"If a man acknowledge himself to be satisfied by ded, it is a good bar, without anything received," Finnel's Case (t602) 5 Co. Rep. at f. t17b, citing Fitzherbert Ab, _Barre_ pl. 37 (t63f) Cro., _A_

## 82 Contract and Quasi-Contract1

laid down in argument, and apparently acceded to by the court.1 One mitigation of the strictness of this principle was, however, established in _Blake's Case._ It was settled that if the cause of action was not solely on the ded to recover the money due under it, but to recover unliquidated damages for the breach of some other duty, accord and satisfaction was a good discharge ; " for the action is not merely grounded on the ded, but also on the ded and the wrong subsequent." 2

Footnote 1: "In a writ of annuity payment is plez if it be granted out of the land, otherwise not. And although the truth be that the plaintiff is paid his money, still it is letter to suffer a mischief to one man, than an inconvenience to many, which would subvert a law; for if matter in writing may be so easily defeated and avoided by such surmise and naked breath, a matter in writing would be of no greater authority than a matter of fact," Waberley v. Cockerel (1542) Dyer at ff. 5ra, 51b.

Footnote 2: 6 Co. Rep. at 4.4a.

In the second place, if a simple contract was still executory it could be discharged by the simple agreement of the parties. " If I promise to J.S.," said Dodderidge, J., in 1616,3 " that if he build a house upon my land before Michaelmas, I will pay him a hundred pounds, and I countermand it before he hath done anything concerning the house, it is a good countermand "; for, as was said in _Langden v. Stokes,4_ a promise made verbally may be discharged by words before breach, or, as Coke put it in _Peytoe's Case,5_ " as a contract upon consideration may commence by word, so by agreement by word for any valuable consideration it may be dissolved."

Footnote 3: Hurford v. Pile, Cro. Jac. 483; cp. Treswaller v. Keyne (1622) Cro. Jac. 62o.

Footnote 4: (r635) Cro. Car. 383; $&$ Co. Rep. at 5.79b.

Footnote 5: Street, op. cit. ii 9o-91, and the Y.BB, there cited $&$ Coke summed up their effect when he said in Peytoe Case, (1672) $&$ Co. Rep. at 7.9b, " Every accord ought to be full perfect and complete : for if divers things are to be performed by the accord, the performance of part is not sufficient, but all ought to be performed."

In the third place, although the doctrine of consideration as thus applied to the discharge of contracts, allowed that an agreement to discharge an executory contract was good, because the promise of the one party to discharge was consideration for the promise of the other; the same reasoning made it necessary to deny the validity of a mere agreement to discharge, if it was made by a person who had fulfilled his duty under the contract. There could be no consideration for such an agreement, unless the party to be discharged had given some consideration for the promise to discharge him. In the days when a wholly executory contract was unknown, it is clear that this consideration for a promise to discharge must have been executed; for, as we have seen, neither debt, nor, in its earlier days, assumpist, lay, unless the party suing had performed his part of the agreement. Therefore the rule was laid down many times in the Middle Ages, and repeated in the sixteenth century, that it was only an accord _and satisfaction_ which would discharge a contract, or any other obligation, to which the party making the accord was already liable.6 The $,$ule and its

## 8 Discharge

reasons are clearly stated in the following passage in the Doctor and Student : '_Doctor_. And if $z$ man promise to give another **x**l\*\*_i_ in recompence for such a trespass that he hath done him, lyeth an action there ? Student. I suppose may, and the cause is for that such promises be no perfect contracts ; for a contract is properly where a man for his money shall have by assent of the other partie certain goods or some other profit at the time of the contract or after : but if the thing be promised for a cause that is past by way of recompence, then it is rather an accord than a contract. But then the law is that upon such accord the thing that is promised in recompence must be paid, or delivered in hand, for upon an accord there lyeth no action." It followed that, if a sum of money was due under a contract, an agreement to pay a lesser sum followed by payment would be no accord and satisfaction, because a payment of a lesser sum, when a larger sum was due, was, as we have seen,2 no consideration. It was only if the agreement was to do something else in satisfaction, and that something was performed, that there was an accord and satisfaction which would discharge the contract ; and these principles are still part of the law.3

Footnote 1: Bk. II. c. 24.

Footnote 2: Ahson, Contracts (rzth ed.) 346.

Footnote 3: Street, op. cit. ii 91-92.

Footnote 4: T. Raym, 450.

So long as only those contracts were actionable which were based on a executed consideration, these rules were a logical application of the doctrines of quid pro quo, and of consideration as then accepted, to the discharge of contracts. But we have seen that, at the end of the sixteenth century, wholly executory contracts became actionable ; and that in that case the promise of the one party was accepted as being the consideration for the counter-promise by the other.4 Logically this extension of the doctrine of consideration should have affected the law as to accord and satisfaction. If a promise for a promise is a good consideration for making a contract, a promise to pay or do anything should be a sufficient consideration for a promise to discharge.5 This view seems to have been taken in 1602 in the case of _Goring v. Goring ;6_ and it was specifically approved in 1681 in the case of \_Case v. Barber.\_7 "'Of late," it was said in argument, " it hath been held that upon mutual promises an action lies, and consequently there being equal remedy on both sides ar accord may be pleaded without execution as well as an arbitrarment, and by the same reason that an arbitrarment is a good plea without performance."8 "'To which the court agreed ; for the reason of the law being changed,

## 84 Contract and Quasi-Contract

the law is thereby changed ; and enciently remedy was not given for mutual promises, which is now given." This is accepted as good law by Comyns ;1 but how far it represents modern law is perhaps a little uncertain.

Footnote 1: Digest, _Accord_ B **4**, cited above 2:2-23.

There are undoubtedly a large number of cases which lay it down in uncompromising terms that it is only an accord and satisfaction which will discharge a contract.2 This is due to several causes. To a large extent it is due, as Mr. Street has pointed out,3 to the fact that, as such agreements generally embody concessions to debtors, they are generally made with a view to performance, and not to the obtaining of a counter-promise from the debtor, which may very likely only led to fresh litigation. But it is also due to two other causes of a technical kind. In the first place, it is due to the weight of authority which came from a time before the enforceability of wholly executory contracts was recognized. The rule that an accord without satisfaction was no discharge had hardened into a fixed rule of law ; its basis in a rudimentary stage of the history of consideration was forgotten ; and the judges therefore failed to adapt it to the new developments of that doctrine.4 In the second place, it was due to the great obscurity which long hung, and still to some extent hangs, about the law as to the status of promises to do what the pronisor is already bound to do.5 But if it is admitted that a promise by A to B to perform his contractual duty to C is a valid consideration for a counter-promise by B to A, it is difficult to see why a promise by A, who is liable to B, under his contract with him, tc do something for B, should not be a good consideration for a prcmise by B to discharge A. And, though payment of a lesser sum when a larger sum is due is certainly not a discharge,6 it may well be that a promise to pay a lesser sum may be a valid consideration for a promise of discharge.7

## 83 Discharge

Whether this is so or not is not yet settled. But there is a little authority in favour of this view ; 1 and it is to some extent supported, firstly, by some of the not very satisfactory reasons given for upholding the validity of a composition with creditors; 2 and, secondly, by the rule that the gift of a negotiable instrument for a lesser sum than an existing debt is a good consideration for a promise to discharge that debt,3 for a negotiable instrument embodies a promise to pay, to which peculiar incidents are annexed by the law merchant.4

Footnote 1: Last note.

Footnote 2: See Good v. Cheesman (f83r) 2 B. and 4d, at p. 335, where Parke, J., cites the passage from Comyns's Digest _Accord_ B4 (above 22-23). As Ames says, Lectures on Legal History 334-335, most of the reasons given to reconcile this decision with the rule that payment of part of a debt is no consideration for a discharge are futile; really there are two contracts in such a composition: (r) between the debtor and his creditors, the debtor promising to hand over certain property, and the credit-rs promising to release him when the property is handed over to a trustee (for them; and (r) between the creditors, each promising only to exact a quota of his debt in consideration of the others promising to do the like ; it seems to me that the only way in which the validity of the first of these contracts can be upheld is by saying that the debtor's new promise is something different from his existing obligation to each creditor.

Footnote 3: Goddard v. O'Brien (r83a) 9 Q.B.D. 37.

Footnote 4: For the history of negotiable instruments see below ii3 seqq.

Footnote 5: See generally Ames, Lectures on Legal History zg8 seqq; 'Street, op. cit., ii 12z seqq.

Footnote 6: Y.B. ii Hy, VI, Pasch, pl. 3o (p. 38); Ames, op. cit. 29S-299; I have cited the translation given by Ames.

(iii) \_The novation.\_5

Footnote 5: See Good v. Cheesman (f83r) 2 B. and 4d, at p. 335, where Parke, J., cites the passage from Comyns's Digest _Accord_ B4 (above 22-23). As Ames says, Lectures on Legal History 334-335, most of the reasons given to reconcile this decision with the rule that payment of part of a debt is no consideration for a discharge are futile; really there are two contracts in such a composition: (r) between the debtor and his creditors, the debtor promising to hand over certain property, and the credit-rs promising to release him when the property is handed over to a truste (for them; and (r) between the creditors, each promising only to exact a quota of his debt in consideration of the others promising to do the like ; it seems to me that the only way in which the validity of the first of these contracts can be upheld is by saying that the debtor's new promise is something different from his existing obligation to each creditor.

The name novation is Roman; but the institution, as recognized by the common law, is, as Ames has said, of English growth. The Roman novation in Justinian's time was effected through the stipulation; but the common law never recognized a contract of this kind; and therefore the English novation was evolved without reference to it, when the development of the English contract system had reached the stage at which this evolution was possible.

In the medieval period no such contract was possible. This is illustrated by a case of the year 1432,6 in which an unsuccessful attempt was made to induce the court to admit its validity. In that case Rolf argued in effect that, if B is indebted to C for $\\pounds 20$, and A is indebted to B for a like amount, and " A grants to C to pay C the $\\pounds 20$ which A owes, and that B shall be discharged of his debt to C, and C agrees to this, and B also, A shall now be charged to C for this debt by his contract and own act." But Cotesmore, J., and the whole court cenied this, " for although all three arc agreed that A shall pay this debt for B, still B is not discharged of his debt in any manner." This decision was inevitable in the then state of the law. As Ames has pointed out, B could be discharged of his liability to C only by release under seal, or by accord and satisfaction; while A could be made liable on

### 86 Contract and Quasi-Contract

his contract to pay C only by action of debt; and to an action of debt at the suit of C he could not be liable, because he had received no quid pro quo from C. "The two essential features of a novation --namely the extinguishment of the original obligation, and the creation of a new one in its place--were therefore both wanting in the case supposed. In other words, novation by simple agreement of the parties was at that time a legal impossibility."1

Footnote 1: Ames, op. cit. 299.

When, however, it was recognized at the close of the sixteenth century, that an executory contract based on the mutual promises of the two parties was enforceable by assumpit, the legal impossibility began to disappear. In 1611, in the case of _Flexedlin v. Kozev_,2 A owed money to C, and B owed money to A. It was agreed by all three that B, to discharge his debt to A, should hand over certain goods of his own to C, and that C should take them in discharge of A's debt to C. B did not hand over the goods, but converted them to his own use. C thereupon brought trover against B; and it was held that he was entitled to recover. The court treated it as, in effect, similar to the case where one has promised to bail goods to another to the use of a third. Just as the third person had a right of action in such a case to redress the wrong done to him, so here, C had suffered a similar wrong for which he ought to have his action.3 This case, therefore, shows that by the somewhat roundabout method of an action of conversion effect could be given to a novation.

Footnote 2: " Notwithstanding the third person here to whom the goods ought to have been bailed had never the possession of them, yet this conversion and nonfeasance of that which he ought to have done, is a wrong and very prejudicial to C the third person. And for this wrong and prejudice he may have his action upon the case. ... The whole court also clearly agreed in this--that this not bailing over, and delivery of the goods by B the first bailee unto C in satisfaction of the debt to A, and according to the agreement made between A and B, that this down clearly amrovan in favor to make a conversion. And that by this, he hath made himself subject and liable to an action to be brought by the party to whom he should have delivered the goods," ibid.

The case of _Roe v. Haugh_ (1697)4 marks a later stage in the history of the novation, and indicates the beginning of modern theory upon which such an arrangement rests. In that case B owed A _$42_. C, in consideration that A would accept him as his debtor for the _$42_ due from B, undertook to pay the _$42_ to A. C, having failed to pay, an action was brought against him; but, as the declaration had not alleged that A had promised to discharge B, no consideration for C's promise was apparent. On this ground three judges -- Blencowe and Powell, JJ., and Ward, C.B.--thought that C was entitled to judgment; but four--Powys and Lechmere, BB., Nevil, J. and Treby, C.J.--held that, as a verdict had been found for the plaintiff, " they should do what they could to help it;

**DISCHARGE**

to which end they would not consider it only as a promise on the part of C, for as such it would not bind him, except B was discharged ; but they would construe it to be a mutual promise, viz., that C promised to A to pay the debt of B, and A on the other side promised to discharge B, so that though B be not actually discharged, yet if A sues him, he subjects himself to an action for the breach of the promise."1

Footnote 1: The author would like to thank the anonymous referee for his help.

The last sentence in this judgment shows that one step was still wanting to complete the efficacy of a novation. The contract between A and C could not be directly enforced by B, because he was a stranger to it. Therefore A, if he was prepared to expose himself to an action by C for the breach of his promise, could still sue B.2 The last stage was reached when it was recognized that the agreement between A and C operated to extinguish B's debt, so that A could no longer sue B. This was recognized in 1789 by Buller, J., who said, "'suppose A owes B \< 100, and B owes C \< 100, and it is agreed between them that A shall pay C the \< 100 ; B's debt is extinguished, and C may recover the sum against A."2 In other words, B, though he cannot sue on a contract made between A and C, can take advantage of the extinguishment of his obligation to C, which results from the contract between A and C.4 The various applications of this principle in the law of partnership and otherwise belong tc a later period in the history of the law.5

Footnote 1: The author would like to thank the anonymous referee for his help.

Footnote 2: The author would like to thank the anonymous referee for his help.

The manner in which the law upon these three topics--the invalidity, the enforcement, and the breach of contract--was being shaped during this period, illustrate the manner in which the English law of contract, as developed in and through the action of assumpsit, was being co-ordinated with other branches of the common law. It was being adapted to the established rules which regulated the status of such persons as married women and infants ; and, just as in the growth of the doctrine of consideration, we can trace the influence of older ideas which had originated in the action of debt, so in many of these branches of the law we can trace the influence of older ideas originating in doctrines, first applied to contracts under seal and more especially to bonds, and developed mainly in connection with the land law. But, as I have already pointed out, and as we can see from the history just related, the main lines of development were shaped by the conditions under which the various branches of the action of assumpsit lay. At the end of the seventeenth century these developments were in

### 88 Contract and Quasi-Contract

many cases as yet rudimentary. But, at that period, we can see the beginnings of another influence which, in the following period, will exercise a very powerful effect on the further developments of this branch of the law--the influence of mercantile custom. We shall see that the theory of contract, as developed in and through the action of assumpist, was sufficient to enable the common law to keep and develop that jurisdiction over commercial law which it had acquired at the close of this period.1 But before I deal with the beginnings of a body of law, which was destined to have so great an influence on the future development, not only of the law of contract, but also of many other branches of English law; I must say something of the latest development of the action of assumpsit, which resulted in the creation of our modern law of quasi-contract.

Footnote 1: Vol. i 558, 568-573 ; vol. v 140-148.

## 3 Quasi-Contract

We have seen that, during the mediaxval period, the actions of debt and account enabled the law to recognize and to give effect to rights arising from certain relations, which, at the present day, we should style quasi-contractual. Thus debt could be used to recover statutory penalties, forfeitures under byte-laws, amerements, and money ordered to be paid by the judgment of a court ; and either debt or account lay at the suit of a beneficiary to whose use money had been paid.2 Similarly, account lay when A handed over money to B to employ for his (A's) use, or when A's factor or bailiff had received money to his (A's) use ; and, at the end of the sistcenth century, it was held that if A, by reason of a mistake or in consequence of false or fraudulent representations made by B, had paid money to B, he could bring account against B.3 We have seen, too, that in the sixteenth century the spheres of debt and account had come to be almost concurrent ; and that therefore, when indebitatus assumpist had become almost concurrent with debt, it followed that indebitatus assumpist came to be almost concurrent with account.4

Footnote 3: Vol. iii 427.

These developments, therefore, opened the possibility of extending indebitatus assumpst to remedy many of those causes of action which were remediable, either by the actions of debt or account. It was in the latter part of the seventeenth century that this extension was made, and that it was used, firstly, to enforce certain of those statutory or customary duties which were enforceable by action of debt ; and, secondly, to remedy cases of unjust

## 8 Quasi-Contract

enrichment which were remediable by the actions of debt or account. The latter was the most fruitful line of development, and by its means the largest part of our present law of quasi-contract was constructed.

It would not however be true to say that the whole of our modern law of quasi-contract has grown up round this latest extension of indebitatus assumpsit. This action could never be brought for money due under a judgment;1 and certain duties imposed by law on carriers, innkeepers, and others were still enforceable, as they had been enforceable in the Middle Ages,2 by an action on the case.3 These cases and other similar causes of action which have arisen later,4 are on the border line between contract and tort, and should perhaps be classed as quasi-torts, if the common law had ever recognized such a category of obligations. But it never recognized such a category, because such breaches of duty could be sued on by a form of assumpsit ; and, though this form of assumpsit was, as we have seen, really delictual in character,5 the fact that it was a form of assumpsit led the lawyers to class these obligations as quasi-contracts. Parts therefore of our modern law of quasi-contract are based on the competence of the old action of debt, and parts on innominate actions on the case.

Footnote 1: Ames, Lectures on Legal History 160; cp. Bl. Comm. iii r58-159.

Footnote 2: Vol. iii 385-386, 448.

Footnote 3: Ames, op. cit. 161, and cases there cited; Street, op. cit, ii 236-237.

Footnote 4: See Street, op. cit, ii 237-238; as he points out the agent's implied warranty of authority recognized in Collen v. Wright (185); SS E. and B. G47 is a late illustration of this principle.

In this section I propose to sa; something of the growth of that part of the law of quasi-contract which is derived from the extension of indebitatus assumpsit to this new sphere of liability. I shall divide the subject according to the two main lines on which this extension proceeded: firstly, its extension to enforce certain legal duties formerly enforceable by action of debt; and, secondly, its extension to remedy cases of unjust enrichment. Lastly, I shall indicate the manner in which, by reason of these developments, the growth of the modern law was made possible.

(1) _The extension of indebitatus assumpsit to enforce certain legal duties formerly enforceable by action of debt._

We have seen that in \_Slade's Case_6 it was recognized that, from the existence of a debt, the law would imply a promise to pay it, which promise could be enforced by indebitatus assumpsit ;7 and that this decision naturally led to the recognition of contractual duties implied from the acts of the parties.8 1 he extension of the

## 90 Contract and Quasi-Contract

idea of contractual duty implied from the acts of the parties, tended to promote the recognition of duties which diverged more and more widely from the sphere of true contract. Thus, we have seen that it had come to be recognized that an infant could be made liable to pay a reasonable price for necessaries supplied to him by action of assumpsit on a quantum merit;1 and this liability could be enforced, though the infant was too young to be capable of consent.2 But as soon as the idea of consent which underlies assumpsit begins to be whittled away, it is obvious that there will be a tendency, on account of its procedural advantages, to use indebitatus assumpsit to enforce, not only those debts which arise from a contract express cr implied, but also those debts which are imposed by law.

Footnote 1: Above 52.

Footnote 2: As Mr. Street points out, op. cit. ii zo4, " insane and drunken persons are upon the same footing as infants in respect to their liability to compensate for necessitates. The law makes the contract for then, or at least imposes the legal duty on the particular facts of the case "; as he points out, loc. cit., the husband's liability to be sued by assumpsit for necessitates supplied to his wife, whom he has wrongfully deserted, rests on the same basis; as we have seen, vol. iii 530, it was in Manby v. Scott (1663) i Sid. zog that it was first recognized that this liability could be enforced in this way.

At the end of the seventeenth century the attempt to use indebitatus assumpsit in this way was made; and it was at first permitted by the courts almost without opposition. Thus in 1676, in the case of _The Mayor of London v. Gorry_,3 assumpsit was brought for money due by custom for scavage. " The jury found the duty to be due, but that no promise was expressly made: and whether _assumpsit_ lies for this money thus due by custom without express promise was the question: resolved it does." In 1679 this case was followed, and the company of Barber Surgeons of London was allowed to recover, by this form of action, a penalty imposed on a member for breach of a bye-law.4 In 1681 it was held in the Exchequer Chamber that a customary payment known as weighage could be recovered in this way;5 in 1689 6 the gentleman ushers were allowed to recover the customary fee due from a person who had been knighted; and in the same year the executrix of a lord of the manor was allowed to recover a fine set upon a copyholder by her testator.7

Footnote 3: In 1681, the author was informed to use the author

## 9 Quasi-Contract

objected to this extension on two grounds. In the first place, he saw that in principle there was a logical chasm between such cases as _Slade's Case_, where there was a duty imposed by the implied consent of the parties, and cases where the duty was imposed by law without the consent of the parties. This distinction was pointed out in Shower's argument in the case of the \_City of York v. Town.\_1 It was asserted to by Holt, who, in another case, said that " the notion of promises in law was a metaphysical notion, for the law makes no promise, but where there is a promise of the party."2 In the second place, he saw that to permit these penalties to be recovered by this form of action meant, firstly, allowing the plaintiff to state his case generally, so that the defendant was embarrassed in making his defence;3 and, secondly, leaving the whole question of liability to a jury, without giving the court power to pronounce on the reasonableness of the custom or bye-law.4 When Holt had made up his mind he was apt to express his opinion with vehemence. In the _City of York v. Town_, on a motion being made that the action might stay till the next term, he said " that it should stay till Doomsday with all his heart";5 and in another case he said, "away with your Indebitatus, 'tis but as a bargain and no Indebitatus lyeth."6 He tried also to win over the other judges to his opinion. Raymond notes7 that, a few days after the hearing of the _City of York v. Town_, "I met the Lord Chief Justice Treby visiting the Lord Chief Justice Holt at his house. And Holt repeated the said case to him, as a new attempt to extend the indebitatus \_z_ssumpsit, which had been too much encouraged already. And Treby, Chief Justice, seemed also to be of the same opinion with Holt."

Footnote 1: "How can there be any privity or asset implied when a fine is imposed on a man against his will,"(1700) 5 Mod. 444.

Footnote 2: Starke v. Cheseman (700) I. Ld. Raym. at p. 538.

Footnote 3: "An indebitatus assumption is laid generally, and the defendant can't tell how to make his defence, but debt is laid more particularly," Comb. 15I.

Footnote 4: "It is hard that customs, bye-laws, rights to impose fines, charters, and everything should be left to a jury," City of York v. Town (1700) 5 Mod. 414.

Footnote 5: $,$Ld. Raym. 502, 4 Amon. (769) Holt. 35. 7 I Ld. Raym. 502, 8 I. 261. 8 I. 261. 8 I. 262. 8 I. 263. 8 I. 264. 8 I. 265. 8 I. 266. 8 I. 267. 8 I. 268. 8 I. 269. 8 I. 260. 8 I. 261. 8 I. 262. 8 I. 263. 8 I. 264. 8 I. 265. 8 I. 266. 8 I. 267. 8 I. 268. 8 I. 269. 8 I. 260. 8 I. 261. 8 I. 262. 8 I. 263. 8 I. 264. 8 I. 265. 8 I. 266. 8 I. 267. 8 I. 268. 8 I. 269. 8 I. 260. 8 I. 261. 8 I. 262. 8 I. 263. 8 I. 264. 8 I. 265. 8 I. 266. 8 I. 267. 8 I. 268. 8 I. 269. 8 I. 260. 8 I. 261. 8 I. 262. 8 I. 263. 8 I. 264. 8 I. 265. 8 I. 266. 8 I. 267. 8 I. 268. 8 I. 269. 8 I. 260. 8 I. 261. 8 I. 262. 8 I. 263. 8 I. 264. 8 I. 265. 8 I. 266. 8 I. 267. 8 I. 268. 8 I. 269. 8 I. 260. 8 I. 261. 8 I. 262. 8 I. 263. 8 I. 264. 8 I. 265. 8 I. 266. 8 I. 267. 8 I. 268. 8 I. 269. 8 I. 261. 8 I. 268. 8 I. 269. 8 I. 260. 8 I. 261. 8 I. 262. 8 I. 263. 8 I. 264. 8 I. 265. 8 I. 266. 8 I. 267. 8 I. 268. 8 I. 269. 8 I. 260. 8 I. 261. 8 I. 262. 8 I. 263. 8 I. 264. 8 I. 265. 8 I.

Contract and Quasi-Contract

in the seventeenth century, that this further extension, though illogical if regarded from the point of view of the original theory on which the action was based, was inevitable. Even if Holt's views had prevailed, and the right to bring indebitatus assumpsit in these cases had been denied, many cases would have been left, in which the supposed agreement upon which it was brought was equally fictitious. That this was so we shall see if we look at the manner in which this form of action had been applied to remedy cases where one man had enriched himself unjustly at the expense of another.

(2) The extension of indebitatus assumpsit to remedy cases of unjust enrichment.

Ames has very truly said that "the most fruitful manifestations of the doctrine that one person shall not unjustly enrich himself at the expense of another, are, in early law, to be found in the action of account."1 It is because account and debt had become largely coterminous, that it was possible to extend indebitatus assumpsit to this new sphere. That this was so we shall see if we look at two sixteenth-century cases, which turned on the sphere of assumpsit, and compare them with the very different notions as to its sphere which were growing up in the seventeenth century.

Footnote 1: Lectures on Legal History, r63.

In 1573, in _Tottenham and Bedingfield's Case_,2 it was held that, where a defendant had carried off and sold certain title produce belonging to the plaintiff as person, account did not lie. The defendant, it was pointed out, was merely a wrongdoer. There was no privity between him and the plaintiff, as in the case where one had received another's money as bailiff or agent for him. He had assumed to take property \_z_s owner, and in such a case account was not a proper remedy.5 In 1595, in the case of _Howlet v. Osbourn_,4 it was held that assumpsit did not lie where A delivered \_z_to to the defendant to deliver to the plaintiff, and the defendant, after promising the plaintiff to pay it to him, failed to do so. But it is clear that both these were cases in which one man had been enriched at the expense of another; and, as we shall now see, the extensions made in the scope of indebitatus assumpsit during the seventeenth century, provided a remedy both for them and for other analogous cases.

Footnote 2: 3 Leo, 24.

Footnote 5: "The action both not lie, for her is not any privity; for wrongs are always done without privity. . As soon as the viruses were severed by the parishomers, there they were presently in the plaintiff, and therefore the defendant by taking of them was a wrongdoer, and no action of accepth against him," ibid _fer_ Manwood, J.

Footnote 4: Cro. Eliza 38o.

We can distinguish three main classes of cases :-(i) actions to recover money upon a total 'ailure of consideration; (ii) actions

## Quasi-Contract

to recover money paid to a person to whom it was not due; and (iii) actions to recover money from a person who had wrongfully taken it.

(i) By the beginning of the eighteenth century, it was well established that the action would lie to recover back money paid under a contract, where the consideration had wholly failed. In \_Brigg's Case_1 (1624) A promised to make a lease to B, and B paid A a large fine for the lease. Before the lease was made A was evicted from the land. It was held that B could sue by action on the case to recover damages for the loss of his bargain; and it should be noted that the court declined to prohibit the Council of Wales from hearing the case, because "coo case est mixt ove equity." Holt was willing to follow this case, and to rule that in such cases of total failure of consideration an action on the case could be brought; but he at first refused to allow that indebitatus assumpsit lay. He considered that the cause of action was in tort, and therefore remediable by an action in tort, and not by a form of action which seemed to imply that the liability was somehow contractual.2 Thus in 1696, in the case of _Dezwberg v. Chapman_,3 the defendant, representing falsely that he was a freeman of London, took the plaintiff's son as apprentice, and promised to make him a freeman of London. In consideration thereof the plaintiff paid him _$30_. The defendant could not fulfil this promise as he was not himself a freeman. Holt ruled that the plaintiff could not recover his _$30_ by indebitatus assumpsit, but that he must bring an action on the case;4 and in 1698 he gave a similar ruling.5 But a little later, in the case of _Holmes v. Hall_ (1705),9 he altered his opinion, though it would seem somewhat unwillingly.6 He there held that, where an executor had paid X a sum of money for the delivery up of certain writings belonging to his testator, and X then refused to deliver them up, the executor could recover the money so paid by indebitatus assumpsit. " Many such actions," he said, " have been maintained for earnsets in bargains when the bargainer would not perform, and for

## 94 Contract and Quasi-Contract

premiums for insurance when the ship etc. did not go the voyage."1

Footnote 1: Holt at p. 36.

(ii) In the course of the seventeenth century indebitatus assumpsit was allowed to be brought by A, when he had paid money to B which was not in fact due, under such circumstances that B had no right to retain it. In the earlier part of the century it was thought that in this case, as in the case of failure of consideration, the proper remedy was action on the case. Thus it was held in the case of _Cavendish v. Middleton_ (1629)2 that, where a vendor of goods, who had already been paid, exacted payment a second time, case lay to get back the amount thus wrongfully exacted. But it was held in 1657 that indebitatus assumpsit lay to get back money paid to X, who was afterwards proved to have had no right to receive it; 3 and in the latter part of the century the principle beame established, and was applied to a large number of different cases. Thus it was said in 1622 that, if money was paid to a stakeholder to abide the result of a wager, the winner could recover it from him by this action, as it was money received by the stakeholder to his use.4 Similarly, money could be recovered back which had been paid under a judgment which was void, because the court had no jurisdiction; 5 or money paid by mistake, fraud, or extorted by dures.6 But money paid under a contract void for illegality could not be recovered back if the plaintiff was particeps crimins.7 It would seem that Holt was averse to some of these extensions of the action; 8 but it is clear from the cases decided in his time and later that his opposition did not stop the development of this principle.

(iii) As early as 1573 Harper, J., had, in his dissenting judgment in _Tottenham and Bedingfeld's Case_,9 expressed the

## 6 Quasi-Contract

opinion that a wrongdoer might be made liable in account, by charging him with taking the property as the rightful owner's agent.1 This view prevailed in the latter half of the seventeenth century ; and it was held that incebitatus assumpsit could be brought by A against B, where B had taken or acquired money or other property which in fact belonged to A. Thus in 1676, in the case of _Woodward v. Aston_,2 indebittus assumpsit was brought by the joint holder of an office against his fellow who had taken all the profits, and no one objected to the form of the action ; and when, in the following year, this objection was made in a case of a similar kind, the objection was over-ruled.3 In 1678, in the case of _Hovward v. Wood_, the court, though it doubted the correctness of these decisions, declined to over-rule them, as it considered that the law was too well settled.4 Holt, at first reluctantly, acquiesced in them.5 But in 1706, in the case of _Lamine v. Dorrell_,6 he applied the principle to the case where an administrator, acting under a grant of administration which was afterwards revoked, had sold debentures belonging to the deceased. He held that the rightful administrator could waive the conversion, and sue in indebitatus assumpsit for their value, as for money received to his use. In his judgment he recalled the great doubts which eminent lawyers had had as to the application of indebitatus assumpsit to these cases.7 But he made it quite plain that these controversies were then settled. "If two men reckon together, and one over pays the other, the proper remedy in that case is a special action for the money over paid, or an account ; and yet in that case you constantly bring an indebitatus assumpsit for money had and received to the plaintiff's use. So the defendant in this case, pretending to receive the money the debentures were sold for in the right of the intestine, why should he not be answerable for it to the intestine's administrator."8 And, at a later day, he said " that he could not see how it differe from an indebitatus assumpsit for the profits of an office by a rightful officer against a wrongful,

## 96 Contract and Quasi-Contract

as money had and received by the wrongful officer to the use of the rightful." 1

Footnote 1: The author is grateful to the anonymous referee for his comments on the manuscript.

- _The beginnings of the modern lazv._ It is clear from these cases that, though in an indebitatus assumpsit a promise to pay was supposed to have been made, the promise was very much of a fiction. It is clear, therefore, that Holt's objections on this score to allowing the action for breaches of bye-laws and customary duties could hardly be sustained. The action had come to be regarded as the proper remedy for a mass of miscellaneous duties imposed by law. But what was the principle upon which these duties were thus enforced? The form of the action implied that they were enforced because the party liable had agreed to pay. But that was notoriously false, Blackstone, it is true, by the help of the original contract, tried to give some colour to this fiction.2 A person was liable to be sued in debt on a judgment or a penal statute, or in indebitatus assumpsit on a bye-law, because of " an implied original contract to submit to the rules of the community whereof we are members."3 In other cases an agreement was implied "from natural reason and the just construction of the law."4 For instance, it is on this ground that we are liable to pay for work done at our request, or to pay over money received to another's use, or to remunerate a person who has spent his own money for our benefit at our request, or to pay what is due on an account stated, or to show adequate skill in any office or employment. It is clear that Blackstone, in thus endeavouring to give colour to this fiction of agreement, hopelessly mixed up cases where there is a real but an implied contract, with cases where there is no real contract, but merely an obligation implied by law--in other words, a quasi-contract. But the fact that Blackstone could seriously put forward such a theory, both illustrates the somewhat haphazard way "in which these various duties had come to be enforced, either by the actions of debt or account, or by successive expansions of various forms of assumpsit, and shows that, owing to this haphazard development, the law had not attained a coherent theory of quasi-contract.

It was easy enough to see that in many of these cases the obligation, being imposed by law, had nothing contractual about it. It was obvious, for instance, that the obligation to make a customary payment, or to pay a penalty for the breach of a bye-law, was simply imposed by law; and the same fact was equally

## 6 Quasi-Contract

obvious in many of these cases in which the law imposed an obligation to pay, in order to remedy an unjust enrichment. But these cases were numerous and varied, and the principle which underlay them badly needed to be stated. Here Lord Mansfield had his chance. He was not faced by a coherent body of principles like the doctrine of consideration,1 or the rules as to disseisin,2 or the rule in _Shelley's Case_.3 He found an incoherent set of rules stated in a number of heterogeneous cases; and if there was any one principle at their back, it was the innate feeling of the judges that it was just anc equitable that a convenient remedy should be given in these cases. This was a situation with which he was eminently qualified to deal. In the passage in his judgment in _Moses v. Macfarlan_,1 in which he laid down the conditions under which an action would lie for these cases of unjust enrichment, he summed up and thereby gave precision to the principle underlying the earlier cases. The actual decision in that case is erroneous; 5 but the principles there laid down are the starting point of the modern development of what is the largest and most important part of the law of quasi-contract; and their acceptance has done much to liberalize the common law. " This kind of equitable action," he said,6 " to recover back money which ought not in justice to be kept, is very beneficial, and there?ore much encouraged. It lies only for money which, _ex aequo et bono_, the defendant ought to refund: it does not lie for money paid by the plaintiff, which is claimed of him as payable in point of honour and honesty, although it could not have been recovered from him in any course of law; as in payment of a debt barred by the statute of Limitations, or contracted during his infancy, or to the extent of principal and legal interest upon an usurious contract, or for money fairly lost at play: because in all these cases the defendant may retain it with a safe conscience, though by positive law, he was barred from recovering. But it lies for money paid by mistake; cr upon a consideration which happens to fail; or for money got through imposition (express or implied); or extortion; or oppression; or an undue advantage taken of the plaintiff's situation, contrary to laws made for the protection of persons under those circumstances. In one word, the gist of this kind of action is, that the defendant, upon the circumstances of the case, is obligec by the ties of natural justice and equity to refund the money."

Footnote 1: Above 29-30.

Footnote 2: ${}^{\\rm a}$ Vol. vii 44.

Footnote 3: ${}^{\\rm a}$ Vol. iii 109-110.

Footnote 4: ${}^{\\rm a}$ (176o) 2 Burr. 1005.

It was thus in the action of indebitatus assumpsit that the larger part of our modern law of quasi-contract has originated.

Contract and Quasi-Contract

But, as we have seen,1 there we're also a certain number of quasi-contractual obligations which had never come within its sphere. On a judgment only debt could be brought; and there were a certain number of obligations still only remediable by actions on the case. It is not till forms of action are things of the past, that the products of these various parallel developments will be able to be grouped together into a uniform law of quasi-contract. It is not till these procedural changes have taken place that the fiction of a promise, and with it the confusion between implied contracts and contracts implied in law, will be got rid of, and the law of quasi-contract will be able to emerge as a distinct branch of the law.

We must now turn to that field of mercantile law in which this new law of contract will necessarily play the most important part, in which it will be developed in many different directions, and in which, as the result of these developments, many kinds of particular contracts, each governed by their own peculiar rules, will grow up.

1 Above 8g.

## Chapter 1 The Law merchant

LHAVE already said something of the manner in which England had, during this period, become a commercial nation. We have seen that, since the new commercial needs of the modern English state were similar to the commercial needs of the great medieval trading centres of Italy and South Western Europe, the commercial mechanism which had been there developed spread, first to the commercial cities of the Netherlands, and later to England ; and that the legal doctrines, devised by the mediaval canonists and civilians to give expression to the forms and working of this commercial mechanism, and to solve the problems to which it gave rise, were necessarily received, together with the commercial mechanism, to which they owed their origin and development. We have seen, therefore, that these doctrines formed the basis of those new rules of the Law Merchant which were making their appearance in England at the beginning of the sixteenth century ; and that, though they were necessarily modified by their contact with the rules of English law, they are the foundation upon which modern mercantile law rests both in England and elsewhere.1 In this chapter we must consider the origins and the English development of some of the principal doctrines of the Law Merchant. I shall deal, in the first place, with certain doctrines of commercial law, secondly with certain doctrines of maritime law, and, thirdly, with a topic which has close relations with both commercial and maritime law--the topic of insurance.

Footnote 1: Vol. v 60-154,

### The law merchant

I shall therefore begin the history of this branch of the law with a short account of the medieva. attitude towards usury, the gradual modification of that attitude brought about by the usury laws, its total rejection in the nineteenth century, and its partial restoration in the present century.

Usury having been permitted under conditions, the modern mechanism of exchange could be freely and rapidly developed; for much of that mechanism depends, to borrow a phrase from Bageho; upon " the diffused habit of lending things." 1 Thus we get the rise and development of negotiable instruments and banking, the formation of all kinds of commercial societies, and some signs of the future development of the modern law of agency. With these topics I shall deal under the four following heads. At the same time, and as a result of these developments, it became necessary to make provision for cases where merchants, either from their fault or their misfortune, were unable to meet the liabilities which the new mechanism of commerce had enabled them to incur. Thus we get the beginnings of the law of bankruptcy, with which this part of this chapter will conclude.

Footnote 1: Economic Studies (Silver Library Ed.) 218.

## 1. Usury and the Usury Laws

At no time can the state be wholly indifferent to the use which the owners of property make of their property. More especially must it interest itself in the actions of those who, having a sum of ready money at their disposal, seek, without risk to themselves, to exploit the needs of poorer or less fortunate men, and to exact from them a reward for the loan of this money. Thus, at all times, the relations of the lenders of money on onerous terms to those in need of pecuniary assistance, require to be watched carefully, lest the processes of the law be used for the purposes of the most grievous oppression. In this country a very short experience of the consequences of allowing lenders and borrowers to make what bargains they please has been sufficient to demonstrate this fact;2 and this century has seen the state resume a control, which it had abandoned under the influence of the a priori theories of Bentham,

## 5 USURY AND THE USUARY IAWS 101

and of the pseudo-scientific laws of the school of _Iasises faire_ economists \[1\]. In this, as in other cases, these so-called laws placed obstacles in the way of necessary legislative changes, some time after the purely temporary political and economic conditions, from which they were deduced, had ceased to exist \[2\].

We have seen that in the Middle Ages the state, and the different communities through which the power of the state was exercised, considered that they were very much interested in seeing that property was used in accordance with the current notions of morality and justice \[3\]. And it is clear that when trade was in its infancy, when, therefore, there was little opportunity for profitable investment, the relation of leader and borrowed must be very strictly supervised. For, in such a state of society, borrowers of money were more often than not either the extravagant or the needy. The money was borrowed, as Sir William Ashley says, not for productive but for consumptive expenditure \[4\]. There was therefore some justification, both for Aristotle's view that all interest was unlawful because money did not breed money, and for the literal acceptance of the Scriptural prohibitions of usury \[5\]. If we remember these facts, we shall not be surprised that the church and the canon law \[6\] condemned all lending of money as a sin ; that the civil law and the laws of the states of Western Europe endorsed and sanctioned this condemnation \[7\]; that all transactions were carefully sifted to see whether they were tainted with its presence ; and that the prohibition of usury thus became, as Brissaud has said, the keystone of the political economy of the Middle Ages \[8\].

From the earliest times the law of the English state was basedupon these ideas.1 Glanvil tells us that usury was both a $\\sin$ and a crime. In the usurer's lifetime he was dealt with by the ecclesiastical courts as a sinner; but, if he died unrepentant, the king asserted a claim to his goods.1 This was also the law in Bracton's day;2 and it was restated in 1341. A statute passed in that year enacted that, " The king and his heirs should have the cognisance of the usurers dead; and that the Ordinaries of Holy Church have the cognisance of the usurers in life, as to them appertaineth, to make compulsion by the censuses of Holy Church for the $\\sin$, and to make restitution of the usuries taken against the laws of Holy Church.3

Footnote 1: The apocryphal laws of Edward the Confessor c. 37 (Lieberman, Die Gesetze der Angelsachsen i 668) treated usury as a crime--'si si aliqis inde probatus esset omnes possession sua's perderet et pio ex lege habertur."

Footnote 2: Bk. vii 16--'' Usurarii vero omnes res, sive testatus sive intstatus decesserit, domini Regis sunt; vivas autem nos sole aliqis de crime insurea appellari nec convinci. ... Si quis aliqo tempor usurativis fuerit in vita sua, et super hoc in patria public defamatsu; si tamen a delicto joso ante mortem suam desitreit et penentiatim ejerit, p:st mortem ipisis ille vel res ejus lege usurarii minime censebuntur ''''; cp. Dialogus de Scaccario, Stubbs, Sel. Ch. (6th ed.) 229.

Footnote 3: At ff. 116b, 1177.

Footnote 4: Higher Albus (R.S.) iii 142, 143; for the French text see ibid i 267, 268.

Footnote 5: Ibid ii 167-163; i 399-401.

Footnote 6: Ibid ii 167-163; i 399-401.

Footnote 7: Whereas the same Ordinance (that of r3$\\delta$3) is too obscure and it is not comprised or declared therein in especial what is usury or unlawful chevisance," ibid iii 162.

As we might expect, the temptation to fall into this $\\sin$ was felt most keenly in the great commercial towns. In 1363 the city of London, encouraged thereto by the king,6 issued an ordinance against it;7 and in 1391 further provisions were made.8 The object of the latter provisions was to declare more precisely what kinds of contract were usurious;9 and it was further enacted that brokers, through whom such bargains were usually negotiated, should be obliged to take an oath, and to give $\\pounds$100 as a security, that they would not meddle in any usurious transactions.10 The case of Ralph Cornwaille, which occurred in 1377, shows that this legislation was no dead letter;11 and, that it was in accordance with the public opinion of the day, is clear from the fact that in 1376 the Commons petitionel that the ordinances against usury made by the city of London should be enforced in all other towns.12 As late as 1487 the legislature passed two statutes on the lines of these ordinances . The first made all "chargayns groundyrt in usurye" void, and subjected those who made them to a penalty of $\\pounds$100, in addition to any punishment which might be inflicted by

## 5 USURY AND THE USUARY IAWS 103

the ecclesiastcal courts \[1\]. The second inflicted penalties on brokers who made these usurious contracts \[2\].

At the latter part of the fifteenth and in the sixteenth centuries economic conditions were changing \[3\]. The growth of trade was making it clear that traders could make a productive use of borrowed money, and that therefore a payment for the use of borrowed money might be advantageous both to the parties to the contract and to the state. The result was, not the repeal of the general prohibition of usury, but the growth of a large number of rules, which were designed to distinguish between those payments for the use of money which were usurious and illegal, from those which were permissible.

The basis of these rules was the distinction drawn, as early as the first half of the thirteenth century, between a mere payment for the use of money, and a payment made to compensate the lender for some loss actually occasioned by non-payment (_dammun Emergens_), or for failure to realize some expected gain in consequence of his not having the money in hand (_lucrum essans_) \[4\]. A payment on account of _dammun Emergens_ was recognized as valid by Aquinas \[5\]; and, as the opportunities for profitable investment increased, a payment on account of _lucrum essans_ gradually came to be regarded as lawful. Sir William Ashley says that in the fifteenth century its legality was generally accepted by the best theologians \[6\]. But it should be noted that the loss must actually be proved \[7\]; and it was necessary that, in the first instance, the loan should have been gratuitous. Technically, the payment was made, not for the loan, but for non-payment of a gratuitous loan at the date promised \[8\]. Gradually, however, in the case of traders, the loss came to be presumed \[9\]; and, with the shortening of the period of the gratuitous loan, the making of it gratuitously for a short period came to be a mere formality \[9\]. But this development did not take place till after the close of the medieval period \[10\];

### The Law Merchant

and, by that time, the application of the strict medieval principle had been weakened by the manner in which this idea of compensation for loss had been applied to render legal many kinds of commercial contracts.

One of the commonest of the medieval commercial contracts was the _Commonata_--a form of societas, and the direct ancestor of those limited partnerships of continental law which have lately been introduced into this country.1 A, a merchant, stays at home, and entrusts goods or money to another that he may trade with them in foreign lands, in return for a share of the profits resulting from this trade; or, A, the travelling merchant, borrows capital from the merchant at home, that he may trade with it, in return for a share of the profits.2 In these cases the risk run by the lender entitled him to a payment for the use of his capital. The London ordinance of 1391 makes it quite clear that such lending for gain, if accompanied by risk, was not punishable as usury.3 Exactly the same considerations applied to loans on bottomy. The lender risked the loss of his money if the ship did not arrive safely, and for this risk he was entitled to be paid.4 Insurance also could be similarly justified.5 In all these cases payment was made, not for the loan of money, but for the loss or risk of loss run by the lender. It was only if the lender contracted to receive payment for his money in any event that he fell under the ban of the law.

Footnote 1: Below 195-197.

Footnote 2: Ashley, op. cit. i Pt. II. 4+3-45; as Brissaud has said, op. cit. 14+26, " On ne preta plus, mais on associa."

Footnote 3: Liber Albus (R.S.) iii 6+-" If any person shall lend or put into the hands of any person gold or silver to receive gain thereby, or a promise for certain _without risk_, let such person have the punishment for unsurers."

Footnote 4: Below 261-263.

Footnote 5: Below 275-276; cp. Straccha, Dt Assecuratone, Introd. SS8 43, 44, Tractatus Universit juris vi Pt. I, p. 360b.

Footnote 6: Ashley, op. cit. i Pt. II. 4+0-447; see Scaccia, De Commercio et Camblis SS 3 Gloss, 3 no. 36.

Footnote 7: Ashley, op. cit. i Pt. II. 4+0-447; cp. Brissaud, op. cit. 14+27 n. 4.

A further step was made towards the weakening of the general principle when men began to reflect upon these various transactions which were thus held tc be lawful, and to extend them by inference and deduction. We see an illustration of this in the _curacacus crimes_ of the late fifteenth century, which distinguished theologians and canonists of the sixteenth century asserted to be legal.6 Sir William Ashley has very clearly described this contract; and I shall copy his description.7 " An ordinary contract of partnership sharing risk and profit was justifiable; so was also a contract of assurance. A man could enter into partnership with B; and he could insure himself with C against the loss of his capital; and he could insure himself with D against fluctuations in the rate of profit \[by the machinery of selling his uncertain

## 4 USURY AND THE USUARY LAWS 105

profit for a less but certain profit.1 If all this was morally justifiable, why should not A make the three contracts with the same man B? or, to put it in a different way, why should not A place a certain sum in the hands of B, agreeing to receive only a low rate of interest, in consideration of a promise on B's part (_a_) to restore the capital, and (_b_) to pay a particular rate of interest in any case, whether the gains were high, low, or even absent." It is clear, as Sir William Ashley says,2 that " under the forms of partnership, the contract had become nothing more nor less than a loan on interest; the essential element in partnership, participation in risk, had been contracted away."

Footnote 1: For the device of using the machinery of a sale to effect an insurance see below 277-278; the contract consisted, as Brissaud shows, of contracts of partnership, insurance, and sale.

Another device, whereby a landowner could in substance borrow money at interest, was the creation of a rent charge on his property;3 or, as we have seen, the grant of a lease by the borrower to the lender at a nominal rent.4 This was never accounted usury--possibly because the transaction was, in early times, regarded as the creation or conveyance of a _res_, and therefore quite distinct from a loan.5 It was only if the creditor, to whom land had been thus conveyed in mortgage, took the profits of the land and did not set them off against the debt, that the transaction was unsurious.6 In the latter part of the fifteenth century the nature of these transactions was more closely analysed. In substance they looked very like loans of money at interest.7 The landowner, or the shop-keeper, who created a redeemable rent charge on his property in return for a capital sum of money, in substance borrowed that capital sum at interest.8 But the church held that, so long as these charges were only created upon bona stabilia which produced an income, so long as the rent charge bore a reasonable relation to the capital sum paid for it, and so long as the debtor retained the right to redeem, the transactionwas lawful.1 It is perhaps possible that this last condition may have had some influence upon the growth of the doctrine as to re-demption which, in the sixteenth century, the Court of Chancery was beginning to make an essential part of all mortgage transactions.2

Footnote 1: Ashlley, op. cit. i Pt. II. 449-45; Bolow 179, 207-208.

If we look at these various methods by which in substance it had become possible to borrow money at interest; if we remember that many of the Italian stares borrowed money and contracted to pay interest on their loans;3 that in many of the Italian commercial towns litigants were prohibited from invoking the aid of the laws against usury;4 that the Franciscans had in some of these states established, with the approval of the church, _mones pietatis_, or funds from which loans were made to the needy in return for a low rate of interest5--we shall see that many inroads from many different sides had, at the close of the medieval period, been made on the general principle that all usury was sinful.

But the principle was still accepted. Usury was still denounced in the old terms; and those who wished to evade the law made use of various devices to cloak their real intentions.6 We shall see that when the legality of the contract of insurance was in doubt, recourse was had to the expedient of a sale and resale to cloak the real bargain;7 and that the machinery of the contract of exchange or cambium was largely used to effect the same object.8 We are reminded of the various expedients which

## 5 USURY AND THE USUARY LAWS 107

can be used at the present day to evade the laws which declare wagering contracts to be void. Such expedients are the best evidence of the existence of the general prohibition. But, it may be asked, why was it that this general prohibition was still maintained, seeing that the exceptions to, and the evasions of it, now covered so much ground? No doubt this was partly due to the authority of the church; but, as Sir William Ashley has pointed out, there was a substantial justification for this use of the church's authority. No doubt in the trading centres the modifications of the rule almost went to the length of repealing it; but the merchants were but a small fraction of the people who owned allegiance to and sought protection from the church. " By far the greater part of the population o: Western Europe continued to be engaged in the old unchanging pursuits of agriculture: a declaration that payment could be taken for the loan of money would have meant the delivering them into the hands of the spoiler. The church, caring for the masses of the people, for the weak and stupid, might think it well to maintain a prohibition which imposed no restriction on the activity of the traders in the towns, who were well enough off to take care of themselves. The original prohibition had really aimed at preventing the oppression of the weak by the economically strong. The gradual exemption from the prohibition of methods of employing money which did not involve oppression, instead of obscuring the original principle, may be said to have brought it out more clearly."1 That this was the point of view taken by the English legislator we can see from a statute of 1495,2 which replaced that passed in 1487. Its object was to distinguish between cases where a reward could lawfully be taken for a loan and cases where it could not. Thus it allows, " lawful penalties for the non-payment of money lent." It condemns the sale of goods and their repurchase for a less sum, only if the transaction was with a person " in necessity." It condemns a loan of money in return for the rents and profits of land, only if the lender incurred no 'adventure," or if he was to have the rents and profits of the land for a time certain.3

## 108 The Law Merchant

When this stage had been reached, it was inevitable that further developments should be made. Clearly all loans of money at interest could not be condemned. The methods employed to evade the penalties for usury were coming to be merely colourable devices. The maintenance of the law, which rendered these devices necessary, increased the lender's risk, and therefore the interest required by the borrower. The legislator was, as we have seen, coming to regard commercial dealings not so much from the point of view of their moral rectitude as from the point of view of their bearing upon the power of the state;1 and from this point of view it was clearly desirable, in the interests of commercial development, to encourage loans of capital by permitting interest to be taken.2 On the other hand, it was clear that to leave persons free to make what loans they pleased at any interest they pleased would lead to oppression. As Bacon said, " two things are to be reconciled : the one that the tooth of usurie be grinded, that it bite not too much ; the other that there be left open a means to invite moneyed men to lend to the merchants for the continuing and quickening of trade."3 The reconciliation of these two things " produced a controversy hardly less acute than that which accompanied the rise of machine industry in England two centuries later."4

Footnote 1: Vol. iv 3rS.

Footnote 2: Bacon says in his Essay on Usury that, " howsoever usury in some respects hinderet merchandising, yet in some other it advanceth it; for it is certain that the greatest part of trade is driven by young merchants upon borrowing at interest; so as if the usurer either call in or keep back his money, there will ensue presently a great stand of trade"; cp. Tawney, op. cit 43 seqq.

Footnote 3: Essay on Usury.

Footnote 4: Tawney, op. cit. ro5,

Footnote 5: L. and, P. ix in no, 725-"that an act may be made against usury which is cloaked by pretence of law."

In 1535 Thomas Cromwell contemplated drawing a statutory distinction between cases in which the expedients which enabled interest to be contracted for were used as a mere cloak for usury, and cases in which the parties were engaged in a bona fide commercial transaction.5 But the project came to nothing. Probably it was found to be impracticable. In 1545 a less logical but more workable solution was devised. A statute passed in that year 6 saved the face of the older doctrine by a condemnation of usury in the old terms, but at the same time recognized the new conditions by repealing all the former statutes, and by permitting persons to lend money at $\\varepsilon$ rate of interest not exceeding ten per cent without being liable for the penalties for usury.7 Any

## 5 USURY AND THE USURY LAWS 109

attempt to evade the act by sales and repurchases, or by mortgages in return for rents and profits, was punished by the forfeiture of treble the value of the property sold, or the profits contracted for ; and, in addition, fine and imprisonment. In I551-I5521 this statute was repealed--the Protestants were no more inclined to favour usury than the Catholics. It was declared that usury was utterly prohibited by the word of God, and the taking of any kind of interest was forbidden in the most comprehensive terms.

Footnote 1: 5, 6 Edward VI. c. 2o; Crowley, Information to Parliament (E.E.T,S.) 172-174, voices the prevailing conservative view; cp. Ashley, op. cit. i Pt. II. 465.

But in Elizabeth's reign other counsels prevailed. Protestant opinion had wavered. Though Luther had supported the general prohibition, Melanchthon had seen that traders must be allowed to borrow at a moderate rate of interest,9 and Calvin, though not perhaps prepared to go quite so far as Melanchthon, admitted that there might be circumstances in which the taking of interest was lawful.3 Among both Protestants and Catholics, "the moral distinction was tending more and more to become one between excessive demand and moderate demand, rather than between gratuitous and non-gratuitous loan."4 In I5715 a statute was passed repealing the statute of Edward VI., and reviving that of Henry VIII. Usury was still branded as a detestable sin punishable in the ecclesiastical courts; and in the temporal courts it was declared to be an offence which rendered those guilty of it liable to the penalties of a premunire. But it was provided that no one should be liable to these punishments if the rate of interest did not exceed ten per cent.6 On the other hand, though a person who took less than ten per cent was not liable to these punishments,

### The law merchant

he was liable to forfeit the interest if proceedings were taken to recover it.1 This clause in the Act seems to have been a dead letter ;2 and it was not repeated in the Act of 1623, which lowered the rate of interest to eight per cent.3

Footnote 1: I3 Elizabeth c, 8 SS 4; cp, Tawney, op, cit. 160-161. 2 Ibid 165-166.

Footnote 3: 2r James I, c, 17; reduced to six per cent by 12 Charles II. c, I3. Bacon in his essay on usury had advocated a reduction, and the measure was approved by Malynes, Lex Mercatoria 231-232.

Footnote 4: Op. cit. 2a8.

It was far from being a logical rule--"you may perceive," said Malynes,4"what laws and prohibitions are made against usury ; and nevertheless the practice of it is most usual in many kingdoms and commonweals, and the laws are also made accordingly" ; and it was naturally distasteful to the rigid moralists. Their views found expression in the treatise on usury, written in i569 by Dr. Wilson, Master of Requests,6 and first published in i572.6 "At the last," he says,7" you come to a rate, and woulde in any wise have ten or twelve upon the hundred eyther appointed or, tollerated. . But I am rot of your mynde, because God is against you and therefore 1 do abhorre all toleracion of usurie . . but rather 1 would wise that there were as straite laws to forbid usurie as there bee to forbid felony or murther." On the other hand, following the medieval distinction, he would allow a payment of interest for loss sustained as distinct from usury.8 That Wilson took the old-fashioned view is, I think, due to the fact that he was an Anglican, a canonist, and an ambassador. As an Anglican, he naturally magnified, as many Anglican writers magnified,9 the literal words of the Bible, and he was naturally inclined to oppose the more liberal opinions of Calvin. As a canonist, he was inclined to stress those texts of the canon law which were in harmony with the words of the Bible--they were the parts of the canon law which, being in harmony with Anglican teaching, the English church had received.10 As an ambassador, he approached the world of commerce from the standpoint of the diplomatist ; and English diplomatis have generally, from that day to this, been somewhat of amateurs in financial and commercial matters.

Footnote 4: For you must understande that usurie is oneley grew for the only benefite of lendyong for time. Whereas interest is demanded when I have susteyned lose through another man's cause," ibid f. I33; cp, to the same effect Malynes, op. cit. 2a8-229; and this was the original division between the words--interest is "that which is between or the difference between the creditor's present position and what it would have been had the bargain been fulfilled," Ashley, op. cit. 1 Pt, 11, 399.

Footnote 5: Or. cit. 2a8.

Footnote 6: For some account of Wilson see Tawney's edition of his book, i-15; for his speech against the Act see ibid 159.

Footnote 7: The Epistle to the Earl of Leiccter prefixed to the book is dated July 25th, r569, and the title page bears the date 1572; cp, Tawney, op, cit. 10.

Footnote 8: For you must understande that usurie is oneley grew for the only benefit of lendyong for time. Whereas interest is demanded when I have susteyned lose through another man's cause," ibid f. I33; cp, to the same effect Malynes, op. cit. 2a8-229; and this was the original division between the words--interest is "that which is between or the difference between the creditor's present position and what it would have been had the bargain been fulfilled," Ashley, op. cit. 1 Pt, 11, 399.

Footnote 9: Tawney, op, cit. 112-113, 116-117. 10 Vol. i 594.

The moral question continued to be much discussed by many

## 4 USURY AND THE USUARY LAWS 111

English 1 and continental writers in the seventeenth century.2 Some, including Malynes 3 and Marquardus,4 advocated the retention of the medieval idea, that in considering whether any given bargain to give or receive interest was lawful, regard should be paid to the condition of the borrower and the purpose of the loan. It would however have been difficult to give effect to this principle by direct legislation, and no attempt was made to give effect to it in this way. In fact, economic theory was tending to the view that in the case of the contract of loan, as in other cases, persons should be free to make what bargains they pleased5--"having for centuries," as Mr. Tawney says, " argued with little reason that interest was oppressive in all circumstances, within half a _century_ of Wilson's death they were to argue with even lessreason that it was oppressive in none."6 But in the sixteenth and early seventeenth centuries the medieval idea was to some extent recognized by the Council ;7 and later in the seventeenth century it found expression in the growth of the equitable control over bargains with persons under the pressure of necessity, or with heirs, reversioners, or others entitled to expectant interests in property.8

Footnote 1: Cunningham, op. cit. ii 156-r59.

Footnote 2: Ibid ; Ashley, op. cit. i Pt. 1453; cp. Marquardus, De Jure Mercatorum et Commeritorum (ed. 1662) ii 8, 32, 37, 46, 47, 53, 64; iv 4, 8, ro-Iz.

Footnote 3: Op. cit. p. 243--"As there are three sorts of dealing amongst men, that is Gift, Bargaining, and Lending ; so are there three sorts of men, the stark beggar, the poor household, and the rich merchant or gentleman. To the first you ought to give freely, not only to lend freely ; to the second you ought to lend either freely or mecifully, and not to feed upon him with excessive usury : but with the third you may deal straightly, and ask your own with gain especially when he gainted by your money ; using in all these a consecence with discretion."

Footnote 4: Op. cit. iv 4, 8, ro-Iz--"Usurarum autem probibitarum rursum duo sunt genera; unum car parte et ratione debitoris; alterius respectu creditoris. Respectu et ratione debitoris usuat sunt illicitate et prohibite, quarum exacta debitor gravitut et paulaum quasi consumuitur: hoc est quando debitor inops et pauerre ficus est, non ex deltico suo et prodigilater, sed fortune injuria. . A non pauperibus vero, qui propter indigtiam saum praasentem non inopian, sed vel lucrum alaimve instantem necessitator summit, usurae licite capitur. . Fireret enim alias debitor locupleitor cum crotitoris jactra. Respectu creditoris illicaie unsure tum sunt, quando debitor quidem pauper non est, sed creditor nihilominus plus justo interesse exigit, nomine sortis principalis non solutae."

- Vol. vi 356-360.
- Op. cit. Go; as is there said, doctrines designed to protect the peasant or craftsman were not applicable to clothiers, ironmasters, and other capitalists who could protect themselves; a modification was needed, for the same reason as, in our day, a modification of the equitable doctrine of clogging the equity of redemption was needed.
- Thus in 1600 one Clarke of King's L'mn was accused of extreme and unconsciousable dealing against Bellingam of Peterborough; certain persons were appointed to reduce Clarke to some compromise, and to make him restore to Bellingam his copynold; if he will not do so they were to certify the Council, Dasent xx 360; cp. Tawney, op. cit. IG2-165.
- The leading cases are Chesterfield v. Janssen (1750) I Atk. 339; Earl of Aylesford v. Morris (1573) L.R. 8 Ch. 484; on the whole subject see Bellot, Bargains with Money Lenders Chap. iv.

The law merchant

question show how rapidly public opinion had changed since 1571. "The House of Commons had debated anxiously, if unprofitably, under Elizabeth as to the correct interpretation of Scripture : in 1640 it is much more concerned with the danger of driving capital abroad."1 An Act of Anne 1 finally reduced the rate to 5 per cent ; and this and subsequent Acts excepted certain transactions from the operation of the law.3 Subject to these modifications and exceptions, the scheme of the Elizabeth statute, supplemented by the rules of equity, was the basis upon which the law rested down to the repeal of the usury laws in 1854,4 under the influence of Bentham and the economists,5 When, in 1900, the Legislature saw fit to resume some control over the operations of moneylenders, it directed the courts to apply these equitable doctrines as to harsh and unconsionable dealings, when they were considering the question whether a borrower was entitled to relief.6 By so doing it has again brought our modern law into touch with the policy which commended itself to the lawyers and statesmen of the sixteenth and seventeenth centuries, and with the elements of substantial truth and justice which underlay the medieval condemnation of usiry.

Footnote 1: Tawney, op. cit. 171. 2 r2 Anne st. 2 c. 16.

Footnote 3: For these acts see Bellot, op. cit. 44, 45.

Footnote 4: 17, 18 Victoria c. 90.

Footnote 5: Above 100-101.

Footnote 6: 63, 64 Victoria c. 5!--The court must be satisfied (SS I. I) that " the transaction is harsh and unconsionable, or is otherwise such that a court of equity would give relief."

The modification of the mediaval prohibition of usury, and the consequent growth of the law as to when usury was permissible and when it was not, show us that, in the sixteenth century, the organization of commerce and industry upon a capitalistic basis was an established fact. This new organization of industry was naturally the cause of great changes and developments in commercial law--indeed, it is the ultimate cause of the shape which it has assumed. Two of its most important consequences were the rise and growth of negotiable instruments and the institution of banking. At the present day negotiable instruments provide for the safety of capital, by affording means for obviating the risks attendant upon the physical transport or exchange of the precious metals ; and the bank provides, in the first place, a place where capital can be stored, and, in the second place, a convenient and safe mechanism by which this stored up capital can be used as and when required.7 Both in this way bear to cash payments some

## 2 Negotiable Instruments

When these instruments came to the notice of the English courts in the sixteenth century, they had already attained a development which enables us to see in germ the main features of the negotiability of our modern law. If, therefore, we would understand the nature of these instruments, which were then introduced to English lawyers, we must first examine their mediaval origins and continental development. It will then be possible to relate the history of their introduction into England and their development by the common law.

### Mediev.it Origins and Continental Development

Before I begin to discuss the question of the origins of these instruments, it will perhaps be useful to concentrate attention upon the object of our search, by recalling the characteristic features of negotiability in our modern law. They are three in number : (i) Negotiable instruments are transferable by delivery if made payable to bearer, or by indorsement and delivery if made payable toorder ; and the transferee to whom they have been thus delivered can sue upon them in his own name, (ii) Consideration is presumed. (iii) A transferee, who takes one of these instruments in good faith and for value, acquires a good title, even though his transferor had a defective title, or no title at all. Thus the questions which I must try to answer are, first, what were the germs from which instruments having these qualities were developed ; and, secondly, what were the technical processes by which this development took place ?

In order to solve these questions I must start by giving some account of certain documents, in which a person places himself under a liability to pay or perform something, either (_a_) to the creditor or to someone else nominated by the creditor and producing the document, or (_b_) to the nominee of the creditor producing the document, or (_c_) to the creditor or the producer of the document, or (_d_) to the producer of the document simply. These documents come from a very early period in the history of law, and were not necessarily confined to mercantile transactions. But, with the development of commerce, they necessarily came to be used most frequently in these transactions. However, in the sixteenth century, their commercial usefulness was almost entirely destroyed, because the lawyers, under the influence of the technical conceptions of the civil law, so construed them that they lost the negotiable characteristics which they had formerly possessed. The merchants were therefore obliged to evolve some other expedient. This expedient was found in the adaptation of another kind of instrument which, in the late thirteenth and early fourteenth centuries, had been invented for the purpose of effecting an exchange of money without incurring the risks of its physical transportation. This instrument was the Bill of Exchange. This new and essentially commercial document gradually attracted to itself some of the qualities which these oder documents had originally possessed ; and, as it was in connection with these bills of exchange that the characteristic features of the negotiability of our modern law obtained their final form and recognition, they naturally came to be regarded as the type and model of the negotiable instrument. Naturally this development led to a revival of the negotiable qualities of some of those older instruments which had lost their negotiable characteristics in the course of the sixteenth century. I shall therefore group my account of these developments under the two following heads : firstly, the early documents authorizing the debtor to pay the creditor or his nominee, or the creditor or the producer of the document ; and, secondly, the origin and development of the bill of exchange.

## Origins and development

1. _The early documents authorizing the debtor to pay the creditor or his nominee, or the creditor or the producer of the document._

Even in modern times the legal consequences of negotiability are exceptions to the ordinary rules of law. In ancient law anything approaching a negotiable instrument was legally impossible, for three reasons. Firstly, ancient systems of law do not allow one man to represent another in litigation before a tribunal. When this prohibition began to be relaxed, representation was at first an exceptional privilege, and the representative must be formally and solemnly appointed.1 Secondly, ancient systems of law do not allow a creditor to assign his right to another.2 That the relation of debtor and creditor was a strictly personal relation is obvious from the strictly personal character of the creditor's remedy--he could even imprison the debtor. Therefore it was only just that the creditor and the creditor alone should be able to enforce his claim.3 Thirdly, such a transfer even if otherwise permissible, was impossible, because there could be no transfer of anything without a physical delivery of possession; and how can the right to enforce the payment of a debt be physically transferred 24

Footnote 1: Brunner, Les Titres au porteur francais du moyen age, N.R.H., x 12-16; cp. vol. ii 315-317; Professor Wigmore has pointed out to me that Brunner's conclusions have been combated in an essay by Brandileone, published in 1903 by J. Vallardi, Milan, which is a reprint from vol. i of Rivista di di diritto commerciale e matrino; but that Brunner's views have been vindicated in a later essay by Mario Palazzo, La question dell' origine del titolo a portatore (1905, Torno, Tipografia Salesiana, Via Cottolango, 32) at pp. 54, 87, 175.

Footnote 2: Brunner, op. cit. 16-19; vol. vii 518, 52o-521; for the manner in which the influence of the civil and canon law'made for a modification of this rule, see below 117, 123.

Footnote 3: "I'as plus qu'on ne s'explique aujoud'hui un changement du debiteur sans

F'assentiment du creancier, pas plus on n'aturai compris autrefois la substitution d'un creancier a un auttre. Cela tenait encore a ce que les durs moyens de coercition dont les creanciers etaient armes, la contrainte par corps, par exemple, pouvaient etre manies de facon tres diverse, suivant Themat des persones qui avacient a les faire valoir," Brissaud, Hist du droit francais, ii 14; as Maraquardus, De Jure Mercatorum et Commercorum, says (ii 7, to) speaking of later law: "I' Nec emitim creditoris petitio ipso invito immutari au ipsi alus debtor obvudi, lice debitoris actio et chiorgraphum a creditor invito debiter alil ced possit, cum ejus non intreti sul solvat."

Footnote 4: Vol. ii 92 n. to; vol. vii 518; cp. Jenks, Essays, A.A.L.H., iii 65, 66.

Footnote 5: Brunner, op. cit., 31; Jenks, op. cit., 61, 62 ; many examples can be found in the Codex Cavensis, a collection of deceds from the archives of the Clunica monastery at La Cava near Salerno, and now published (see Jenks, op. cit. 60, 61); the other collection which illustrates this expedient will be found in vol. v of Memorie Documenti per servire all' istoria del Ducato de Lucca ; it contains a reprint of the cathedral documents from the seventh to the tenth centuries (Jenks, loc. cit.).

In Northern Italy many of these difficulties were circumvented by the Lombard lawyers of the eighth and ninth centuries. They resorted to two different sets of expedients. In the first place, they drew up documents in which the person liable promises performance not only to a specified creditor, but also to any one who produces the document as the creditor's nominee.6 Thus in 77 I a monk made over to a church the right to avshould be murdered, and the right was to be enforced, " per se vel per illum hominem cui ipse hanc cartulam dederit ad exigendum."1 Similarly it was provided that a performance should be made to a creditor, " vel cui istum breve in manu paruerit in vice nostra."2 In the second place, they drew up documents in which the person liable promises performance, sometimes to the creditor or the producer of the document, sometimes to the producer of the document simply.3 Thus, in the middle of the ninth century, a person promised, " tibi aut eidem homini qui hunc scriptum pro manibus abuerit,"4 or " mihi seu ad hominem illum apud quem brebem iste in manu paruerit ";5 and in the middle of the tenth century a person promised, " ad hominem apud quem lste scrlptus paruerit."6

Footnote 1: The author is grateful to the anonymous referee for his comments.

It should be noted that these clauses are to be found in many various kinds of documents. They are to be found in wills and conveyances as well as in documents which acknowledge indebtedness. Thus an example of the year 1036 is thus described by Professor Jenks :7 "A certain ' comes Petrus ' by his will left the guardianship of his wife and all belonging thereto to his _germani_ Malfred and John, or _itli viro aui scriptum in manu paruerit._ Thirty years later, a certain clerk Johr. appeared in court as guardian of the widow, and was accepted as such without a question on production of the document." But it is clear that they could be used in documents which acknowledged that the debtor owed money to a creditor, just as easily as in documents in which a testator or a settling conveys benefits to a named person. And that documents of this kind spread over Europe in the thirteenth century there is much evidence. Brunner has shown that both varieties were well known in France in this and the following centuries.8 In England they were known to Bracton under the name of _missibilia_.9 In the fair courts we meet with _soripta obligatoria_, which could be enforced sometimes by the certain attorney or the _nuncius_ of the creditor, sometimes by the producer of the document.10 In the Mayor's Court in London in 1304-1305 an action of detinue was brought for two bills of 15s. 1id., "which the plaintiff had bought from William Foundepe, merchant."11

Footnote 1: The author is grateful to the anonymous referee for his comments.

The effect given to these clauses helped to get over the three difficulties which prevented the recognition of anything like a negotiable instrument.

1. If a debtor had promised to pay the creditor or his attorney or _nuncius_, many of the difficulties attaching to the representation

## 117 Origins and Development

of a litigant before a tribunal disappeared. It is true that the title of the plaintiff to be the representative of the principal must be proved. It is true also that in these early days he must be formally appointed like any other representative. But the fact that the debtor had bound himself to pay to the creditor or his nominee prevented him from raising any obection to the appointment.1 In these cases, however, it is clear that the instrument can hardly be said to have had anything like a negotiable character. The nominee sued as the creditor's agent. Defences good against the principal were good against him.2 The death of the principal put an end to his authority ;3 and the representative could not delegate his powers to another representative.4 Probably the rights of the nominee were larger, he had a more independent position of his own, if the debtor had promised to pay any one nominated by the creditor, and the nominee sued, not as agent, but in his own name. As the debtor could not question his authority or his title to the instrument on which he sued, an instrument with the clause permitting the nominee to sue in his own name probably did possess certain negotiable characteristics.5 At any rate, we shall see that this was the case in the thirteenth and fourteenth centuries.6 But it was the instruments enforceable by the creditor or the producer, or by the producer simply, which possessed these negotiable characteristics in a far higher degree.

Footnote 1: Brunner, op. cit. 160, clearly explains the advantages of this ; when the right to represent another was restricted, the consent o'the defendant to be sued by the plaintiff's representative would get over the difficulty : "seulement ce consentement etaile probabement tres difficile a obtenir, lorsqu'llen'etait demande que dans le but de commencer le proces, car le defender aufait tout interet a ne pas faciliter la procedure au demande. Mais si le credeur s'etait assure d'avance le consentement du debieuer dans le contrat meme, si le delbeteur s'etait oblige par la reconnaissance de payer estuellement au mandataire ou procureur du creancier, le delbeteur poursuir en Justice ne poursuit es s'opposer a l'admission du repressantant du demandeur."

Footnote 2: Ibid r70.

Footnote 3: Ibid r69, r79; cp. cit. 174.

Footnote 4: Brunner, op. cit. 174.

Footnote 5: Ibid r69, r79; cp. Debray, These, De la clause a ordre \[t892\] 30-32--in some of the French provinces he was allowed to sue on his own account, though a stranger to the original contract; 1 Debray, op. cit. 31-32, points out that as late as r137 the custumal of Anjou and Maine stated that "Ndegaucu ne peut recovicior convenance pour autre si ce n'est pour son profitut ou si ce n'est de som communacement."

Footnote 6: Below r20 ; last note.

Footnote 7: Brunner, op. cit. 39, 40, citing Bouteiller, Somme Rurale.

Footnote 8: Ibid.

Footnote 9: Ibid 41.

Footnote 10: Ibid.

how he came by the document.1 Defences available against the original debtor were probably not available against him.2 He was in a sense a party to the contract because he is the producer of the instrument, and it was the producer that the debtor had contracted to pay. When he sues upon the instrument he is therefore asserting a right of his own,3 and can sue either personally or by agent.4 It follows that these instruments, and the rights conferred by them, could freely circulate from hand to hand.

Footnote 1: The author is grateful to the anonymous referee for his comments on the manuscript.

3. The third difficulty in the way of transferring a right to receive a debt--the difficulty that there can be no transfer without the physical delivery of some _rs_--was removed by the growth of the idea that there can be a symbolical transfer, by the delivery of the charter which witnesses the transfer.5 The Anglo-Saxon land book may have been used, not merely as the evidence of a conveyance, but as the conveyance itself;6 and though in later times the royal courts in England refused to allow this efficacy to a deed, abroad this method of conveyance was well recognized.7 It was certainly so recognized in L.cmbard law,8 and the influence of Roman law made for its extension.9 Now it is clear that this conception is capable of development; and it is the more possible to develop it in primitive systems of law, in which the lines between property and obligation, between conveyance and contract, are by no means clearly drawn. In this primitive period the charter which made a contract was regarded as the contract itself; and its _traditio_ clinched the bargain.10 Therefore any one into whose hands this charter came could present it to the debtor and demand its

## 11 Origins and Development

Enforcement, if the charter had so provided.1 Thus, by means of these charters, in which the debtor had promised to pay the creditor or producer, or the producer simpy, the property in a debt could be transferred with the writing from hand to hand.

Footnote 1: Brunner, op. cit. 150, 151, compares his position with that of the Salman : "Le porteur, simple mandataire, est regarde comme creaneer, le salmann, egalement simple mandataire, est regarde comme proprietaire. . Le poiteur, de meme que le salmann, n'agit pas, en ce qui concernte la forme, comme fonde de pouvoir du mandants, mais en vertu de son propre droit, le porteur comme creaneer fiduiciaire, le salmann comme proprietaire fiduiciaire "; for the Salman see vol. iii 563-564; vol. iv. 410-412.

In these ancient documents, therefore, we can see that methods had been devised for breaking down the archaic formalism of primitive law, which would otherwise have prevented the growth of anything like a negotiable instrument. But as yet these methods were crude and unformed. They must be developed by legal theory and commercial practice before the negotiable instruments of our modern law could be evolved from them. And legal theory, for a time, was hostile to their development. In many different places, and at many different times, the lawyers have been slow to learn that their technical rules must, in the long run, accommodate themselves to business needs--that commercial law exists primarily to settle mercantile disputes, and not to dictate to the merchants the modes in which they shall carry on their business. These instruments were absolutely necessary to commerce; and it was therefore inevitable that legal technicalities should, in the long run, yield to mercantile necessities. But the marks of the conflict can be plainly read in the law which resulted; and it is, therefore, not till this conflict has been fought cut and decided, that the modern incidents of the negotiable instrument appear. The first stages of this conflict can be read in the history of the development of these clauses in favour of the creditor's nominee, or of the producer of the document, which we have just been discussing.

\_The clauses in favour of the creditor's nominee.--\_We find in the Middle Ages many varieties of these clauses. They fall into two main classes. (i) There is the class in which the representative character of the nominee is not prominent, and (ii) there is the class in which it is clearly emphasized.2 And in both classes the clause is sometimes alternative, i.e. the promise is to pay to the creditor or his nominee; and sometimes simple, i.e. the promise is to pay to the nominee.3 Footnote 2: Brunner, op. cit. 169, 170.

Footnote 2: Ibid r62-169.

(i) Instances of clauses of the first class are promises to pay to you, the creditor, _vel Cai mandaveris_; or to pay _mandato tuo_, or _tibi vel mandato tuo_, or _tibi vel cento mandato_; or to pay to X or _a son command_, _son certain command_, _son command_, or _mandatement_; or to pay to X on a son command es letters portant\_;

### The Law Merchant

or to pay _ei quem miti ordinaveris_.1 It was this last formula--to pay to the order of--which was destined, as we shall see, to supersede the others.2

Footnote 1: The term _e.g._, is the term \_e.

## 12 Origins and Development

These clauses in favour of the creditor's nominee had become rare in the fifteenth century ; and in the sixteenth century they had disappeared.1 In the first place, the lawyers, under the influence of the technical conceptions of the civil law, ignored the older difference between these two classes of clauses, and laid it down that the creditor's nominee could sue only in the capacity of the creditor's agent.2 In the second place, the greater convenience of the clauses enabling the producer of the document to sue caused them to supersede these clauses in favour of the creditor's nominee.3 It was not till the seventeenth century that these clauses reappear, in the form of the clause to order of our modern law, in connection with an entirely different clase of instrument.4 But in order to understand the reasons for this new development we must know something of the history of the clauses in favour of the producer of these documents.

Footnote 1: The history of this process in France is worked out in great detail by Brunner, op. cit. 139-147,

_The clauses in favour of the producer of the document._--Just as from the clauses in favour of the creditor's nominee the clause to order of our modern law is ultimately derived, so from these clauses in favour of the producer of the document springs our modern clause to bearer. The position of the producer of one of these documents, in the thirteenth and fourteenth centuries, almost exactly corresponds to the position of the bearer of a negotiable instrument. I shall, therefore, for the future speak of him under his modern name of bearer.

We have seen that the bearer was allowed to sue upon the contract in his own right, because the debtor had contracted to pay the creditor or the bearer of the document, or the bearer of the document simply.5 This was his position in France, and probably in other countries also, till the end of the fourteenth century.6 But, at the end of the fourteenth century, we can see that the same body of doctrine which had destroyed the independent position of nominee of the creditor is beginning to affect the position of the bearer. As with the creditor's nominee so with the bearer, the lawyers were beginning to reduce him to the position of the agent of the creditor.7

Footnote 1: The history of this process in France is worked out in great detail by Brunner, op. cit. 139-147,

This change in the position of the bearer is due, as Brunner

### The law merchant

has pointed out,1 to the fundamental difference existing between the Germanic and the Roman procedure. As he says, " The Germanic procedure does not ask, What is the right of the plaintiff? Its point of view is the duty of defence, and the means of defence open to the defendant. The main question in these personal actions is the question whether the defendant is or is not bound to pay ; and his obligation to pay the bearer is the direct consequence of the form of his promise to pay." But in the procedure of the civil and canon law the point of view is the right of the plaintiff. The assertion of that right is the object of the action. Thus, " this system, in which the first question is always, Has the plaintiff a right of action? made it necessary for the French lawyers to find some explanation of the bearer's right of action. They found it necessary to discover some legal basis on which they could rest it." Probably this difficulty was especially keenly felt by the French lawyers, because the Renaissance school of jurists, which was especially influential in France, endeavoured to get back as far as possible to the classical texts.2 They therefore rejected many of those modifications of pure classical doctrine, which the influence of the okler customary law, and commercial convenience and practice, had caused the school of the glossators to accept. But the difficulty was not confined to the French lawyers. It was felt in Italy, and indeed in all countries in which Roman law was received, in proportion to the extent to which the doctrines of that law gained supremacy.3 The lawyers were at once learned in the classical texts of Justinian's Corpus Juris, and ignorant of the modern mechanism of commerce. They did not hesitate, therefore, to sacrifice commercial convenience on the shrine of legal orthodoxy--even suggesting that the merchants purposely adopted obscure forms in order that illegal transactions might pass unnoticed.4 On the other hand, the technical difficulty was not felt so keenly in Northern Europe,5 nor, as we shall see,

## 12 Origins and Development 123

in England. It is probable that in these places the older ideas lived on, and saved the lawyers te trouble of finding a new speculative basis, consonant with the doctrines of Roman law, upon which the peculiar characteristics of negotiable instruments could be based.

The difficulties felt by the lawyers of the sixteenth century were solved by another adaptation: the theory which had proved fatal to the usefulness of the clauses in favour of the creditor or his nominee.\[1\] The old French law had allowed that a stipulation in favour of another, in the form of a promise to pay the bearer, was valid.\[2\] But in Roman law such promises in favour of a third person were not valid ; and therefore the school of the commentators denied their validity.\[3\] Promises in this form were, however, comparatively rare. It was more usual in the Middle Ages for these promises to be drawn up in favour of the promisee or bearer.\[4\] These promises were valid because the promise was made to the other contracting party as well as to the bearer, and the bearer could be regarded as a person _solutioni adjectus_. But it followed that he had no original or independent right of action on the contract.\[5\] This solution was, after a period of controversy, adopted in France, and ousted the older customary law, which had allowed the bearer an original and independent right of action.\[6\]

mercatori: Hamburgensi faciendam, debitori suo Lubecensi novum creditorem constituure potest vice sua; rursumque fieri potest ut hule tertio. Hamburgensi novus quoque constituure creditor; quam delegatiemen stylus et observantia mercatorum vocat inductionen.\[1\] Above izi.

${}^{1}$ Debray, op. clt. 31-32, cltng the custural of Anjou and Maine; above izi.

${}^{2}$ S Brunner, op. cit. 140: " Bartolus, Balus et d'autres jurisconsultes font, dans les contrats qui ont pour objet beiennent a taire a un tiers, une distinction entre le _verbum obligarium seb obligations; promissitismis stipulations;_ d'un cote, et le _verbum executivum sea excutivansi_, d'autre cote. Si la stipulation taint concte dans ces termes : _promtilis iiiid dadbis ill? le corium obligationis_ portait sur le tiers et la stipulation etait regardee comme nulle. La stipulation portait-elle : _promtilis mih ut dadbis Title y le corium obligationis_ se raportrait au stipulant, le verbum executivum au tiers et le contrant quital value "; after a period of hesitation it would seem that in France a promise made to the bearer simply was treated as a promise to the promisee or bearer, ibid f60, 16f.

${}^{4}$ libid f48.

${}^{3}$Straccha, De Adjeto, Pt. iv 8, r (T:actatus Juris vi Pt. 1, 400): " Quero, octavo, solent mercatores se debitores constituure in hace verba: --Lucius Titius obligavit se Maevio ad mile exusa a recrum habitarum, solverque promisit calenelis Febariums eidem Maevio, seu ei qui chirographum exhibuerti, et (ut nisi dicun) a chi il presentara. Finge nado Semeriougnum habe chirographum, et exhibete, Num adjectus constituutus censeatur, seu magis jus agendi Sempronio competat? Questo hace et quotidian et utilis est valle, in qua prima frunte respondendum videatur aidem Sempronium constituum. ... unde sequitur hunc petitionen non habe" ; Scaccia, op. cit. 5 2, Gloss. 7. 41: "Etiam si adjectus haberet penses se scripturan, in qua stat adjectus, illamque in judicio producetera, quia ha ha ha ha ha ha a production non sunt apta ad acquendum obligationem, et consequent remaneret adjectus, qui nomine proprio non potest agree."

${}^{5}$ Brunner, op. cit. 139-147; Brissaud, op. cit. ii 143-1437The IAM MERCHANT

This development was assisted by the fact that even in the old customary law Roman phrases importing agency appeared. Payment was to be made to X or bearer or agent.1 Gradually more and more stress was laid upon these phrases. The bearer ceased to be described, as some of the older authorities describe him, as an agent of a very peculiar kind, in that his authority need not be proved and could not be revoked.2 He sank to the position of an ordinary agent. The result was that, whether he was regarded as a person _adjectus solutiomi_, or as an agent, he had no independent right of action. In order to sue he must prove,3 or it must be presumed,4 either that he has been appointed the agent of the creditor, or that the creditor has transferred to him his rights by making him a procurator _in rein suam_.5

Footnote 1: The author is grateful to the anonymous referee for his comments.

Footnote 2: Ibl 39-49.

Footnote 3: Scaccia, op. cit. SS 2, Gloss, 7. 41: "Intelligo tamen quod non potest \[_sc._ petere\] proprio nomine, secus autem nomine procuratorio."

Footnote 4: Stracchia, op. cit. Pt. iv 8. 8.10; admits that if a person produced an instrument authorizing payment to be made to the bearer, a presumption of agency might arise from the possession of the instrument, and that such person could use without being obliged to give the _eautio de ratio_; Scaccia, op. cit. SS 2, Gloss. 7. 55, agrees, though it appears (ibid 55-66) that the point was controverted; but he concludes, "quicoid possit dici in puncto juris non est recededatum ab extensione quia servatur in praxi "; for similar rules in France, sec Brunner, op. cit. 142-144; but this was only a presumption which could be rebuted, e.g. if it were proved that the creditor had forbidden the debtor to pay the bearer, ibid 144.

Footnote 5: Stracchia, op. cit. Pt. iv 17, 36 (Tractatus Juris vi Pt. I 404b): "Reliquum est ut illud non ignoremus et ipsi adjecto actionem competere quando constitutus esset adjectus in rem suam "; Brunner, op. cit. 146, 147, citing Dumoulin and Charondas de Caron; the latter, commenting on Bouteiller, Somme Rurale, says: "Ce qui'il dict ic du porteur de lettres _niht profici non potest_. ... faudroit pour agir en son nom net en exclure le principal crecancier qui'il cit cession ct transport de luy _ant usualatas actions_. _Et ainsi nous en usuos_."

Footnote 6: This maxim appears in both parts of a collection of Parisian judgments, customs, and maxims by Jean Desmares which comes from the latter halt of the fourteenth century, Brunner, op. cit. 49; it is quite contrary to the rules contained in the first part of that compilation, and other writers, z.g., Bouteiller, deny it, or explain it: "Elle n'a donc pas toujours ete en vigueur dans lc droit francais: elle doit, au contraire, son origine a l'application faite aux titres au porteur des principes du droit romain sur mandat," ibid 50.

The result was that the negotiable character of these instruments disappeared. If the bearer sued as agent his authority to sue must be proved, and it could be revoked. In any case it was revoked by the death of the creditor--"home mort n'a porteur de lettres." 7 If he sued as transferee an act of transfer must be proved --"un simple transport ne saisit point," i.e. the mere delivery of the instrument gives the bearer no right to sue for the debt ; and the transfer must be notified to the debtor.7 Before notification of

## 12 Origins and Development

The first two decades of the development of the thesis, the first one, and the second, theinstruments payable to bearer.1 Long before this, however, the development of the negotiable character of the bill of exchange had supplied the want created by the destruction of the negotiable character of these older documents.

Footnote 1: "Nous voulons, etc. ... qu'en tous commerces et nogociations que pourront faire nos subjets pour pret d'argent, vete de marchandises ou autrement, lils puissent et qu'il leur soit loisible d'en stipuler pr lette ou bilt le payement au porteur sans denomination de personnes certaines," cited Brunner, op. cit. 160.

(2) _The origin and development of the bill of exchange._

In dealing with this much controverted subject I shall consider (i) the medieval contract of _cavolinum_ ; (ii) the machinery devised for giving effect to this contract; and (iii) the development of the negotiable character of the bill of exchange.

(i) _The medieval contract of cambiun_.

The contract of _cambium_ was a special variety of the in-nominate contract _permutatio_ ; for while _permutatio_ was concerned with exchange generally, _cambium_ was concerned with the special case of the exchange of money for money. Baldus neatly expressed the difference between them when he said that _permutatio_ was a contract by which a species of one genus was exchanged for a species of another genus, while _cambium_ was a contract by which a species of one genus was exchanged for another species of the same genus.2 As trade expanded, and as the machinery of trade grew more elaborate, this contract :ended to occupy a sphere of ever-increasing importance,3 and to develop a number of different forms --some, according to medieval notions, lawful, and others unlawful. We must here notice three of the most important of these forms.

Footnote 2: Cited Marquardus, op. cit. 12, 22, "hoc tantum interessee inter cambium et permutationem quod hace propria sit speici ad specien, illud autem speciei quoque ad genus"; cp. Scaccia, op. cit. SS r, Ques: iv, z.

Footnote 3: "Quinno cambion ade sunt Republicae utila et necessaria, ut si cambion cessarient, omnia pene mercaturee offici dissipparentur ac destiturentur," Scaccia, op. cit. SS r, Quest. vi i4.

($a$) It might be merely a contract by which A bargains to give B coins of one denomination in return for coins of another denomination (_cambium_ _minimum_). There was nothing illegal in this transaction even if A made a small profit on it.4 In England it was not a trade in which anyone could engage. Till Henry VIII.'s reign it was in the hands of exchangers authorized by the king.5 After his reign the trade was thrown open; and state control was never resumed, though the project of resuming it was

## 127 Origins and Development 127

favoured by Malynes, and several attempts were made to adopt it, the last of which was in 1627.1 Abroad this business was largely in the hands of the banks; and in England, in the early seventeenth century, it seems to have got into the hands of members of the Goldsmiths' Company,2 who, as we shall see,3 shortly after this period began to do a certain amount of banking business.

Footnote 1: Cunningham, op, cit, ii i64; Tawney and Power, Tudor Economic Documents 167-173; Tudor and Stuart Proclamations i no, 1932; below 135.

Footnote 2: Tudor and Stuart Proclamations i no, 1932; below 135.

Footnote 3: Below 185-185.

(_b_) Under the names of _cambium sicatum_ and _cambium fictivum_ the contract was entered into in order to circumvent the prohibition of usury; and these varieties of the contract were unlawful. They did not cease to be used when the usury laws permitted moderate interest,4 for they could be employed to conceal the fact that more than the statutory rate of Interest was being charged. Wilson's treatise on usury gives us a very clear account of _cambium sicatum_. This "secke or drye exchange," he tells us,5 " is practised when one both borrowe money by exchange for a strange region, at longer or shorter distance of time: . not myndynge to make anye real payment abroad, but compoundeth with the exchanger to have it returned backe agayne, acordyng as the exchange shall passe from thence to London for such distaunce of time as they were agreed upon: and yet tc colour this matter, there shall billes of exchange be devised and sent to some of his frendes that lent the money by exchaunge, with letters of advise, to return the byls back again, and a testimonil howe the exchange commeth from thence . which retourning of billes by testimonil, both ever cost the partye that dealeth with this sorte of exchaunge, after the rate of sixteene and twenty in the hundred for the yere . and some time above five and twenty or thirty in the hundred for the yere. And bylles by this kinde of exchaunge are made . for a colour onelie to get the parties hand to them, to shew (if neede be) that suche money so lente, was taken up for him by exchaunge, the said billes being never sent out of London." _Cambium fictivum_ seems to have been a loan at usurious interest, disguised under the form of a sale o' goods in return for a price which, being supposed to have been borrowed abroad, was therefore enhanced by the costs of excharge. Malynes gives us a good description of this device 6 A merchant, he tells us, not being able to borrow money, is driven to buy goods " for a shift." The persons to whom he applies for a loan, " feign that they have need of money, and must sell their commodities for ready money, provided always (say they with loving protestations) we will pleasure you thus far, look what the goods come unto, we will take it up for you

### 128 The law merchant

by exchange for Venice, Lyons, or some other place, so as you will pay us for exchange, recharge, or any other incident charges : whereunto the merchant agreeing, then shall be sure to pay soundly for the use of the money, and lose exceedingly upon the wares."

(_c_) Historically the most important variety of _anabinum_ was the contract by which A agreed with B to transport a sum of money from one place to another, and to deliver it safe at its destination.1 It is, historically, the most important, because the devices by which the risks of physical transportation were avoided have a close connection with the origins of many of the institutions of the modern world of commerce, and of many important branches of commercial law. In particular it must be regarded as the direct ancestor of the two institutions with which we are concerned in this section and the next--the modern mechanism of exchange and banking.

Footnote 1: In the case of the $a$, $b$, $c$, $d$, $e$, $e$, $f$, _g_

## 12 Origins and Development 129

means by which these payments could be made to or by these exchangers. The exchanger was appointed the agent or _nuntins_ of the creditor or debtor, and was the bearer of the instrument. In the third place, the great fairs afforded such convenient meeting places for the adjustment of these accounts, that it was a common practice to make debts payable at these fairs. Thus, from an early date, they became the clearing houses of Europe. The earliest fairs to fulfil this function were the fairs of Champagne.1 When they began to decline, in the course of the fourteenth century, the fairs of Lyons, Anvers, and Genoa succeeded to this position.2

Footnote 1: Le Droit des Marches et des Foires, 5;6, "C'est un usage teses general depuis le xitee siecle, de soucrrie des effets de change payables en forie. Les foires de Champagne sont de bonne heure, selon le mot o Grokschmidt, le domicile de change de lonte l'Europe. Nous possedons des lettes de change de l199, l248, l251, etc., payables aux foires de Champagne."

Professor Huvelin has so clearly and succinctly explained the manner in which this machinery was used to obviate the necessity of a physical transportation of money, that I cannot do better than copy his description 3:--" That we may the better understand this system, let us take an example. Genoa has business relations with London and Geneva. Goods have been bought and sold in all these places. From all of them there are debts to be recovered. To effect this object is it necessary to resort to the dangerous and costly process of transporting money? The merchants soon discovered the expedient of regulating their business relations by means of letters of exchange payable at the same fair. They stipulated for letters of exchange payable at the fairs of Bar, of Provins, &c. Suppose that a Genoese was obliged to receive a hundred livres from his London correspondent. The latter promised to pay this sum at the fair of Bar, for instance, and remitted to the Genoese the document in which he acknowledged that he owed this sum and promised to pay at a fixed date at the fair of Bar. He then chose in London a banker going to the fair of Bar, to whom he gave an authority to pay the debt in his name when it fell due. The Genoese on his side chose at Genoa a banker going to the same fair. Thus the two bankers played the part of _nuntti_ or _missi_ of these two parties. When they came to the fair the one was the bearer of an order to pay, the othe: of an order to receive payment of the debt.

" But each of these bankers who came to the fair had many payments to make and to receive ; and the duty to make and the right to receive these payments originated in obligations made in a large number of places. If the bankers of Genoa and London were obliged to pay and receive exactly the same sums from each place, the settlement would be very easy, since all the debts would be

### The law merchant

extinguished by set-off. But it may well be, and this is the most common case, that one of these places owed the other more than it is entitled to receive. Genoa for instance, may have an adverse balance as against London. Therefore, if we were only considering these two places, there would be a considerable debt still owing which would not be extinguished by set-off.

"But these two places are not the only places represented at the fairs. All the places of Western Europe are represented there. Now if Genoa has an adverse balance as against London, it may well have a favourable balance as against Ypres, Paris, or Geneva. Genoa has, therefore, a balance of payments to receive from these places. All unfavorable balance on the one side, a favourable balance on the other, obviously admits of set of. Genoa can draw on the bankers of Paris, Ypres, or Geneva to pay her London creditors. The sum to be liquidated will be the difference left after all these operations have been carried out. Thus ... thanks to the principle of set-off, thanks to the practice of making letters of exchange payable at the same fair, the work of making payments will be simplified and shortened. The amount to be paid in money will generally be insignificant."

Now, it is clear that it is to these developments of the contract of _ambition_, that we must look for the origins of the bills of exchange and the banks of our modern commercial life. We shall see that the earliest bills of exchange were instruments devised to obviate the risks of the physical transport of money ; and that the earliest bankers were the medieval exchangers who dealt in money.1 Merchants who wished to transport money, in order to liquidate their foreign debts, handed over the necessary sum to an exchanger, and he drew a bill upon his correspondent or agent in the foreign country. Conversely, merchants who were entitled to receive money abroad, made an exchanger their agent to receive the money due on these bills. To these exchangers, therefore, naturally fell the business of adjusting accounts between different countries ; and it was through the use made by them of these bills that they developed into bankers, to whom the merchants entrusted money to be dealt with according to their instructions. Thus the origins of bills of exchange and of banking are almost inseparably connected. In fact, we shall see that it is to the commercial needs which originated these bills of exchange that we must look for the explanation of the rise and growth of banks and banking.2

Footnote 1: Below 131-132, 177:

2 Below 177-178.

It is clear from the recently published Calendar of the early rolls of the Mayor's Court of the City of London 3 that the Italian merchants in England were making use of this machinery. In

## 130 Origins and Development 131

1 300 there is a case in which Geoffrey Beble, chaplain, complained that Antony, rector of Hurts, while staying in his house, had stolen _$17._ He alleged that Antony had taken the money to Brachius Lumbard of the Society of the Pulci of Florence, and had asked that it might be paid out to him by the Society in Paris. It appeared that Brachius had received the money, and that he had given Antony a letter addressed to the Society of Paris asking them to pay it. Brachius, when summoned, " admitted the receipt of the money, and said that it had not been paid out in London or Paris, but that he did not know whether it had been paid by the Society elsewhere. As the said Antony was not in Court, and as the Society in Paris had written to the other Societies not to pay the money, and as it was not known whether any other Society had already paid, Brachius was forbidden to pay the money until further orders."1 The letter written by Brachius to the Society at Paris was clearly a bill of exchange, and the later happenings clearly amounted to an attempt to stop the bill. In 1305 there is another case in which the same machinery of payment was adopted. Peter de Maners sued Vilanus Stolde and the Society of the Peruzzi of Florence for 100 marks, which had been entrusted to them to be paid at Andvers in Brabant a week later, or failing that in London at Midlent. The receipt of the money was admitted, but it was alleged that " they had sent a letter to a partner, John Vyleyn, at Andvers, by John de Maners, the plaintiff's brother, to pay the money, which they supposed had been done; but if the plaintiff would return the letter and prove that payment had not been made, they would satisfy him."2 Similarly in a case of 1302 there is a reference to payment through an agent at the fair of Turruk.3 These instances, I think, make it clear that this machinery of payment through bills of exchange was well known at the beginning of the fourteenth century.

Footnote 1: Op. cit. 94. ${}^{\\circ}$ Ibid 200-201. ${}^{\\circ}$ Ibid r29.

At this point we must return to the contract of _amobium_, and examine in detail the manner in which the machinery for giving effect to this variety of it, gave rise to our modern bills of exchange.

(ii) _The machinery devised for giving effect to the contract of camobium._

The machinery devised for giving effect to this contract of camobium was the bill of exchange. The earliest bills of exchange are in the form of a letter addressed by B to C, asking C to pay to a third person D a sum of money, which A has entrusted to B for this purpose. This letter is handed by B to A, who sends it on to D; and D presents it for payment to C. We have anThe law merchant

example of these bills as early as 1339;1 they are referred to in the Florentine statute of the _Calimala_ of 1332; and the English cases in the Mayor's court would seem to justify us in assigning to them an even earlier date.2 It is clear, therefore, that they were known in Italy at the beginning of the fourteenth century.3 Whence did they originate?

Footnote 1: Below 135 n. z. Above 137.

On this point it cannot be said that there is yet any definite agreement. But to my mind the most probable hypothesis is that they originated in the method employed by the Italian merchants who had entered into a contract to transport money. Such a contract would be contained in an _instrumentum ex causa cambi_.4 The method employed to carry it out was by writing a " letter of payment" to a correspondent living in the place where the payment was to be effected. In favour of this hypothesis it may be remembered that the earliest specimens of bills of exchange come from Italy; that their wording, when they appear in England in the sixteenth and early seventeenth centuries, is almost identical with the wording of the Italian bills of the fourteenth century; and that the analogy of many other institutions and doctrines of our modern commercial and maritime law would lead us to suppose that it was in Italy that this, the most remarkable institution of our commercial law, originated.

That this is the most prcbable hypothesis as to the origin of the bill of exchange will be clear, if we look at some of the other hypotheses which have been suggested. But, before dealing with these hypotheses, we should do well to remember that in this, as in other branches of law, the argument from analogy is dangerous. It is quite clear that so soon as commerce begins in any degree to develop, methods will be found of avoiding the risks attendant upon the physical transport of money. These methods of solving the same problem will naturally possess a superficial similarity. But the existence of this similarity is very far from proving any derivative relationship.

In the first place, it is clear that there is nothing in Roman law which in any way resembles the bill of exchange. No doubt the _adstipulatio_, the _delegatio_, and the _novatio_ could be made to

## 13 Origins and Development 133

fulfil some of the functions fulfilled by the bill of exchange ; but we cannot find in the classical texts any institution which resembles it in form, or in mode of operation.1 No doubt reasoning based upon such topics as _adjustitalite, delegatio_, and _novatio_, was sometimes used by the civilians of the fourteenth and fifteenth centuries to explain the legal position of the parties to a bill of exchange. They naturally tried to explain, in the technical language of their own system, the legal relations created by these commercial instruments, just as in the sixteenth century the English common lawyers tried to explain them in their technical language. But, as we shall see, it was impossible to make all their incidents fit precisely the technical conceptions of either system. Under both systems it was necessary to modify these technical conceptions in order to give them their full effect. Without such a modification (which, as we have seen, the school of the post-glossators was in general far more ready to make than the school of the Renaissance jurists) neither the bill of exchange, nor certain other institutions and doctrines of our modern commercial law, could have been evolved. As we have seen,2 a too rigid adherence to these technical conceptions destroyed the negotiable characteristics which the medieval instruments to bearer or to order had possessed.

Footnote 1: Huvelin, Travaux recents, etc., 7; 2 Above PS17-125.

Footnote 2: For a very full discussion and explanation of this theory (put forward by Grasshoff, Das Wechselrecht der Araber) see Huvelin, Travaux recents, etc., 23-25.

Footnote 4: See ibid 27, 28; cp. Nys, Les Origines lu droit international, 160, 163, 28I, 282, 5: Au moyen ae, le commerce arabe, tres actit etre perfectione, est un element fecondant pour le commerce d'Occident, sur lequel il marque son empreinte. Signe caracteretique de cette influence, la langue du commerce occidental est pleine d'emprunts a l'arabe, qui remontent a cette epoque (Tarafulk = trafic; awxf = avarie; farda = fardeau; machsin = magasin; tarha = tare (poids); ta'rif = tarif; divan = doune; simsar = sensalis, courtier),' Huvelin, op. cit. 24.

In the second place, claims have been made for an Arabic origin,3 It is certain that in the eighth century a.d., long before anything like the bill of exchange appeared in Italy, something very much like the modern bill of exchange was known. It could pass from hand to hand by something very much like an indorescent; and, to use modern terms, the payee had a right of recourse against the drawer in the event of non-payment by the acceptor. The influence of Arabic conceptions on Western commerce, especially in the reign of Frederic II. (1212-1255), is undoubted.4 The evidence of language alone is conclusive.5 But, as Professor Huvelin has pointed out, the existence of this analogous Arabic institution is not so conclusive as it might at first sight appear. The Arabic bill is far more fully negotiable than the Italian bill of the thirteenth century: It can pass indefinitely from hand to hand by what corresponds to an indorsement; but it was not tillsome centuries later that our modern bills of exchange acquired this quality.1

Footnote 1: The _Huvelin_, _Travaux recents_, etc., 27.

In the third place, Dr. Freundt 2 has put forward the theory that, among the northern nations, the bill of exchange may have been evolved from the letters patent and letters close by which rulers did much of their governmental business--financial or otherwise;3 and Professor Jules Valery advocates a theory closely analogous to that of Dr. Freundt.4 He too finds the origins of the bill of exchange in documents used in public law,5 such as letters patent or letters close or writs of liberate,6 dating from the thirteenth century or earlier. In these documents the king or other ruler orders an official, having control of his money, to pay a fixed sum to a payee or his agent producing the document.7 Professor Valery points out that the rulers of s.ates, especially at the time of the Crusades,8 often had occasion to remit large sums of money.9 He thinks it likely that the laconic and imperative style of these state documents suggested the form taken by the bill of exchange;10 and that documents thus drawn up were distinguished by their style from ordinary letters requesting the recipient to make a payment.11

Footnote 11: Valery, op. cit. 40.

Footnote 12: Travaux recents, etc., 1r.

Footnote 13: Orp. cit. 14.

Footnote 11: Valery, op. cit. 40.

But we must distinguish between these public documents. Some are merely instructions to a royal official to pay a royal debtor ; and, as Professor Huvelin has pointed out,12 the economic function of the bill of exchange is very different from the economic function of many letters patent and letters close executed with this object. The primary function of the first was to operate as a transport of money in the interest of the creditor. The primary

## 136 Origins and Development

### 136.1 Introduction

The study of the evolution of the evolution of the system is a very important topic of the study of the evolution of the system. The evolution of the system is a very important topic of the study of the evolution of the system. The evolution of the system is a very important topic of the study of the evolution of the system. The evolution of the system is a very important topic of the study of the evolution of the system. The evolution of the system is a very important topic of the study of the evolution of the system. The evolution of the system is a very important topic of the study of the evolution of the system. The evolution of the system is a very important topic of the study of the evolution of the system. The evolution of the system is a very important topic of the study of the evolution of the system. The evolution of the system is a very important topic of the study of the evolution of the system. The evolution of the system is a very important topic of the study of the evolution of the system. The evolution of the system is a very important topic of the study of the evolution of the system. The evolution of the system is a very important topic of the study of the evolution of the system. The evolution of the system is a very important topic of the study of the system.

The Law Merchant

Obviously these transferable shares helped to familiarize the wealthier classes of the community and the lawyers with the idea of transferable choses in action; while the Bank of England notes, established in 1696 by the same statute as that which established the National Debt and the Bank of England itself,1 familiarized them with choses in action which were soon recognized as negotiable.2 But it could hardly be contended that the idea of a joint stock divided into shares, or the idea of a negotiable instrument, originated in the fiscal expedients which were then adopted by the state. And something like this, I think, happened in the Middle Ages. State needs no doubt helped the development of the bill of exchange. The forms of public documents may possibly have influenced its form. But I should be inclined to take the view that the idea of the bill of exchange originated in the customs of the Italian commercial cities; 3 and there is no doubt that its legal development took place under the influence of the Italian commercial lawyers.4

Footnote 1: Below 174 n. 2, 188,

Footnote 2: Below 170-173.

Footnote 3: Cp. Valery, op. cit. 22,

Footnote 4: Below 137 seqq.

I think, therefore, that the origin of the bill of exchange must most probably be sought in the Italian letter of payment. At first it was only the satellite, so to speak, of a formal _cautio_ or _instrumentum ex causa cambi_--the contract by which A contracted with B to transport money for B to another place, in order that that money might be paid over to C. This formal contract _ex causa cambi_ is simply one of many uses to which these _cautious_ or instruments were put.5 This instrument is described by Scaccia as a public instrument, whereby the person receiving money for exchange promises to pay the agreed amount of the money to be exchanged to another, who is named in the instrument by the creditor who has advanced the money, that other being usually the correspondent of the creditor; and he further promises to send the public instrument to the creditor; and, if he does not fulfil his contract, he promises to repay to the creditor, with interest, the sum received in the place where he received it.6 But, for the purposes of exchange,

## 13 Origins and Development

This formal instrument gradually dropped out, and, in the course of the fourteenth century, its place was taken by the letter or bill by means of which the contract of transport was actually fulfilled.1 Thus, by that date, the bill of exchange had, through this development of mercantile practice, emerged as an independent contract possessing some very peculiar features of its own. It therefore became necessary for the lawyers to elucidate and to give technical expression to the legal relations subsisting between the various parties to the bill.

Footnote 1: Debray, op, cit, 43, 44; Brissaud, op, cit it 1441; the result was, as Scaccia, op, cit, SS 2 Gloss, 7, 68 (cited Debray, loc, cit), says, " Etsi ex formula lute literarum cambi nulla apparent promission seu obligate de solvendo illi, qui est approsius solution, tamen subintelligitur quod haec promission fueri facta numeranti pecuine . nam si ex ististiens not resulteral contracts cum promission e obligatinge, acciepens cambi non posset adstringi ad soluttoranso."

That we may understand the manner in which they approached this problem, it will be perhaps as well to recall the part played by the different parties to the bill.

(i) There is A, who wishes to remit money to a foreign country to be paid over to D (the payee). (ii) There is B (the drawer), probably an exchanger, to whom A pays over this money for the purposes of transmission. B, thereupon, to carry out this contract to transmit the money, writes a letter to C (the drawee), who lives in this foreign country, asking him to pay this sum of money to D. (iii) There is C (the drawee), who, on being requested by B to pay this money which he (B) has received from A, admits his liability to do so by accepting the bill. (iv) There is D (the payee), to whom C (the acceptor) has been requested to make this payment. Thus it was necessary to consider (_e_) the relations of the person who has paid over the money, which he wishes to remit, to the drawer who has received it; (_b_) the relations of the drawer and the drawee; (_d_) the relations of the payee and the drawer.

(_a_) _The relations of the person 'who has paid over the money, which he wishes to remit, to the drawer who has received it._--It is clear that the drawer, who receives money under these circumstances, is bound by his contract to pay the money to the person designated by him who has handed it over to him (the drawer) for this purpose. It is in effect a _constituum_; and, if the person who has handed the money to the drawer owes the money to the payee (which is the most ordinary case), it will be a _constitutum debiti alieni_. According to ordinary principles of Roman law, the drawer is bound to the man who has handed him over the money to pay it to the payee.2The _relative_ of the _relative_

## 189 Origins and Development

obligations. The drawer has received money--property--from the person who wishes to transmit the money. This money the drawer wishes to hand to the payee, and puts the drawee in funds for this purpose. If the drawee, who has admitted this liability by accepting, does not fulfil it, he is in effect keeping property which belongs to the payee. The payee can sue the acceptor to recover what is in effect his property.1

Footnote 29: https://www.math.

### The law merchant

(where, e.g., the man who gave value was the debtor of the payee) the lawyers agreed that this right of recourse must belong to the _dominus negotiu_--to the man, that is, for whose sake this contract of _canbinun_ had been entered into.1

Footnote 1: S:accia, op. cit. SS 2, Gloss. 7: ?o: "In \[litteris\] cambiu que vocant ex reditu nundinarum, ut plurimum ii, quibus nominatim in litteris cambiu fieri debet solutio, sunt veri domini pecuniarum t cambiu, quarre dans tunc cambiu est simplex minister, et adicuts solutiutioi est dominus " is, au Huelin says, op. cit. 13, "Il convient, nous disent Balde et Scaccia, d'apprecier, d'apres la qualite des personnes et les circonsances, qui est le _dominus Negotiu_. Jusqu'a preuve contriare, c'est le presentant qui est repute l'etre."

In this way the bill of exchange developed at the close of the medieval period into a contract of a very special kind. But as yet it possessed none of the characteristics of a negotiable instrument. Thus (i) even if the payee had an independent right to enforce the contract, that righ: was no more and no less assignable by the payee than any ordinary contract.2 (ii) We have seen that the rights of the payee depended upon the fact that value had been given by the person who wished to remit the money to the drawer, and that this value had beer passed over to the drawe for the benefit of the payee. It followed that if the drawer had never received this value he could not have passed it to the drawe ; and that the drawe, even if he had accepted, could plead this fact as a defence to any action by the payee.3 (iii) Similarly the acceptor could urge any other defence against the payee which could have been urged by the drawer.4 How then did the bill of exchange acquire its negotiable characteristics?

Footnote 3: Above t38 and n. 3.

Footnote 4: "L'acceptant pouviat lui (the payee) typeeest toutes les exceptions que le tireux aurait pu faire valoir lui-meme contre l'execution du constitut (p. ex, exception _non uninterate peemnia_). Il en fut effectivent aasi jusque vers le xvie siecle," Huvelin, op. cit. 20.

(iii) _The development of the negotiable character of the bill of exchange._

We have seen that the:e are three main characteristics of negotiability--assignability; presumption of value received, or, in English law, consideration ; and the acquisition of a good title by a bona-fide holder for value, irrespective of any defects in or want of title on the part of his assignor. We must therefore examine this question under these three heads.

(i) The manner in which the bill of exchange became assignable is connected ($a$) with the application to the bill of exchange of the clause directing payment to be made to a payee or to any one to whom he might order payment to be made on his account; and ($b$) with the practice and effect of indorsement.

## 14 Origins and Development 141

(_a_) We have seen that an instrument made payable to a creditor, or to any one to whom he might order it to be paid, prevented the debtor from raising any objection to being asked to pay to the agent of the creditor who produced the document. But we have seen that the payee designated by this order must be in a position to prove, either that the creditor had appointed him his agent, or that he had ceded to him his right to receive the debt. This burden of proof was gradually lightened by the practice of indorsement, and by the legal effects which were attributed to it.

(_b_) The word " indorse " means literally to place on the back (_sur dos_) of. Thus the purchaser of land indorsed on the back of the charter of feoffment the fact that the lord had made livery of seisin to him. A receipt was indorsed on the back of the obligation by a creditor to whom a debtor had paid the sum due under the obligation.1 In Italy, in the latter half of the sixteenth century, the practice sprang up of indorsing upon bills of exchange, and later upon some of the older instruments made payable to a payee or order, the order that payment should be made to X, the agent of the payee. The production of a bill with this order indorsed upon it created a presumption that the payee had handed it to X, the indorsee, and had authorized him to sue upon it. It thus dispensed with the necessity of proving a special authority given by the payee to X to act as his agent.2 But the order so indorsed merely operated as an authority to X, in whose favour the order was given, to act as the payee's agent. The form of the clause to order prevented, as Brunneer has pointed out,3 any further transmission. The debtor has only promised to pay the payee or any person in whose favour the payee has given his order. There is therefore no promise to pay the person in whose favour, not the payee, but the indorsee has given his order. Such a person is the agent, not of the payee, but of the payee's agent--_delegatus non potest delegare_.

Footnote 1: Brunner, Les titres au porteur francais au moyen age, N.R.H. x, 174, 175.

Footnote 2: Brissaud, op. cit. ii i439, 1440: "L'endorsement! dispensa de reodure une procuration speciale, puisqu'il constituait un vrai mandat ecrit au dos du titre "; Debray, These de la clause a ordre, 42, 46, 47.

Footnote 3: N.R.H. x 176-177; Debray, op. cit. 47.

So far, therefore, the bill of exchange has only attained a very limited degree of assignability. It can be indorsed and delivered once, but that is all. The questions then arise : When did it become completely assignable by means of repeated indorsements and deliveries ? What was the legal reasoning by which this change was effected ? What was the legal position of the various indorsees _inter se ?_

There is evidence that the Italian merchants were attemptingto make bills of exchange ccompletely assignable by repeated indorsements as early as 156o. The practice was alluded to in a law passed at Venice in 1593; and it was forbidden at Naples in 1607 and 1617.1 Neither the treatises of Scaccia (1618) nor of Rafael de Turri (1641) allude to the practice.2 But the treatise of Marquardus3 shows that it was recognized in northern Europe by the middle of the seventeenth century; and the treatise of Ansuldus (1689) shows that it was generally recognized in Italy in the latter part of the same century.4 In France it was recognized before the middle of the same century; and it was regulated by the Ordonnance of 1673.-6

Footnote 1: The author was supported by the National Science Foundation of China under contract No. 1

## 14 Origins and Development

signability, formerly allowed to the older instruments made payable to a creditor or his nominee, was restored. As M. Debray has pointed out, the attainment of this result, at the close of the seventeenth century, was due, partly to a larger appreciation of the needs of the world of commerce, partly to the decline of the influence of the school of the Renaissance jurists.1

Footnote 1: Op. cit. 5o, "I' n'existait plus de jurisconsultes comme Dumoulin ou Charondas dont l'esprit d'analyse put decomposer les elements de la clause a ordre et en faire une construction juridique et desacord avec les besions de la pratique"; cpl. Huvelin, Travaux ecerents, etc., 16, 17, "Or l'on n'a pas sissez remarque combine l'emploi de la terminologie et des conceptions romains esp'apique mal en nos matieres, combine il fausse les resultats auxquels on aboutit, et combine l'intervention des postglossateurs et des jurisconsultes poseterieurs eleves a l'ecoole de Justiinen a rendu plus difficile la doctrine de note institut "; for this school sev, iv. 225-228.

The legal position of the various indorsees _inter se_ was naturally dictated by the legal reasoning which made several indorsements possible. The principal must indemnify his agent for all expenses to which the agent has been put. If, therefore, X, a payee, in consideration of a sum of money, makes Y his procurator _in rem suam_ by indorsing and delivering to him a bill, and Y cannot get paid by the acceptor, X must indemnify him; and if Y indorses to Z, the same principle will apply as between Y and Z.2

Footnote 2: Ansaldus, op. cit. Disc. II. 77 "I amen einxiants et probavimus quod girata seu cession non sit contractus mercati sed mandati "; ibid 30 \[" Giriata litterare cambi\] equipollege pecuine numerate, sed dum modo subsequatur solutio, alias datur regressus adversn traitement seu schirentem."

Footnote 3: Above 138 n. 3.

Footnote 4: Op. cit. SS 2 Gloss. 8, 5, 6 " Limita prino eandem regulam, ut non procedat, quando camsaris, id est debito, confessus esset in litteris cambi numeratiomen pecuine. Declara, explicando quehus hanz limitationem, ut in civitate Genue ex communi mercatorum observatiu campusarius daatur confessus numerationp pecuine in litteris cambi, quando in litteris sunt opposition Wa verta, _for la raulina havantia di contanii_."

(ii) The presumption that the acceptor of a bill had received value for it was gradually admitted. We have seen that Scaccia laid it down that the acceptor could plead the _exceptio pecuine non numerate_;3 but he accompanies this admission with many exceptions and limitations. Thus he admits that if the letter contained the clause " for value received," the defence could not be pleaded.4 As this was, and is, the general form of bills of exchange, it was not difficult to arrive at the rule laid down by the French lawyers that " l'acceptation suppose la provision,"5 and by our modern Bills of Exchange Act that " every party whose signature appears on a bill is prima facie deemed to have become a party thereto for value."6

Footnote 4: 45 and 46 Victoria c. 6i, SS 3, 1.

(iii) It was not difficult to enlarge this presumption. If consideration is presumed, why not presume that other necessary

### The law merchant

elements of the validity of the bill are present? It would seem that this presumption was made in France in the seventeenth century ; and it followed that defences good against a payee were not necessarily good against an indorsee.1 But could this presumption _omnia rite acta_ be rebutted? It seems to have been settled in the latter part of the seventeenth century that it could not, if the person entitled under the bill took in good faith ; and good faith was always presumed.2 This conclusion seems to have been arrived at by basing the acceptor's liability to the payee on quite a different ground from that taken by the older law. It was thought that, by accepting, he personally promised to pay to the payee or anyone who appeared as indorsee. His contract was therefore with the indorsee who appeared with the bill.3 This liability could not be affected by any equities existing as against any one else, because to the contract between the acceptor and the ultimate indorsee any one else was a stranger.4

Footnote 1: Debray, op. cit. 57, and authorities there cited; cp. Brissaud, op. cit. ii 144T-I442.

Footnote 2: See Brunner, op. cit. 143-144.

Footnote 3: Ansalotus, op. cit. Disc. I. To, "Tunc per eandem acceptationem censetur acceptants sesse fecis debtiomer ex causa propria, vel tampuam fideiussorem scribentis, ut dicunt in ratione decidendi _Anthoriates_ mov recensite "; ibid Disc. IV. 3 "Qui huiussmodi litteras acceptando nulla sesse valent exceptione tueri, sed compelluntur solvere, ac si per solennem stipulationem sesse soluturos prefixo tempore promisissent et obligassenet."

Footnote 4: Ibid Disc. II, 37-39 " Recepta propositio, quod exceptio, que obstat codenti vel giranti non obstat cessionario vel giratario, de qua in terminis mandatarii acceptantis mandatum de solvendo aliciu tertio, quod non possit solutionem denegare giratario, non solum si non sit debito., sed etiam si sit ecriditor girantis ... De eo, quoi cum Recisset eedulam, seu, ut dicitur, $Pagaro$, quod non possit site recussate solutionem giratario, quantumvis fuissel creditor illius, qui recegent, et respective giraverat idem $Pagaro$, dum modo giratarius foveat causam onerosam, et non represent tanquam simpliciter adiectus personam girantis "; cp. ibid Disc. LXXII 5 " Exceptio, quae competet contra excommunicatum cedentem, obicii non valeat occasionario, veluti avium mere personale."

Footnote 5: Above 143 and n. I.

Thus the bill of exchange gained, in the middle of the seventeenth century, many of the negotiable characteristics which the older instruments payable to order or bearer had lost in the sixteenth century. It was nct difficult, in those countries in which the bearer of these instruments still retained an independent right of action, and later in all countries in which his independent position had come to be recognized, to make these bills also payable to bearer. Under the influence of a school of lawyers less enslaved to the classical texts than the Renaissance jurists, and more alive to the interests of commerce,6 the bill of exchange was permitted to supply the want caused by the disappearance of the negotiable character of the older instruments. And thus, though much younger than these instruments, though originally mere letters without any legal significance, they have become the type and

## 10 Origins and Development

model of the negotiable instruments known to our modern law ; and, as Brissaud has pointed out, they have in consequence come to perform a new function in the modern world of commerce. They have become modes of payment and instruments of credit--a species of currency, in fact, among merchants. The value which they represent is incorporated in them ; and the ingenious device of modern commercial practice has thus curiously revived the formal _carta_ of the early medieval period.1

Footnote 1: Op. cit. ii I${}\_{442}$ : "Ellle ne servit d'abod qu'A eviter un transport d'argent: on en fait un moyen de payement et un instrument de credit, une sorte de monnaine entre commercs; la valeur qu'elle represente s'incorporge a elle et la pratique savante des temps modernes revient ainsi par un detour intendu a la _carta_ formaliste d'epoque barbare."

How the negotiable characteristics of these instruments can be reconciled with legal principle is a matter upon which there has been much speculation.2 Such speculation is outside the sphere of legal history ; but I think that the history of their growth would seem to suggest that these characteristics cannot be explained by reference to the principles solely applicable either to the law of property or to the law of contract. It suggests rather that they are a judicious mixture of those parts of the principles underlying both these bodies of law, which are the most favourable to safe, easy, and rapid circulation. If we look at the law of property we see that there is no difficulty in assigning property, provided that the assignor has a good title. But "nemo dat quod non habet." If we look at the law of contract we see that there is no difficulty about the binding force of a contract to convey another person's property. The promissor is obviously bound personally if he chooses to make such a contract. But difficulties begin when we attempt to assign the benefit of a contract. The negotiable instrument avoids both the proprietary and the contractual difficulty by a judicious mixture of principles taken from both these branches of law. It borrows from the law of property the easy method of assignment by means of an indorsement and delivery, or a delivery merely of the instrument. It borrows from the law of contract the principle that the person primarily liable is personally bound by his contract :o pay the indorsee or bearer producing the bill ; and that, therefore, no defence, which he might have had to claims by other persons, and no question of title to the bill, can be any answer to an indorsee or bearer

### 146 The Law Merchant

producing the bill, who has acquired it in good faith and for value. In addition, it borrows from mercantile custom the principle that, normally, good faith and value will be presumed.

By the end of the seventeenth century continental lawyers had substantially come to these conclusions. We shall now see that their development in England closely followed their development on the Continent.

_Introduction into England and development by the Common Law_

The negotiable instrument came to England from the Continent ; and its adventures in England present some analogies to its adventures in the countries from whence it came. Therefore, although its history in England is in some respects unique, neither that history nor the law resulting therefrom, can be understood without the help of the light thrown upon them by continental analogies.

There are some indications that instruments payable to a creditor or his nominee, and perhaps instruments payable to a creditor or bearer, were known in medieval England ;1 and possibly these instruments possessed certain negotiable characteristics. But cases turning upon them did not come before the common-law courts ; and there is reason to think that, if they had done so, these negotiable characteristics would have been as strange to the common law as they were to the civil law.2 No doubt the bill of exchange was well enough known to the mercantile world ; and the cases from the Mayor's Court in London, which have been already cited, show that it was well enough known to the English merchants.3 But it is not till the sixteenth century that there are any indications that its existence had become known to English lawyers. In the course of the following century it was received into English law, and recognized as possessing the same negotiable characteristics that it had acquired abroad. It was therefore in connexion with the bill of exchange that the common law first became acquainted with negotiability.

Footnote 1: Vol. i 543; vol. v 114; above 116, 130-131.

During the seventeenth century some lawyers were inclined to follow mercantile usage, and to attribute this quality of negotiability to certain other bills or notes, containing promises to pay money to a creditor or order or to a creditor or bearer. But in the last years of that century the courts, under the influence of Holt, C.J., decided that negotiability was the peculiar property of the bill of exchange. This led to such serious inconvenience that, atThe English Development

the end of this period, the Legislature declared that these promissory notes were and always had been negotiable.

This summary of the early history of negotiable instruments in England indicates the main lines of development. I shall relate that history under the following heads : (1) the older instruments payable to a creditor or his nominee, or to a creditor or bearer ; (2) the bill of exchange ; and (3) the promissory note.

1. _The older instruments payable to a creditor or his nominee or to a creditor or bearer._ We have seen that there are a few slight indications that the courts of the medieval English fairs knew of these older instruments.1 But, in the printed collactions of these cases, there is only one case in which such an instrument is made payable to bearer ; and in that case it was the party to whom it was made payable, and not the bearer, who sued upon it.2 In other cases these instruments were made payable to the _certo attornato_ or _nuncio_ producing them.3 Similarly, we get in Madox's collection a certain number of instruments in which there is a promise to pay to a creditor or to his "certain attorney" ;4 and in two of these precedents the money is to be paid to the certain attorney " producing the instrument."5 The inference would seem to be that the assignable instruments, which we find on the Continent, were unknown to or ignored by the mediaeval common law. No doubt, as the power to appoint an attorney came to be generally permitted, the creditor could enforce his right through his attorney duly appointed--probably whether this fact were mentioned in the instrument or not.6 But, from the fact that the common law never recognized the assignability of any chose in action, we may infer that it was only the creditor himself or his duly appointed attorney who could enforce them.7 Therefore if such instruments had been known to the mediaeval common lawyers, they would probably have been treated by them much in the same way as they were treated by the civilians abroad.6

Footnote 1: Vol. i 543; vol. v r14; above r16.

Footnote 2: Select Pleas in Manorial Courts (S.S.) 152. 2 Above rIG.

Footnote 3: Formulare Anglicanum, nos. 64, i62, 645, 647, 648, 649, 651.

Footnote 4: Ibid nos. 643 and 653; in the latter the creditor is Robert Rede, Justice of the bench, and the payment is to be made " Roberto aut so cetto attornato hoc scriptum ostendenti, haeredibus executoribus sui ; it is dated March 8, 1501 ; and the money is stated to have been lent "pro mercanids in Stapula Westromasterili emptiis."

Footnote 6: Vol. ii 316-317. 7 Vol. vii. 533, 53+537. 8 Above r21-125.

It is probable, however, that these instruments were well enough known to those few English merchants who were engaged in foreign trade. At any rate, the records of the court of Admiralty show us that, from the beginning of the sixteenth century, they were an ordinary part of the machinery of commerce. Thus in i533 we find the following document:1 "Be it known to all men that I Thomas Thorne haberdasher of London have taken up by exchange of Thomas Fuller merchant of the staple of Calais the sum of 1xli sterling, the which sum of three skore pounds sterling to be payd to the said Thomas Fuller _or to the brynger of thys byl_ in manner and forme foloynge. to the whiche payments well and tewly to be payd to the said Thomas Fuller _or to the brynger hereof_ . I the said Thomas Thorne lynd me myne ayres executors and assignes and all my goods." Tie bill is signed and sealed by the maker. In i536 we have a similar bill drawn in a set of three, and promising to pay to the creditor or his assigns. It runs as follows:2 "Be yt knowing unto all men by this my second byll not beyng payd my fyrst nor thyrd I William Browne merchant of Tynbe. knowlage that I wwe unto you Thomas Gale haber-dasher of London xli xs sterling the which tene pounds and tene shillings starling I promys and me bynd to pay unto the sayd Thomas Gale _or to this assignes._" In i538 we have a combination of these clauses. In a document under seal, John Stubbarde, citizen and fishmonger of London, and Peter Kyrseeman, merchant of Bruges, bind themselves to pay $\\mathcal{L}$13 to John Harryson de Roos, mariner of Sluys, for a certain ship which they had bought of him; and this sum is to be paid to "the said John or to his certain attorney his heirs executors or assigns or to the presenter or bearer of this present writing." There are several other similar documents appearing in the same records,1 all of which, it is fairly clear, correspond to the instruments payable to a creditor or his nominee or to a creditor or bearer which were in use on the Continent. The question therefore arises--What effect was given to them by mercantile practice and by English law?

Footnote 1: Select: Pleas of the Admiralty (S.S.): i4.

Footnote 2: Ibid 62, t96.

Footnote 3: Ibid 72 (r538-r539); ii 68 (r538)--called a bill of exchange; 70 (r549); ibid 75, 71 (r554)--called a bill of exchange; 71 (r553); 72 (r557); 73 (r557).

On both these points Malynes' treatise gives us some information; and that information probably presents both the practice and the law of the greater part of the sixteenth and of the earlier part of the seventeenth centuries.

Malynes tells us5 that the "most usual buying and selling of commodities beyond the seas, in the course of traffic, is by Bills of Debt or obligations called Bills Obligatory, which one merchant giveth unto another for commodities bought or sold, which is altogether used by the Merchants Adventurers at Amsterdam, Middleborough, Hamborough, and other places." He gives us the following specimens of the usual form of these bills:6 "I, A.B.

The English Development 149

merchant of Amsterdam do acknowledge by these presents to be truely indebted to the honest C.D. English merchant dwelling at Middleborough, in the sum of five hundred pounds currant money for merchanize, which is for commodities received of him to my contentment, which summ of five hundred pounds as aforesaid I do promise to pay unto the said C.D. (_or the bringer hereof_) within six months next after the date of these presents : In witness whereof I have subscribed the same at Amsterdam the io of July, 1622, _Stilo novo_, A.B.'

It is reasonably clear that this is one of the old instruments to bearer, adapted to modern commercial conditions, which had long been known on the Continent. We have seen that, before the date when Malynes wrote, they had lost those negotiable qualities which they had possessed in earlier law.1 But on the Continent the merchants had invented a cumbersome device by means of which they could be made assignable. The creditor and payee of such a bill stipulated with his debtor, the maker, that he (the debtor) would make the bill payable to any person nominated by himself. The maker thereupon drew the bill, leaving the name of the payee blank. The original creditor then handed this bill to a creditor of his own to present to the maker thereof. But this assignee might, by a similar method, make use of it to pay a creditor of his ; and so the bill might pass through half a dozen different hands before it was finally presented to the maker by the man who wished to have his name inserted as payee.2 Or, Malynes tells us, the bill might be made payable to the original payee or bearer ; " and so all the parties are bearers thereof, into whom the same is set over by a tradition of it only."3 It should be observed, however, that all depended on the solvency of the maker. The names of the several transferees did not appear on the bill, and therefore they had no recourse against each other.4 It was not till the clause to order and the practice of indorsement had been applied to these bills that this security was gained.5 But it would seem that, when Malynes wrote, this device had not yet been applied to these bills. The only bills with which he was acquainted were bills to bearer. In spite, however, of this defect, it is clear that these bills of debt were, among the merchants, regarded as a species of mercantile currency. The parties by themselves or their brokers had (like our modern bill brokers) 1 means of finding out the commercial reputation of the maker of any till, which an intending purchaser proposed to give in payment; and the holder of such bills could sell these bills and get ready money for them. These bills are, as he says, "as money paid by assignation." 2

Footnote 1: The author is grateful to the anonymous referee for his comments.

The advantages of this mercantile custom are eloquently set forth by Malynes 3--"very great matters are compassed in the trade of Merchandize, the commodities are sooner vented in all places, the custom and impositions of Princes do increase, the poor and mechanical people are set on work, men are better assured in their payments, the counterfeiting of bills and differences are prevented; the more commodities there are sold, the less ready money is transported, and life is infused into traffick and trade for the general good." But he is forced to admit that this mercantile custom was wholly unknown to and legally impossible in the common law. Being choses in action they could not be assigned.4 If they were drawn up, as they usually were, in the form of a contract under seal, they could not be made payable to bearer, or altered into another man's name; and letters of attorney given by the payee to an assignee to sue in his (the payee's) name were always revocable.5 Many lawyers and merchants, he tells us, had advocated the establishment of this custom in England by Act of Parliament; 6 and he makes the further suggestion that transfers should be indorsed on the bill, and that there should be (as at Lisbon and Rouen) a register kept of all these bills.7 But these The English Development1 151 suggestions bore no fruit. "Hitherto things are not rightly understood, as it is to be wished it were, whereby other nations have still an advantage."1

Footnote 1: Lex Mercatoria, 74 ; it may however be noted that a bill to make bills of debt transferable by indorsement was before the House of Lords in r669, but it dropped with the close of the session, ibid MSS, Com, 8th Rep. App. J37; and that in February 1672-1673 an Act for assigning bills and bonds was ordered to be prepared by the House of Lords, which got as far as its first reading in January 1673-1674, journals of the House of Lords xii 538, 623 ; Hist MSS, Comm. 9th Rep. App. Pt. ii 40 no. i51; a similar proposal had been made in r653, vol. vi 478.

In England, as abroad, it was not till the modern idea of negotiability had come into the common law in the train of the bill of exchange, that these bills obligatory developed into negotiable instruments, and became the promissory notes of our modern law. To the advent of the bill of exchange in this country we must now turn.

The bill of exchange, and the law and practice relating thereto, were known to English merchants long before they were fully received into the common law.2 When, in the early part of the seventeenth century, the common law courts began to recognize the validity of these instruments, they were already a developed institution.3 It was inevitable therefore that the common law should receive, along with then, the law which had grown up around them on the Continent. This reception took place under cover of the recognition of mercantile custom; but it was no wholesale or slavish reception. No doubt, both our system of case law, and the insularity of the common lawyers, helped to prevent a reception of this kind. Foreign writers are very rarely cited in the reports;4 and foreign doctrine was both modified, when modifications were necessary to suit the different technical conceptions of English law, and added to, when new cases produced new problems for solution. This process was in full operation during the latter part of the seventeenth century. It was naturally far less rapid than it would have been if foreign doctrine had been received in a more wholesale manner; and therefore at the end of this century English law was less detailed, and perhaps less advanced, than the law of man; continental countries. But the process had fairly started, and good progress had been made.

Footnote 2: Above l30-131.

Footnote 3: Above l36-145.

The history of the bill of exchange therefore falls under two well defined heads: (i) the bill o: exchange in mercantile practice;

### The law merchant

and (ii) the recognition and development of the bill of exchange in English law.

1. _The bill of exchange in mercantile practice._

Though, as we have seen,1 documents which were in substance bills of exchange had made their appearance in the Mayor's Court of London at the very beginning of the thirteenth century, they do not make their appearance in the central courts till much later. There is a possible reference to a document, which is something like a bill of exchange, in a case heard by the court of Chancery between 1486 and 1500.2 But the earliest specimens of bills of exchange are to be found in the records of the court of Admiralty. It is clear from their form that they are exactly similar to the bills of exchange known on the Continent. The earliest is a Latin document of the year 1540 translated from the Italian,3 and there are others of 1553,4154,51562,6 and 15637 in English. If we compare the specimens of 1540, 1562, and 1563 with the specimen given by Malynes, we shall see that in England they were drawn in the same stereotyped form as in other parts of Europe.8

Footnote 1: Above Igo-I3I,

Footnote 2: Proceedings in Chancery (R.C.) i cxx-cxxii ; the plaintiff, Sebastian Giglis, merchant of Venice, alleges that at the request of the defendant, Robert Welby, priest, he wrote to one Reale, a merchant, a letter asking Reale to pay to Welby &20. Reale did so, taking a document with sureties signed by Welby for repayment. He was unable to get payment at common law because the document was not sealed, and Welby waged his law. Therefore Reale sued Giglis who was obliged to pay. On these grounds the Chancellor ordered Welby to pay the money to Giglis; this letter, if not actually a bill of exchange, is certainly reminiscent of the mercantile practice which gave rise to them.

Footnote 3: It runs as follows: "'Jhesus I540. 26 die Julii in London," cxviii li. xviii s. monete Flandrie currents.

Footnote 4: Ad tempus solitum Anglice at usans solvetis pro hac prima presenti billa cambi D. Barnardo Calvalcanti libras centum e octodecim et solidos octodecim grossorum in monetta entrept pro valore recpoto a Guidone Cavalcanti et pontis in computo V. . . orum hic Subscripo literarum embi Meliadux Spinola.

"Superscripo literarum huiusmodi D. Adriano de Brancho juniori in Antuerpia.

"(_In the margin_) Tenor literarum cambi ex Italico idiomate in Latinum translatarum," Select Pleas of the Admiralty (S.S.) ii 69.

4 Ibid 70. 3 Ibid 71. 6 Ibid 73. 7 Ibid,

8 The following is the bill of 1562:: "Laus doo. Andwarpe let 4 of September r562, 560 o. .

"At Usans and halfe pay by this my fyste byll of exchainge my second not being paid to Myhell Cruche or the bringer heroof the some flyeftey poundes sterling corant mony for marchandsyse and ys for the valewe receyved here of John Turner at the daye make good payment and put y to your acompte by me Richard Stainffeld.

"Eccepted by me William Lewtie.

" (_Endorsed_) To Mr. Lewteye servant to Richard Stainffyld dd in London pa,"

"Lex Mercatoria, 269, 270.

**THE ENGLISH DEVELOPMENT 153**

"Laus Deo. Adi 24 August 1622 in London--500 lb. at 34s. 6d.

"At usance 1 pay by this my first bill of exchange to A.B. the sum of five hundred pounds sterling at thirty-four shillings and six pence Flemish for every pound sterling currant money in merchandize for the value hereof received by me of C.D. and put it to account as per advice, A. Dio. etc. G.M."

Footnote 1: The term usance means the time at which the bill was payable, if not payable at sight. This time varied according to the custom of different places. Double or treble usance means double or treble the customary time, and half usance half the customary time, Malynes, or, cit. 268, 269; Marius, Practical Advice, 18.

Then, " on the backside is indorsed, To my loving friend, Master W. C. merchant in Amsterdam, Pa."2

Malynes says 3 that the bill must always be in this form--"You may not say in the bill it may please you to pay or I pray you to pay, although it were to your master; for the bill of his high nature dot carry with it a command . neither is there any witness unto it nor any seal, but a small piece of paper of some two fingers broad : and the letter of advice both declare for whose account, or to what intent or purpose the said money is taken up."4

Footnote 2: I.e. The Italian Pagate.

Footnote 3: Or, cit. 270; cp, Marius, op, cit. 1.

It is clear from this specimer that we have the same four parties to the bill as on the Continent.5 (i) There is C. D. who has paid over money to G. M. ; (ii) there is the drawer G. M. ; (iii) there is the drawe W. C. ; and (iv) there is the payee A. B. It is also clear that the bill has not yet become a negotiable instrument. In the specimen Maynes gives we do not find the expressions "order" or "bearer." As we have seen, it was not till after Malynes wrote that the development of the negotiable character of the bill of exchange took place in continental states.6 But the need for an instrument which admitted of some form of transfer was obvious ; and the mechants met it by a device not unlike that which they employed in the case of bills obligatory. "Peter delivereth five hundred pounds to John, who is to give the bill of exchange for it ; Peter taketh up five hundred pounds of William, and may give him the said bill of John for it ; William taketh up five hundred pounds of Nicolas, and may deliver John and Peter's bill for it ; Nicolas taketh up five hundred pounds of Francis, and both give him the bill of John, making mention of Peter and William. Here are four takers-up of money, and but

### 154 The Law Merchant

effectually one deliverer of money, which is Francis : for albeit that Peter was the first deliverer of the five hundred pounds, he became a taker again of the said money, receiving the same of William ; so that _gradatin_ John is the first taker-up of the said five hundred pounds, Peter is the second taker-up, William is the third taker-up, and Nicolas is the fourth taker-up of the said five hundred pounds of Francis. To this Francis is the bill of exchange given, payable to his friend, factor or servant in the place for which the money was taken up. But the said bill is made by John, the first taker-up of the said money, declaring, that the value of it was received of Peter, for William and for Nicolas, upon the account of Francis, which is the last deliverer of the money ; which bill being paid, all the parties in this exchange are satisfied and paid : which is done with great facility."1

Footnote 1: Malynes, op. cit. 27I.

This method of assigning a bill of exchange had one very great advantage over that used in the case of bills obligatory. All the parties' names appeared on the bill, and they could therefore all be made liable on it. "As for example, Francis, the party who took this bill, as being deliverer of it (the money) at last, must go a retrograde course herein, if John who made the bill, and was the first taker-up, do not pay the same : Francis then seeketh Nicolas, Nicolas seeketh William, William seeketh Peter, and Peter seeketh John, the first taker-up of the money of him. Suppose that John is broken then he goeth to Peter ; if Peter is broken, then to William ; if William is broken, then to Nicolas ; if Nicolas is broken, then all is lost. So that all of them are answerable to this bill as above said."2

Footnote 2: ${}^{#}$ Ibid 274.

But this was a cumbersome process. The merchants, in their efforts to find more convenient methods, were accustomed either to send letters of credit,3 or bills with the names left blank to be filled up by their foreign agent,4 or to make the bill payable to the payee "or the bringer thereof." As to the effect of these words, when Malynes wrote, I must say a few words.

Footnote 3: ${}^{#}$ A merchant doth send his fried or servant . to buy some commodities or take up money for some purpose, and doth deliver into him an open letter, directed to another merchant, requiring him that if his friend . the bearer of that letter have occasion to buy commodities or take up moneys . that he will . procure him the same . and he will provide him the money, or pay him by exchange," ibid 76.

Footnote 4: ${}^{#}$ There is also a custom that a master to his servant or one friend to another will send bills of exchange with the names in blank from one country unto another, as from Hamburg to Embden, or from Antwerp to Amsterdam, and from thence to Dansic ; and at Amsterdam the names are put in to whom to be paid, and of whom rccived," ibid 272 ; a similar plan was pursued in the case of the bill obligatory, ibid 77.

Malynes expressly cauticns merchants not to insert these

## 15 The English Development

words.1 But that they were generally inserted is clear from some of the specimens of bills in the Admiralty records,2 and from the early seventeenth-century precedents of pleading.3 We have seen that abroad their insertion did not at this period give the bearer a right to sue;4 and we shall see that, when bills of exchange became common in the English courts, the same rule was adopted. But it would appear that, if the bill contained these words, a payment by the acceptor to the bearer discharged the acceptor.5

Footnote 1: The author is grateful to the anonymous referee for his comments.

Malynes' book was published in 1622.6 In 1651 Marius, a notary public, published a small tract giving practical advice upon bills of exchange.7 An enlarged edition, published in 1670, was said by the author to embody twenty-four years' experience in his profession. But it would appear from the preface that the new edition did not embody any very striking changes in the law, but rather consisted of a number of additions to the information given.8 If this be so, it is clear that between 1622 and 1651 very great advances had been made towards making the bill of exchange a negotiable instrument. And, having regard to the state of the law on the Continent, this is not surprising. It was during this period that the practice of making bills rayable to order, and of transferring them by indorsement, was becoming common; and it is clear from the French legislation that it was becoming more and more common to make both bills and other instruments payable to bearer.9 All the specimens of bills which Marius gives are made payable to A or assigns or to A or order, and the assignment or

Footnote 1: "Neither may you make a bill of exchange payable to the bearer or the bringer thereof (as you make your bills obligatory beyond the seas)," Malynes, op, cit. 270.

Footnote 2: The bills of 1562 and 1563, Select Plas of the Admiralty (S.S.) if 73, above 152, have this clause.

Footnote 3: ${}^{\\circ}$ I have now ... not only comprised what was Groactively handled, and something enlarged upon the same for the better understanding therof ... I have in a manner gone through the whole body of Exchange."

Footnote 9: Above 125:126, 142.

Footnote 1: ${}^{\\circ}$ I have now ... not only comprised what was Groactively handled, and something enlarged upon the same for the better understanding therof ... I have in a manner gone through the whole body of Exchange."

Footnote 9: Above 125:126, 142.

Footnote 1: ${}^{\\circ}$ I have now ... not only comprised what was Groactively handled, and something enlarged upon the same for the better understanding therof ... I have in a manner gone through the whole body of Exchange."

Footnote 9: Above 125:126, 142.

Footnote 1: ${}^{\\circ}$ I have now .

order is indorsed on the back.1 Moreover, it is clear that the assignee or indorsee might himself assign or indorse over.2 If the bill was indorsed in blank the holder might either insert his own name as indorsee, or, on getting payment, write a receipt for the money.2 That bills were sometimes also made payable to bearer is clear from Marius's warning of the dangers of the practice.4 On the other hand, a bill might be payable to A simply. In that case it admitted of no assignment.5

Footnote 1: It may, however, be noted that, though the clause to order or to assigns does not appear in the specimens of bills which Malynes gives, we get the clause to assigns in a bill of 1554, Select pleas of the Admiralty (S.S.) ii 7t, and also in a pleading dated t627, Vidian, Exact Pleader, 68.

Footnote 2: Marius, op, cit. 9--for the forms of indorsement; at p. ii he tells us that on outland bills (for these see below t58) three or four assignments are often written.

On many other points Marius follows closely the rules of law observed on the Continent. Thus the rules as to acceptance for honour ; 6 the irrevocability of acceptance ; 7 protest in case of non-acceptance, unduce acceptance, or non-payment ; 8 days of grace; 9 the efficacy of a verbal acceptance ; 10 liability on a lost bill ; 11 the liability of an indorser to his own and, perhaps, to subsequent indorsees 12--all follow closely continental rules of law. On the question whether a bill should be presented for acceptance as soon as received, or whether the holder should wait till it falls due, he strongly advocates the English custom that it should be presented as soon as possible, in order that the other parties to the bill might not be prejudiced.12 No doubt on this 14 and upon other points (e.g.

## 11 The English Development'

as to the possibility of a verbal acceptance,1 as to the validity of a gratuitous promise to accept,5 and as to the rights of the parties on a lost bill) 3 English law was ultimately settled to be the contrary of the rules which he laid down. But when he wrote, English law on this topic was, as we shall see, but scanty. Probably he had an accurate knowledge of such points of law as had been actually decided.4 At any rate, it is certain that the large majority of his rules upon points of form, practice, and procedure, have been adopted, and are at the present day part of English law.5

Footnote 1: https://www.math.ucsd.edu/~nist/

Footnote 2: https://www.math.ucsd.edu/~nist/

Footnote 3: https://www.math.ucsd.edu/~nist/

It is clear therefore that, when Marius wrote, a bill of exchange made payable to order had, in mercantile practice, acquired one of the most important clcments of negotiability--a capacity to be transferred indefinitely by indorsement and delivery. On the other hand, a bill of exchange made payable to bearer was probably still in the same position as it was in when Malynes wrote. But Marius leaves us uncertain as to how far these bills possessed the other two elements of negotiability--the capacity of a bona fide holder for value to get a better tite than his transferor, and the presumption of consideration. Thus he says nothing at all on the question whether a holder of a bill in good faith, who has acquired it from one who had no title or a defective title, can sue upon it. But it would appear from Malynes that mercantile opinion was in favour of the view that an acceptor was always prima facie liable to pay ; and that the facts (i) that the drawer had become insolvent since the acceptance ; and (ii) that the drawer had not received value from the payee--were no valid defences to an action by the holder.6 On the other hand, Marius would seem to be of opinion that if the payee had not given value, and the drawer had satisfiedthe person who had given value, neither the payee nor subsequent indorsees could sue the drawer ; for the payee's right to sue was based, as it was abroad, on the fact that he was either the deliverer of the money to the drawer, or the principal or agent of such deliverer, or a creditor of the drawer by reason of some precedent debt.1 But it would appear that the acceptor remained liable to the drawer, and perhaps to subsequent indorsees.2 It is clear that much was still uncertain. Of the three main features of negotiability the bill of exchange was only just beginning to acquire one --the feature of ready transferability. But though its negotiable character was as yet in germ, it had began to develop in two other directions.

Footnote 1: The author was supported by the National Science Foundation of China under grant No. 1000010 The English Development

These two developments show us that in England, as abroad, the process is begun which will make the bill of exchange a form of paper currency.1 But as yet it is only begun; and we shall see that some of these developments tended to make English lawyers, whose acquaintance with these mercantile instruments was as yet slight, confuse the bill of exchange with those bills obligatory or bills of debt, to which the merchants were endeavouring to give somewhat the same transferability as the bill of exchange had acquired. Of this, however, I cannot speak till I have examined the process by which the bill of exchange was received into English law, and its negotiable characteristics developed by the courts of common law.

Footnote 1: Above 145.

(ii) _The recognition and development of the bill of exchange in English law._

It was the development of the action of assumpsit which gave to English lawyers a form of action well fitted to enforce many various kinds of mercantile contracts.2 In the latter part of the sixteenth century it occurred to some lawyers that it might be used to enforce the rights of the parties tc a bill of exchange. The first edition of Rastell's Entries, which was published in 1564, contains a pleading in which this attempt was made;3 and the second edition, published in 1670, contains two more precedents of the years 1595 and 1596.4 In Hernes book on pleading there is another precedent, taken from a court roll of the year 1586, in which a similar attempt was crowned with success;5 and in \_Martin v. Bourse_6 (1602)--the earliest reported case on a bill of exchange--assumpist was again acapted to enforce the rights of some of the parties, and again with success.

Footnote 2: Vol. iii 428 seqq;

Footnote 3: At f. roa, cited Street, Foundations of Legal Liability ii 34 n. r, and Cranch, Promisory Notes, Essays, A.A.L.H. iii 76-77; for this book see vol. v 384, vol. vi 683.

Footnote 4: Rastell, Entries ff., 338-3394.

Footnote 5: Here's Pleader (ed. 1657) 136-137, the reference given is Trin. r3 Eliza. Rot. mmxxi; for this book see vol. v 385.

Footnote 6: Cro. Jac. 6. 7 Above 137-140.

But these authorities show us that the statement, in the terms of assumpsit, of the rights of the parties to a bill of exchange, was as difficult for the common lawyers as the statement of these rights, in the terms of the Roman law of obligatio, was for the civilians." The precedent in Rastell's first edition sets out that one A had delivered money to B (the drawer); that in return for this money B had promised that one John of G. (the drawee) would pay a certain sum to Reginald S. (the payee), who was the factor of A; and if John of G. did not pay, that then B would do so; it then avers that the drawe and that, if he had done so, the money would have come to the profit of A ; and that B (the drawer) has refused to fulfil his contract by paying it. It is fairly clear that this is an action against a drawer by a deliverer of the money, who was in substance the principal of the payee.1 As we have seen, the payee's right of action was explained in a similar way by continental jurists.2 The pleadings in Rastell's later edition, and in Herne, are adapted to actions by a payee against an acceptor and a drawer respectively. All these later precedents are more explicit than Rastell's earliest precedent, in that the instrument is termed a " bill of exchange," and reference is made to the custom of the merchants. But they all state the cause of action in a somewhat similar manner. Thus the precedent in Herne's book alleges that W (the deliverer of the money and the payee) paid money in England to H (the drawer); that H in consideration thereof promised to pay to W at Hamburg a certain sum in two months time; that in fulfilment of this contract H gave to W "his bill of exchange made according to the use of merchants," whereby he directed his factor R (the drawee) to pay the money; that R promised to pay the money (i.e. he accepted the bill); and that in breach of his promise he had neglected to do so. The facts in the case of _Martin v. Boure_ are rather more complicated, and the pleadings as summarized in the report are somewhat obscure. But it would seem that the action was brought by the drawer against the acceptor for a failure on the part of the acceptor to pay, in consequence of which failure he (the drawer) had been obliged to pay to the payee.3

Footnote 1: Above I37.

Footnote 2: See Street, op. cit. ii 347.

Footnote 3: Cro. Jac. 306; as Street says, 03. cit. ii 348-349, " upon reference to pleadings in that case the reader will see what lengthy recitals could be pared off upon acceptance of the idea of duty arising from a custom of merchants."

It was shortly after the decision in this case that the pleaders adopted another and a much more satisfactory device for stating the rights of the parties. We have seen that, at the beginning of the seventeenth century, it was coming to be generally admitted that a general mercantile custom was a part of the common law.4 It followed that in these actions it would be sufficient to state the facts, and allege that the rights and duties of the various parties to the bill arose merely by virtue of this custom. This course was followed in \_Oaste v. Taylor_5 in 1612, and in all subsequent cases. In many of them the custom relied upon is stated at considerable length.6 At the end of the century a step further was taken in the direction of simplifying the pleadings. It was said that these The English Development 161 mercantile customs being part of the common law it was unnecessary to plead them specially.1

Footnote 1: 1: Williams v. Williams (1694) Cath. 169, 270: "'tis needless to set forth the custom specially in the declaration, for 'tis sufficient to say that such a person _scountum of driver and drawere._ The books would seem to show that their relations were based, either upon the fact that the drawee was the agent of the drawer,1 or that he is the debtor of the drawer.2

The English Development 163

cent of the sale of goods, is perhaps a sign that it is coming to be recognized that the bill operates as a conveyance as well as conferring contractual rights.1 But as yet this idea is new, and the courts have not grasped it firmly. Here, as in other cases, the courts were generally satisfied with stating that, by the custom of the merchants, the drawer is liable to the payee in the event of non-acceptance or of non-payment by the acceptor, and with giving effect to the custom. We trust wait till the following period for the more extensive use of the idea of warranty to explain the liabilities inter se of the various parties to a bill.2

Footnote 1: We have not yet described all the possible parties to a bill of exchange. There are also the rights of indorsors and indorsees, and of the bearer of a bill made payable to X or bearer. But their position I can best deal with under the next head.

(_it_) The negotiable character of the bill of exchange.

We have seen that the quality of negotiability includes three main peculiarities--(_a_) the mode of transfer; (_b_) the fact that the title of the holder is unaffected by defects in or the absence of title on the part of his transfactor; and (_c_) the presumption of consideration.3 The reports show us that, by the end of the century, all these peculiarities were beginning to be recognized.

(_a_) It was recognized that if $a$ bill was payable to X or order, or to X or his assigns, the bill could be transferred by indorsement and delivery;4 and further, that the indorsee could in like manner transfer his rights.5 On the other hand, a bill which was payable to X simply could not be so transferred.6 The rights of the indorsees depended upon the principle that each indorsement amounted in substance to the drawing of a new bill.7 The

### The Law Merchant

indorsee's right against his indorser therefore depended upon the same principle as the right of the payee against the drawer.1 The indorser by indorsing warrants that the indorsee shall be paid. From this principle two consequences flowed. In the first place, the last indorsee could sue any of the indorsers, as well as the drawer ;2 and, after some hesitation, it was held that each indorser could be made primarily liable on the bill, and not merely liable only in the event of the drawer failing to pay.3 In the second place, although a bill made payable to A simply did not admit of transfer, yet if A indorsed it to B, and B to C, C could sue B or A upon their indorsements.4

Footnote 1: Above 162-163. 2 Williams v. Field (1694) 3 Salk. 68.

Footnote 3: Holt, C.J., ruled in Lambert v. Pack (1700) 1 Salk. 127, that a demand on the drawer must be proved before the indorser could be used; this was dissented from in Harry v. Permit (171) 1 Salk. 133, and overluted in Bomley v. Frazier (1722) 1 Str. 441, on the ground that the delay so caused would impede the circulation of these bills; cp. Haylyn v. Adamson (1758) 2 Burr. at pp. 675, 676.

Footnote 4: Hill v. Lewis (1709) 1 Salk at p. 133-- The indorser of a bill which has not the words, _or to his order_, is good, or of the same effect betwist the indorser and the indorsee, to make the indorser chargeable to the indorsee."

It was only if a bill was payable to A or order or to A or assigns that it was transferable. It was held, after a little hesitation, that a bill payable to A or bearer was not so transferable.5 It was treated as a bill payable to A simply. It is true that if the bill were made payable to bearer, a payment to the bearer would discharge the acceptor;6 but the bearer could not sue on such a bill in his own name. He could only sue in the name of the person to whom the bill was payable.7 It is probable that the judges, when they laid down this rule, were influenced by the prevailing continental practice. We have seen that it was not till 1721 that the bearer was given a right of action in France;;8 and it was not till 1764 that it was clearly and finally laid down by the English courts, in the case of _Grant v. ?aughan_,9 that the bearer of a bill of exchange, made payable to A or bearer, had an independent right of action. This development was assisted by the fact that, long before that date, the Legislaure had allowed the bearer of a promissory note, made payable to bearer, to sue in his own name.10 The older cases do not, as we shall see, distinguish very clearly between notes and bills.11 It was thus possible to apply the law

## 16 The English Development

as to notes to bills ; and give to bills to bearer the same advantages that bills to order had previcusly enjoyed. 'It followed that, in the case of a bill to order indorsed in blank, the holder could sue as the bearer.1 He was no longer obliged (as he was in this period) either to fill up the blank and sue in his own name, or leave the blank not filled up and sue in the name of the indorser.2

Footnote 1: Peacock v. Rhodes (1781) a Dougl. a: p. 636: "I see no difference between a note indorsed blank, and one payable to bearer," \_p_or Lord Mansfield.

Footnote 2: Clark v. Pigot (1699) I said, 126--the plaintiff having a bill payable to himself or order indorsed it in blank and sent it to J.S. The money not having been paid, he sued the acceptor. Holt, C.J., said, " J.S. had it in his power to act either as servant or assigne : if he had filled up the blank space making the bill payable to him, that would have witnessed his election to have received it as indorse; but that being omitted, his intention is presumed to act only as servant to Clark."

($\\mathit{\\delta}$) It was during this period that the right of the bona fide holder for value to recover on a bill, notwithstanding a defect in or even an absence of title on the part of his transferor, was gradually gaining recognition. This feature of negotiability--the most important and the most characteristic of all its features - was not yet clearly defined. It was not yet clearly defined mainly because the rights of the bearer as such were not yet clearly recognized. We have seen that it rests ultimately upon the view that the acceptor, or other party liable upon the bill, has contracted to pay any one who is the bearer in the case of an instrument payable to bearer, or any bearer in whose favour an orcer has been indorsed on the bill in the case of an instrument payable to order.3 It is in the case of a bearer instrument that this most clearly appears, because the bearer cannot, as Mr. Street puts it,4 be treated " as an attorney or representative, or as taking by mee assignment an estate that had been vested in another." He must be treated " as taking his title directly from the grantor "; and the grantor must be treated as contracting directly with him. This view is clearly expressed in one of the cases of the late seventeenth century, in which the courts had adopted the view (maintained by the court of Chancery.5 but afterwards dissented from by the courts of common law 6) that the bearer of a note payable to bearer could sue :--" Iraditio tacit chartam loqui: and by the delivery; he expounds the person before meant; as when a merchant promises to pay to " the bearer " of the note, any one that brings the note shall be paid."7 It was not till the independent rights of the bearer were recognized by the cases decided in the latter half of the eighteenth century, that the rightsof the bona fide holder of a bill of exchange were so clearly recognized and explained.1

Footnote 1: As for instance in Peacock v. Rhodes (1781) 2 Dougl, at p. 636.

But even at this period, when it was only a bill payable to A or order or to A or assigns that was fully transferable, this element of negotiability was beginning to emerge. It was being reached by two different routes. In the first place, it was said that if A accepts a bill payable to B or order, it is a contract by A to pay either B or any assignee in whose favour B makes his order.2 That being so, the mere fact that A might have had some defence to an action on the bill if B had sued him, will not allow A to set up that defence if he is being sued by B's assignee. Thus in \_Hussey v. Jacob_3 it was said by Holt, C.J., that a bill of exchange, given to X or order for a gaming debt, and void under the statute of 16 Charles II. c. 7, could be sued on by X's assignee, at any rate if it had been accepted after the assignment.4 In the second place, this view of the superior rights of the assignee was assisted by the theory that each indorser of a bill of exchange in effect draws a new bill.5 It follows that he is liable to his indorsee irrespective of any weakness in his own position. Thus it was laid down in _Hill v. Leavis_,6 that, if a bill was drawn without words of negotiability, the drawer was not liable to an indorsee of the holder, but that the indorser was liable to the indorsee. Moreover, even if the bill had been forged, the indorser was liable.7 In both cases the indorser was liable on the new bill which he had drawn.

Footnote 2: 4: When a bill is payable to J.S. or order, there an express power is given to the party to assign, and the indorsee may maintain an action," Hodges v. Steward (1692) I Salk. I25.

Footnote 3: (1697) I Comyns 4.

Footnote 4: 4: If such a note was given to the winner or order, and the winner indorsed it to a stranger for a just debt, and the person upon whom the bill was drawn accepts it in the hands of the stranger, the acceptor would be liable," ibid at p. 6, _eer_ Holt, C.J.

Footnote 5: Above 163. 6 (1709) I Salk. I32.

Footnote 7: Lambert v. Pack (1700) I Salk. I27.

These cases go the length of deciding that the holder of a bill is not liable to be met by the defences which would be valid against his transferor. In other words, the bill is assignable free from equities. But suppose that the bill has been stolen, and that the holder has acquired through the thief--could not the acceptor refuse to pay, on the ground that the holder was not an assign at all? On the principles recognized at this period it would seem that he ought to have been able to refuse. Yet it was ruled by Holt in an anonymous nisi prus case that, if a bank bill payable to A or bearer (i.e. a non-negotiable bill) was .ost, and was found by X, who indorsed it to C, A could sue X in trover, but not C, " by reason of the course of trade which creates a property in the assignee or

## The English Development

Bearer."1 In other words, Holt again falls back on the custom of the merchants, without giving any explanation of the rule laid down. In fact, as I have said, no really satisfactory explanation could be given till the negotiability of bearer bills was recognized.

Footnote 1: (1699) I Salk. 126; above pp. 164, 165-166.

(_c_) In a bill of exchange drawn in the usual form the drawer always states that he has received value. Malynes tells us that the receipt of value was necessary to the validity of bills obligatory ;2 and the forms of bills of exchange show that this is also true of bills of exchange. But, from an early date, the statement on the face of the bill that value had been received, seems to have been regarded as creating a presumption in favour of the existence of a consideration;3 and it was held in 1714 that this presumption would arise whether or no the words "value received" were present.4 Such consideration, whether proved or presumed to exist, will give the holder the right to sue the acceptor or any of the other parties' liable on the bill. But it is now settled that if it can be shown that no consideration was ever given as between any of the parties, no action can be brought on the bill. It is not true therefore to say that no consideration is necessary for the validity of a bill of exchange; but it is true to say that there are two points in which the doctrine of consideration is applied to bills of exchange in a manner different: from that in which it is applied to other contracts. In the first place, the burden of disproving the presumption that consideration has been given is on the defendant; and, in the second place, if consideration has once been given for the drawing of the bill or in the course of its negotiation, the presumption that consideration has been given is irrebuttable.5 It follows that there is no need for consideration to move from the holder who is suing; and this exception from the ordinary rule was, as we have seen, technically justified by giving the holder, not an action of assumpsit, to succeed in which he would be obliged to prove a consideration moving from himself, but an action on the case.6 These results were not ascertained till after this period. As we have seen, the courts were inclined to explain the rights ofthe parties by reference to the custom of the merchants, and very rarely attempted to explain the principles upon which that custom was based.1 It was clear that the doctrine of consideration could not be applied to these bills in the same manner as it was applied to ordinary simple contracts. For instance, an acceptor was liable to an original payee or an indossee, though no consideration had moved from such payee or indossee to the acceptor. Holt, therefore, and many of the other judges, came to the conclusion that the bill of exchange was in the nature of a contract under seal. Just as the seal made the agreement valid though no consideration was present, so the custom of the merchants made the acceptor, drawer, or indorser liable.2 All through this period this was the prevailing theory. But it was contrary to the continental view of the law;3 contrary to the view taken by the merchants;4 and inconsistent with the ordinary forms of bills of exchange.8 The modern view was first laid down in connection with promissory notes. We shall see that the nagotiability of these notes was recognized by a statute of 1704.6 In 1721 two of the judges applied to these notes the doctrine that the bill was in the nature of a contract under seal; but the other two judges and the lord Chancellor held that the note was only a simple contract; " and notwithstanding the statute says that the money shall be due and payable by virtue of the noe, that only makes the note itself evidence of a consideration . though the note itself be evidence of a consideration, yet it is not conclusive evidence, but turns the proof on the defendant to show that there was no consideration given."7 This view was accepted by the courts of common law in relation to notes;8 and, though Lord Mansfield decided in favour of the opposite view in _Pillars v. Van Miepo_,9 the decision of the House of Lords in \_Rann v. Hughes_10 made it clear that a bill of exchange could not, merely because it was a written contract, be in the same position as a contract under seal.11 It followed that the principle applicable to notes was applicable to it.

**THE ENGLISH DEVELOPMENT 169**

(_iii_) Some peculiarities in the English law as to bills of exchange.

By the end of the seventeenth century the law as to bills of exchange was administered by the common law courts, and had become part of the common law. It was not administered in special mercantile tribunals, as was generally the case on the Continent.1 This had two important and permanent effects on the law. In the first place, the rule that the bill of exchange was only-valid as between merchants was obsolete by the end of the seventeenth century. In the case of _Bromovich v. Lloyd2_ Treby, C.J., summed up the result of the cases as follows: "Bills of exchange at first were extended only to merchant strangers trading with English merchants, and afterwards to inland bills between merchants trading with one another: here in England, and then to all traders and business men, and lastly to all persons whether traders or not." The first stage is represented in the work of Malynes, the second in the Tract of Marius, and the third is the result of the cases decided in the last quarter of the seventeenth century. In the second place, as the bill of exchange ceased to be used exclusively by traders, it came to perform a function other than that of enabling a person to pay a debt in a distant place. The rule still prevailing in France that "the place where a bill is drawn must be so far distant from the place where it is payable that there may be a possible rate of exchange between the two,"3 was disappearing as early as 1697." The result has been that "in England bills have developed into a perfectly flexible paper currency. In France a bill represents a trade transaction; in England it is merely an instrument of credit. English law gives full play to the system of accommodation paper; French law endeavours to stamp it out."4 We have seen that even in France it is recognized as performing some of the functions of a paper currency;5 but in England this function has been much more completely worked out, largely because these bills have not been confined to their original purpose of providing a method of avoiding the dangers of a physical transport of money." This difference was not fully apparent at the end of this period. Although a bill was coming to be regarded as a species of currency, it was quite clearly

### The Law Merchant

settled that it was not an absolute payment, unless the creditor chose to take it as such. It operated as a payment only if it was met at maturity ;1 and this is still the law.2 But the root of the difference between the English and the continental developments was present ; and if we look back at the law from the point of view of the present day we can clearly see its beginnings.

Footnote 1: Ward v. Evans (r702) 2 Ld. Rayn. g28, this was ruled as to notes ; Holt, C.J. said, "I am of opinion and always was (notwithstanding the noise and cry that it is the use of Lombard Street, as if the contrary opinion would blow up Lombard Street) that the acceptance of such a note is not actual payment ... when such a note is given in payment, it is always intended to be taken under this condition, to be payment if the money be paid thereon in convenient time"; in Hill v. Lewis (r799) Holt, C.J., seems to lay down the same rule as to bills of exchange, though the case concerned notes.

Footnote 2: Street, op. cit, ii 389-39r; of course it is otherwise if the instrument is accepted in full discharge, Vernon v. Boverie (163) 2 Shower 296.

Similarly the principles which underlie the various elements which go to make up the idea of negotiability had not been as yet clearly worked out. These various elements were in many cases justified by a reference to the custom of the merchants without being explained. But the underlying principles were often very near to the mind of the judges, and only awaited a clear statement. We shall now see that the task of making this statement in the following century, was materially helped by the somewhat peculiar history of the recognition of the negotiable character of the promissory note.

- _The pronissory note.3_

Footnote 3: On this topic see generally Cranc, Promissory Notes before and after Lord Holt, Essays A.A.L.H. iii 72-94; Street, op. cit. ii 363-372, 383-392.

In England, as abroad, the development of the negotiable character of the bill of exchange reacted upon the legal position of the note, or bill obligatory, payable to bearer.4 We have seen that the common law, in the sixteenth and early part of the seventeenth centuries, did not recognize the assignability which these instruments possessed according to the customs prevailing amongst the merchants.5 But in the latter part of the seventeenth century many of these mercantle customs had become part of the common law.6 The assignability of bills of exchange payable to order was fully recognized ;7 and many of the other rules relating to them were so contrary to the ordinary principles of the common law, that they could only be justified by a reference to mercantile custom. Could not mercantile custom do for these notes what it had done for the bill of exchange?

Footnote 4: Above r60-161, 7 Above 163-164.

Cases decided in the latter part of the seventeenth century show that the law

## The English Development 171

affirmative.1 Indeed it is clear, as Lord Mansfield once complained,2 that they did not distinguish between the inland bill and the promissory note. Both are often called bills of exchange in the pleadings 3 and in the reports ;4 and the bill introduced into the House of Lords to make bills of debt transferable, appears to have taken the view that inland bills of exchange were governed by the same rules as bills of debt, since it proposed to make them transferable like foreign bills of exchange.5 In one important respect, indeed, they closely resembled one another, and differed from the outland bill. Upon neither was a protest necessary as a condition of recovery against the drawer, till an Act passed in 1698 required a protest in the event of the non-payment of an inland bill of exchange.6 In fact, it was not till Holt's campaign against promissory notes, and the passing of the statute of 1704, that the distinction was clearly drawn.7 This being so, we are not surprised to find that the development of the law relating to promissory notes is very closely connected with the development of the law relating to bills of exchange. Thus a note payable to X or order was treated as assignable by indorsement and delivery, while a note payable to X or bearer was, after some hesitation,8 treated like a bill to bearer, as not assignable.9The Law Merchant

During the later years of the seventeenth century cases turning upon these notes came with increasing frequency before the courts. This was no doubt due to the growth of depositing money with the goldsmiths, who at this period were beginning to do the business of bankers.1 They issued these notes promising to pay the sum deposited, sometimes to a payee or bearer, sometimes to a payee or order. In 1704 Holt, C.J. said that the merchants agreed that they had been in use for some thirty years ; and that he remembered when actions upon them first began to be brought.2 But we have seen that in mercantile practice similar notes were much older.3 However, there is a sense in which Holt's statement is true ; their use by the goldsmiths, and their appearance in courts of common law, were not much older.4

Footnote 1: Below 185-186.

Down to the year 1700 the history of these notes had been uneventful. They were very generally confused with inland bills of exchange ; and it seemed as if they would silently assume the same negotiable character as those bills.5 But in that year, in the case of _Clerke v. Martin_,6 Holt, C.J. decided that a note payable to X or order was not a bill of exchange, and was therefore not negotiable. He said, " that this note could not be a bill of exchange, that the maintaining of these actions upon such notes were innovations upon rules of the common law ; and that it amounted to the setting up a new sort of specialty, unknown to the common law, and invented in Lombard Street, which attempted in these matters of bills of exchange to give laws to Westminster Hall. That the continuing to declare upon these notes upon the custom of merchants (which at the Bar was said to be the truth of the case). And of that opinion after divers motions were Pollexfen, Powell, and Rokesby . though upon the trial of the cause before Pollexfen at the Guildhall he then held the action well lay, this matter having been objected at the said trial "; Nicholson v. Sedgwick (r698) r Ld. Raym. 180 ; but, according to the report of Nicholson v. Sedgwick, in 3 Salk, 67, it was admitted that a note payable to order was negotiable ; and the same decision was come to in Carter v. Palmer (1701) r2 Mod. 380, Holt doubting ; but it would seem from Crawley v. Crowther (1702) r Freeman, Cases in Chy., at p. 258, that the common law view as to a bearer instrument was not followed in the court of Chancery ; see above r64 n. 5, 165.

Footnote 2: While 185-186, the most famous merchants in London had told him, it was very frequent with them to make such _notes_, and that they looked upon them as _bills of exchange_, and that they had been used for a matter of thirty years, and that not only _notes_ but _bonds_ for money were transferred frequently, and indorsed as _bills of exchange_."

Footnote 3: Above r47-150.

Footnote 4: Dudley North was away from England between 166r and r68o; his brother tells us, Lives of the Norths, ii r74, that, " He found divers usages in London very different from what had been practised in his time there . as first touching their running cash, which, by almost all sorts of merchants, was slid into goldsmiths' hands; and they themselves paid and received only by bills ; as if all their dealings were _in\_\_banco_. He counted this a foolish lazy method, and obnoxious to great accidents ; and he never could bring himself wholly to comply with it."

Footnote 5: See the cases cited above r71 nn. 1 and 4.

Footnote 6: 2 Ld. Raym. 757:

## 17 The English Development 173

proceeded from obstnacy and opinionativeness, since he had always expressed his opinion against them, and since there was so easy a method, as to declare upon a general indebitatus assumpsit for money lent." This case, as Holt himself admitted, caused a considerable outery in the mercantile world.1 But the decision was upheld in three subsequent cases ;2 and the merchants were obliged to get an Act passed to reverse them.3

Footnote 1: Buller v. Crips (1704) 6 Mod. at p. 30

Footnote 2: Potter v. Pearson, 2 Ld. Raym. 759; Buller v. Crips, 6 Mod. 29; Cutting v. Williams, 7 Mod. 155 ; though it was not followed in the Chancey, above 171 n. g. 3 3, 4 Anne c. g; the bill was presented 27 Jan., 1703, Commons' Journals siv., 3nz; it was committed Feb. 12, ibid 335, and reached its third reading Feb. 2, 1704, ibid goS; in the Lords it was appointed to be read a second time Feb. 8, 1704, and Holt, C.J., was ordered to attend, Lords' Journals xvi. 653 ; probably he was responsible for the additions made by the Lords, which in substance correspond to SSS 5, 7, and g of the Act ; these amendments were agreed to by the Lords on Feb. 15, ibid 664 ; the Commons accepted them and made further amendments on Feb. 22, Commons' Journals xiv 546, 674, which the Lords agreed to on the 26th, ibid 676.

Footnote 4: SS I.

Footnote 5: Burchell v. Slocock (1728) 2 Ld. Raym. 1545; but see Wain v. Bailey (1839) 6 Ad. and E. 676 where it was held that a plainit could recover on a lost note payable to himself simply ; it has been assumed that this means that such notes were not negotiable; see Thairwall v. G.N.R. \[rigo\] : K.B. at p. 519; but this seems contrary to the Act of Anne and the decision of Burchell v. Slocock ; but the point now has only an academic interest owing to the provisions of the Bills of Exchange Act, 1852, above 156 n. 5.

Footnote 6: Grant v. Vaughan (1764) 7 W. Black at p. 487, _fer_ Ld. Mansfield, C.J. : Goodwin v. Robarts (1875) L.R. to Ex. at p. 349, _fer_ Cockburn, C.J.

Footnote 7: Cranch, op. cit. 89-93 ; Street, op. cit. ii. 386, ${}^{\\circ}$ Above 176, 147-150,

Footnote 8: Burchell v. Slocock (1728) 2 Ld. Raym. 1545; but see Wain v. Bailey (1839) 70 Ad. and E. 676 where it was held that a plainit could recover on a lost note payable to himself simply ; it has been assumed that this means that such notes were not negotiable; see Thairwall v. G.N.R. \[rigo\] : K.B. at p. 519; but this seems contrary to the Act of Anne and the decision of Burchell v. Slocock ; but the point now has only an academic interest owing to the provisions of the Bills of Exchange Act, 1852, above 156 n. 5.

(1) Distinguished lawyers of the eighteenth and nineteenth centuries,6 and legal historians of our own days,7 have generally maintained that Holt's views were merely wrong-headed ; that they were historically false, and wholly opposed to the current of authority in his own time. There is much to be said for this view. Firstly, from an early period notes payable to bearer were recognized abroad, and possibly in England, as assignable by mercantile custom. They were certainly known to the English merchants from the sixteenth century onwards.8 Secondly, there are one or two decisions which recognized the existing mercantile custom, and treated these notes as being on precisely the same

### The Law Merchant

footing as inland bills of exchange.1 Thirdly, there is certainly one case in which Holt himself recognized the negotiability of bank bills.2 At the same time it is generally admitted that it is chiefly to Holt's decisions that we mist look for the beginnings of the modern law as to negotiable instruments.3 Why then should a man who was quite alive to the importance of commercial law, who by his decisions did much to settle the principles of many branches of that law, have gone out of his way to give decisions which were both bad in law, and injurious to the interests of the merchants?

Footnote 1: Above I71.

Footnote 2: (1698) Anon, I Salk, I26; S.C. I Ld. Raym. 738; I think it probable that the bank notes or bills in this case were either notes drawn payable to order in the form of bills of exchange, which Holt admitted to be negotiable ; or possibly they were bank of England bills; 5, 6 William and Mary, c. 20, SS 28, had provided for the issue of Bills by the Bank which could be assigned indentifulty by endorsement and delivery, and Holt would no doubt have regarded these bills as being in the same position as bills of exchange; it was the ordinary notes or bills of the goldsmiths, which merely acknowledged the receipt of money and promised to pay it, which were hit by his decisions; see Buller v, Cripps (1704) ( Mod. 29.

Footnote 3: " Though radically reactionary in dealing with promissory notes, in other respects he displayed much learning and judgment in deciding rights arising out of commercial transactions, and the law of bills is greatly indebted to him," Street, op. cit. ii 378; cp. Smith's Mercantile Law (17th ed.), Introd. lxxxi, n.; and see vol. vi 570-522.

It seems to me that Holt's decisions rested upon two chief grounds. In the first place, he had perceived, what most of his brother lawyers had not perceived, that there was a difference between an inland bill of exchange and a promissory note.4 It may be that the statute of 1698, which required a protest in case of the non-payment by the acceptor of an inland bill of exchange, had made the difference clearer.4 But, whether this be so or not, it is clear that Holt considered that assignability was the peculiar property of the bill of exchange annexed to it by law; that these notes were not bills of exchange; and that this was a mere attempt on the part of the "goldsmiths n Lombard Street ... to make a law to bind all those that did deal with them."6 He pointed out that the same object could be substantially effected by a bill of exchange drawn between two persons. In _Buller v, Cripps_ he said: 7 "Indeed I agree a _bill of exchange_ may be made between two persons without a third; and if there be such a necessity of dealing that way, why do not dealers use that way which is legal? . . as, if A has money to lodge in B's hands, and would have a negotiable _note_ for it, it is only saying thus: 'Mr. B. pay me, or

## 17 The English Development

order, so much money value to yourself'; and signing this, and B accepting it: or he may take the common note and say thus: 'for value received pay me (or indorsee) so much '; and good." The outcry of the merchants he considered to be mere " opinionativeness" seeing that they could do what they wanted by a slight variation in the form of their instruments.1 In the second place, Holt considered that a bill of exchange was a specialty;2 that no set of men could give to what was a simple contract the characteristics of a specialty; and that the attempt to do so, if acquiesced in, would mean that " Lombard Street would give the laws to Westminster Hall."3 The merchants had, as we have seen, told him that not only notcs but "bonds for money" were tracted by them as bills of exchange;4 and there is some evidence that they considered that a policy of insurance, when indorsed and transferred, " thereby became as good as a bill of exchange is."5 His view, therefore, was that ignorant laymen, without any real justification, were attempting to upset the true legal principle, which he had discovered, that the promissory note was a contract of a very different nature from the bill of exchange. They were persisting in their view, although they could have effected all their purposes by means of a bill of exchange. Such opposition aroused both his personal and his professional price, and fully accounts for the temper which he displayed on this occasion.

Footnote 1: Clerke v. Martin (1702) I Ld. Raym. at p. 758.

Footnote 2: Clerke v. Martin (1702) I Ld. Raym. at p. 758.

Footnote 3: Clerke v. Martin (1702) I Ld. Raym. at p. 758.

Footnote 4: Above 172 n. 2.

We have seen that Holt's view that the bill of exchange was a specialty (though held by many common lawyers) was eventually adjudged to be erroneous.6 But it seems to me that there was a good deal to be said in favour of the other ground upon which he rested his decision. There is no doubt that a promissory note is an instrument of a different nature from a bill of exchange. These promissory notes were of comparatively recent introduction into the common law. It is true that they had been long familiar to the merchants. But it would seem that they had only come into extensive use within the last thirty years;7 and they had assumed their negotiable characteristics in the common law courts under cover of a false analogy to the inland bill of exchange. It followed that, when the falsity of that analogy had been demonstrated, their supposed negotiable character disappeared.

Footnote 7: Above 172.

There was technical force in this argument--especially in the seventeenth century. Its fallacy lay in the assumption that even the most correct technical reasoning could stop the developmentof the new machinery rendered necessary by the new needs of an expanding trade. On the contrary, it was clear from the history of the bill of exchange that the law must adapt its technical rules to that machinery. But, once that adaptation had been made, Holt considered that the law had gone far enough. One form of negotiable instrument should suffice. Even in the nineteenth century substantially similar views have been held by distinguished judges.1 At the beginning of the eighteenth century the Legislature was obliged to intervene to correct this error : in the nineteenth and twentieth centuries the courts themselves have recognized its fallacy, and corrected it.2

Footnote 1: The author was supported by the National Science Foundation of China under grant No. 10

**BANKING**

We must now turn to the history of the closely allied topic of Banking.

**SS 3. Banking**

It was at one time thought that the earliest bank known to modern history was the bank of Venice, and that it was founded about the year 1170 to finance a state debt. But this opinion has been definitely disproved by the researches of Lattes and Ferrara.1 They show that it was the _campsores_, or money-changers, who were the earliest bankers; and that the same set of economic causes which gave rise to the bill of exchange, gave rise also to the institution of banking.2

Footnote 1: For an account of their work see C. F. Dunbar, Economic Essays 143 seqq.

Footnote 2: Above 12S-130.

We have seen that money wasentrusted to these _campsores_ for purposes of transmission, and that, by means of the machinery of the bill of exchange, both the _riss_ of transport 3 and the risk of receiving in payment defective or counterfeit coins were avoided.4 It was not long before their business extended itself in different directions. On the one hand, a merchant who had begun by entrusting a particular sum to a money-changer for purposes of transmission in a particular transaction, found it convenient to keep with him a sum on which he could draw whenever he needed to transmit money ; and others, besides merchants, found it convenient to deposit money with such a person for safe custody. On the other hand, the money-clanger was only too glad to get this money into his hands, and was willing to pay something to get it. He could lend it at remunerative rates to needy prices or to merchants. Thus the Italian money-changers gradually replaced the Jews as the financiers of Europe.5 The Caorsini, for instance, were the Pope's collectors; and they made large profits by lending the sums in their hands to needy borrowers,6 The English kings were large borrowers from various Italian houses;7 and Edward III., by his refusal to repay the money

### The Law Merchant

which he had thus borrowed, ruined the Peruzzi and the Bardi of Florence.1

Footnote 1: A History of Banking in all Natiors iii 217.

This development had taken place in Venice, and probably also in the other commercial cities in Italy, by the first half of the fourteenth century. "It is tolerably clear," says Dunbar,2 " that private banking in Venice began as an adjunct of the business of the _campsores_ or dealers in foreign moneys. In a city having a great and varied trade with many countries, these dealers necessarily held an important place. As early as 1270 it was deemed necessary to require them to give security to the government as the condition of carrying on their business, but it is not shown that they were then receiving deposits. In an Act of September 24, 1318, however, entitled 'Bancherii scriptae dent plegiarias consulibus,' the receipt of deposits by the _campsores_ is recognized as an existing practice, and provision is made for better security for the benefit of the depositors. Whether the title of this Act is contemporary or not, its text shows that somewhere between 1270 and 1318 the money-changers of Venice were becoming bankers, by a method similar to that by which the same class of men at Amsterdam a couple of centuries later, and later still the London goldsmihs, became bankers. More than once in the next half century, provision was made for some public oversight of the _campsores_, and in the Acts the term _bancherius_ and \_bancus_3 became frequent in what seems to be a technical sense."

Footnote 3: A is the derivation of the word see Oxford Eng. Dict., _sub voor_. Bank. It is there pointed out that it comes from _basco_ or _banca_ = a bench; this term was applied to a tradesman's counter or money-changer's table; hence it came to mean a money shop or bank, and in this sense passed from Italy to other countries. In Italy the word _Monte_ was sometimes used in the sense of bank; and some have thought that "bank " is a German rendering of _Monte_; but that is a mistake, as the German bank always = bench, and not a mound or heap; the fact is that " in the development of banking the _banco_ of the money-changer and _moute_ or joint stock capital were combined, and the term 'bank' applied in England to both "; we find "bank " used in its modern sense in England at the end of the fifteenth and the beginning of the sixteenth century.

Early in the fourteenth century, therefore, banks were being used to exchange, to remit, and to deposit money ; and the bankers were driving a thriving trade by investing the money which thus came into their hands. It is clear that their operations tended to encourage and develop trade. Not only did they obviate the risks of transport, or payment in bad coin, and of the custody of a large amount of precious metals : they also helped mercantile operations in two other very important ways. (1) In the conduct of trade they immensely facilitated the adjustment of accounts.

### The law merchant

fund--a _mons pietatis_--to finance the poor, and to deliver them from the clutches of the usurer.

It is clear, therefore, that in Italy in the sixteenth century banks had come to play a very important part in the economic life of the state. Their utility to the state itself and to all classes of persons in the state was obvious. But both their importance and their utility made some measure of state control necessary, both in the interests of its subjects and of the state itself. The history of banking at Venice shows that it was very necessary to legislate in the interests of the bank's customers. Thus it was found necessary to prohibit the bankers from making certain kinds of investment,1 to appoint inspectors of banks,2 to prescribe the times at which bankers must attend to make payments to their customers,3 to make it an offence to refuse to pay cash on demand.4 But these measures were not very successful. In 1584 it was said that of the 103 banks which had started business in Venice, 96 had come to a bad end.5 The remedy was found in creating a State Bank of Venice in 1587 to receive cash deposits.6 With these deposits there was to be no trading. They were retained in specie by the bank ; and the expenses of the bank were met by a duty on imports. All mercharts were practically compelled to keep an account at the bank, by the provision of a law, passed in 1593, that all bills of exchange drawn at or upon Venice must be paid by a transfer in bank.7 The accounts of the bank were kept in bank money, which was 20 per cent. more valuable than the current coin.8 This bank money, as Adam Smith explained in reference to the similar bank of Amsterdam, was always more highly prized, because it " represented money exactly according to the standard of the mint," because it was secure from fire, robbery, and other accidents, and because it was easily transferable.9 Thus the bank of Venice provided for the transmission of

## 10.1 Banking

In this section we will discuss the basic properties of the market, and the properties of the market.

### 10.1 Banking

The bank of Banking is a bank of a similar bank, and it was called the bank money, which is a bank of a similar bank. The bank of Banking is a bank of a similar bank, and it was called the bankThe law merchant

business was done at the great fairs, were almost the only ones who had survived.1

Footnote 1: The law of the law of the law of the law of the law of the law of the law of the law of the law of the law of the law of the law of the law of the law of the law of the law of the law of the law of the law of the law of the law of the law of the law of the law of the law of the law of the law of the law of the law of the law of the law of the law of the law of the law of the law of the law of the law of the law of the law of the law of the law of the law of the law of the law of the law of the law of the law of the law of the law of the law of the law of the law of the law of the law of the law of the law of the law of the law of the law of the law of the law of the law of the law of the law of the law of the law of the law of the law of the law of the law of the law of the law of the law of the law of the law of the law of the law of the law of the law of the law of the law of the law of the law of the law of the law of the law of the law of the law of the law of the law of the law of the law of the law of the law of the law of the law of the law of the law of the law of the law of the law of the law of the law of the law of the law of the law of the law of the law of the law of the law of the law of the law of the law of the law of the law of the law of the law of the law of the law of the law of the law of the law of the law of the law of the law of the law of the law of the law of the law of the law of the law of the law of the law of the law of the law of the law of the law of the law of the law of the law of the law of the law of the law of the law of the law of the law of the law of the law of the law of the law of the law of the law of the law of the law of the law of the law of the law of the law of the law of the law of the law of the law of the law of the law of the law of the law of the law of the law of the law of the law of the law of the law of the law of the law of the law of the law of the law of the law of the law of the law of the law of the law of the law of the law of the law of the law of the law of the law of the law of the law of the law of the law of the law of the law of the law of the law of the law of the law of the law of the law of the law of the law of the law of the law of the law of the law of the law of the law of the law of the law of the law of the law of the law of the law of the law of the law of the law of the law of the law of the law of the law of the law of the law of the law of the law of the law of the law of the law of the law of the law of the law of the law of the law of the law of the law of the law of the law of the law of the law of the law of the law of the law of the law of the law of the law of the law of the law of the law of the law of the law of the law of the law of the law of the law of the law of the law of the law of the law of the law of the law of the law of the law of the law of the law of the law of the law of the law of the law of the law of the law of the law of the law of the law of the law of the law of the law of the law of the law of the law of the law of the law of the law of the law of the law of the law of the law of the law of the law of the law of the law of the law of the law of the law of the law of the law of the law of the law of the law of the law of the law of the law of the law of the law of the law of the law of the law of the law of the law of the law of the law of the law of the law of the law of the law of the law of the law of the law of the law of the law of the law of the law of the law of the law of the law of the law of the law of the law of the law of the law of the law of the law of the law of the law of the law of the law of the law of the law of the law of the law of the law of the law of the law of the law of the law of the law of the law of the law of the law of the law of the law of the law of the law of the law of the law of the law of the law of the law of the law of the law of the law of the law of the law of the law of the law of the law of the law of the law of the law of the law of the law of the law of the law of the law of the law of the law of the law of the law of the law of the law of the law of the law of the law of the law of the law of the law of the law of the law of the law of the law of the law of the law of the law of the law of the law of the law of the law of the law of the law of the law of the law of the law of the law of the law of the law of the law of the law of the law of the law of the law law of the law of the law of the law of the law law of the law of the law of the law law of the law of the law law of the law of the law law of the law of the law law of the law of the law law of the law of the law law of the law law of the law law of the law law of the law law of the law law of the law law of the law law of the law law of the law law of the law law of the law law of the law law of the law law of the law law of the law law of the of the law law of the law law of the law law of the of the law law law of the of the

## 18 Banking

have their factors in all the great trading centres of Europe, and keep account with every man whose money they have received. By means of entries in the bankers' books, large sums of money can easily be paid and received. They pay out money on demand, and remit it to foreign countries for their customers by means of bills of exchange. The money in their hands is employed in many ways--in "dealing with great princes and potentates that have need of money for the maintenance of their wars," in ingrossing commodities and in fixing rates of exchange for different places. These rates were sometimes excessive, "wherefore the city of Amsterdam (to countermine them) have in the year 1608 also erected a very great bank, for which the said city hath undertaken to answer, whereby they are always stored with money, as appeareth, that the same is plentifully to be had at interest, at six and seven in the hundred by the year, and some at five and under." We shall see that this possibility of getting cheap money through a bank guaranteed by the state was one of the reasons for the foundation of the Bank of England.1

Footnote 1: Below 1S9.

It is not surprising to find that in England, from the latter part of the sixteenth century, the advantages of establishing a public bank, of the kind familiar on the Continent, was pressed upon the Government. A proposal to establish banks "for the relief of common necessity" was introduced into an abortive bill on the subject of usury in 1571.2 In or about 1576 one Stephan Parrotte proposed to establish a public tank;3 and in 1581 Christopher Hagenbuck and his partners, who were probably Italians, had put before the Queen and Council & project for the establishment of such a bank.4 In 1622 Sir Robert IIcath made a similar proposal;5 and in 16276 we hear of a suggestion for the "formation of a national bank, or treasure permanent to be lent out at 5 per cent., to enable merchants to traffic, gentlemen yeomen and husbandmen to till their grounds, and artifcers to work and trade"--the capital stock to be raised by taxation. In 1636 Philip Burlamachi proposed the establishment of a bank through which the payment of all large sums should be made;7 and in 1641 Sir Balthasar Gerbier suggested the establishment of banks which should others ..., and making payment thereof by assignation, and passing each man's account from one to another with much facility and ease, and saving much trouble in receiving and paying of money, besides many suits in law, and other losses and inconveniences, which do much hinder trade."

Footnote 1: Below 1S9.

Footnote 2: Nawney and Power, Tudor Economic Documents iii 37o-377.

Footnote 3: S.P. Dom. 1581-1590, 3t, cl. 73; the petition is in Italian; Bacon, in 1612, mentions projects to establish a Bank of Exchange which should be able to lend money to traders, Letters and Life (Ed. Sedding) iv 325.

Footnote 4: S.P. Dom. 169-1623, 386, cxxx 28-32.

Footnote 5: Ibid r627-1628, 493-194, lxxxx 17.

Footnote 6: Ibid t636-1637, 73, cccxxix 34.

Footnote 7: Ibid t636-1637, 73, cccxxix 34.

Footnote 8: The 1627-1628 is a 1627-1628, 493-194, lxxxx 17.

Footnote 27: Ibid t636-1637, 73,The Law Merchant

combine pawnbroking with banking business.1 In 1661 Sir Gerbier D'Ouvilly described the advantages of establishing a "Bank of Exchange,"2 which was to have its own "bank money," and power to lend on real estate. In 1673-1674 one Thomas Newcome wrote a pamphlet advocating the establishment of banks of credit, at which all payments by and to the crown should be made. Those receiving money in this way were to be able to assign the amount credited to them by the bank ; and for debts payable by the king, bills of credit should be issued, which the crown should receive in payment of debts due to it, and should " pass under the name of check or bank money."3 The advantages of such an undertaking were very clearly pointed out in a paper written by S. Lamb, a merchant, in 1659, and entitled " Seasonable Observations."4 In many economic matters the Dutch were pointed to as an example at this period ; and Lamb begins by showing how much their trade had benefited by their public banks.5 He then pointed out that such a bank in England would increase trade, as it would enable money to be borrowed by industrious merchants at reasonable rates ; and that this would tend to keep good men from failing.6 It would guard against the risks of the transport of money, and the risks of being paid in bad or depreciated money.7 It would provide an easy method of paying debts by the simple process of entry in the bank's books.8 He therefore proposed that such a bank should be established, and that a society of merchants, to be chosen from the various companies of merchants, should be appointed to manage it.9 Any one who wished was to be at liberty to deposit his money there, and to have it again on demand.10 The bank was to have the power of issuing paper money ; and all bills of exchange were to be received and paid there.11 The expenses of management were to be defrayed from the profits, and any surplus was to go in augmentation of the bank's capital. There was to be a branch to do a pawnbroking business on reasonable terms.12 In 1676 a "Bank of Credit," which should lend money to merchants, was proposed, and actually founded ; but it failed.13

## 18 Banking

But, though no public bank was established, the exigencies of trade, and the convenience of a bank as a place for the safe custody of money, led to the growth of a system of private banking. This business was not a definitely organized and a separate business in Elizabeth's reign.1 It was not then definitely connected with the goldsmiths,2 but rather with the scriveners3 and the clothing and woollen trades.4 But it was eventually monopolized by the goldsmiths. The nature of their trade compelled them to deal in the precious metals; and early in the seventeenth century they seem to have begun the business of exchanging money.5 An attempt was made to stop them from exercising the business of exchange in 1627,6 but it was ineffectual. Without ceasing to exercise either of these two branches of their business,7 they added to it, possibly before the middle of the seventeenth century,8 the business of receiving money for safe custody, and receiving the rents of gentlemen's estates.9 On this money they allowed interest,10 and made large fortunes by lending it to the government or to private persons.11 in the same year Yaranton proposed a bank" in each important trading centre based on land security and dependent on a register of titles," Scott, op. cit. i, 293.

Footnote 1: The author was supported by the National Science Foundation of the United States of America.

The Law Merchant

This banking business became well established in the mercantile world soon after the Restoration; and the king, instead of dealing as before with the city of London or with individual merchants for a loan,1 applied to these goldsmiths or bankers.2 It gradually became the custom for private persons to deposit their cash with them; and no doubt the way in which the bankers met their liabilities, during the run upon them occasioned by the disastrous Dutch war of 1667, helped to make the practice still more usual.3 Indeed, it possessed such obvious advantages that not even the closing of the Exchequer in 1672 seriously affected it. The only effect which it had was to impess, both upon the goldsmiths and their customers, the idea that the less they had to do with the government the better it was for them.4 "The public did not trust their money with them unless they were certain that they had nothing to do with the government."5

Footnote 1: The author was supported by the National Debt, 407-402, 417-402, 417-402, 417-402, 417-402, 417-402, 417-402, 417-402, 417-402, 417-402, 417-402, 417-402, 417-402, 417-403, 417-404, 417-404, 417-405, 417-406, 417-407, 417-408, 417-409, 417-403, 417-404, 417-406, 417-407, 417-408, 417-409, 417-409, 417-409, 417-410, 417-411, 417-412, 417-413, 417-414, 417-415, 417-416, 417-418, 417-419, 417-419, 417-418, 417-419, 417-419, 417-419, 417-418, 417-41

### 188 The Law Merchant

rates of interest to necessitous persons and to the government. " These and a hundred other practices they have used and do still continue, in contempt of Law and Justice, whereof they are so conscious to themselves, that most of them do once a year (at least) sue out their general pardon, to avoid the penalty of those wholsom laws made to prevent such frauds, oppressions, contempt of government, and mischiefs to the public as they are dalyly guilty of."

It was not until after the Revolution that a public bank, similar to the public banks of the Continent, was established in this country. In 1694 the Bank of England was established.1 It was originally, as Bagehot says, a "Whig finance company."2 The Ways and Means Act of 16943 provided that the subscribers to a loan of 1,200,000 to the government should be incorporated under the title of the Governor and Company of the Bank of England.4 The bank was to have the power of dealing in bullion and bills, of issuing assignable notes, and of lending on merchandise.5 But it could not trade with its own securities, or buy or sell goods, wares, or merchandise.6 The bank, therefore, did not follow the models of the banks of Venice or Amsterdam. Those banks, at least in the first centuries of their existence, actually kept in specie all the money deposited with them. Their notes represented actual money in their possession.7 The Bank of England, on the other hand, followed the system of banking developed by the goldsmith. " It purported to give in its bills the equivalent of what it had received, but it never pretended to take the deposit for any other purpose than that of trading with it. It never professed to make its issues square exactly with its coin and bullion, though of course it made its liabilities square with its assets, plus the capital of its shareholders, and in time, plus the reserve also, i.e. its accumulated and undivided profits.

### 190 The Law Merchant

exchange will be added the instrument by which a person orders a banker to pay--the cheque of modern law. To the promissory note will be added the instrument in which the banker promises to pay--the bank bill or bank note. With regard to these instruments, three questions had already risen : (i) how far were they negotiable ; (ii) how far would their acceptance operate to discharge a debt ; and (iii) what was the obligation of the banker who had given such a note to a customer ?

(i) There is no doubt that, from the first, the order given by a customer to the banker to pay was regarded as a bill of exchange, and therefore negotiable ;1 and at the present day the Bills of Exchange Act defines the cheque, by which this is now effected, as "a bill of exchange drawn on a banker payable on demand." 2 Cheques being treated as bills of exchange, non-payment by the banker gave a right of recourse against the drawer, unless he had accepted it in full discharge of the debt.3 Side by side, therefore with the bill of exchange, we get a similar instrument which will eventually become the modern cheque. On the other hand, the bank bill or bank note, by means of which the depositor proved, his right to the sum deposited with the banker, was in substance a promissory note. This deposit note, bank bill, or bank note was originally given for the whole sum deposited, and if any of it was paid off, the amount so paid off was marked on the original note,4 " By an improvement on the original system, the receipt for the gross deposit might be sub-divided ; it was only one step further . to give, instead of a single promise to pay the entire sum, a series of promises to pay a number of smaller sums making up the total of his customer's deposit."5 These notes given by a banker

## 12 Banking

might represent not only an actual deposit, but a sum which the banker had agreed to lend to a borrower. Because they were in substance promissory notes, they were treated by Holt as not negotiable ; \[1\] and only became negotiable by the Act of 1704. \[2\] It is true that there is one case in which apparently Holt treated them as negotiable ; \[3\] and, as we have seen, we must explain that case, either by supposing that the notes in that case were drawn as bills, or that they were Bank of England notes, which were considered to have been made negotiable by the Act of 1694. However that may be, there is no doubt that their negotiable character was finally fixed in 1704. \[(ii)\] Neither a cheque nor a note operated as payment until it was honoured \[4\], unless it was accepted in full discharge of the debt. That it was so accepted was somewhat easily proved ; \[5\] and it might be presumed if persons to whom it was delivered delayed to demand payment \[6\]. But such delivery was not in itself payment ; and if a servant or agent were directed to obtain payment, he was not thereby authorized to take a ncte of this kind \[7\]. It is only as a result of legislation \[8\] that Bank of England notes are legal tender (except as against the bank), and therefore operate as absolute payment. It is true that, in the latter part of the seventeenth century, the merchants said that it was their custom to treat the receipt of these notes as absolute payment \[9\]. But Holt decided, and, except in so far as it has been modified by the Legislature, it is still the law that payment by cheque or bank note is not absolute payment \[10\], unless it can be inferred that the parties have agreed to take it as such payment \[11\].

### 12 Above 172. \[ 3. 4 Anne c, g ; above 173. \[ 4\]\]

When such a note is given in payment, it is always intended to be taken under this condition, to be payment if the money be paid thereon in convenient time \[7\]. Ward v. Evans (1704) 2 Ld. Raym. at p. gio _der_ Holt, C.J. ; later it was held that if bank notes were offered and no objection was made, these would be a good tender, i.e., the presumption was in favour of payment, Wright v. Reed (1790) 3 T.R. 554; the fact that they could be objected to shows that they were not regarded as cash. \[ 5\] Vernon v. Boverie (1683), Cooksey v. Boverie (1693) 2 Shower K.B. 296-297. \[ 6\] Ward v. Evans (1704) 2 Ld. Raym. at p. gio _der_ Holt, C.J. : " If the party who takes the note keep it by him for several days without demanding it, and the person who ought to pay it becomes insolvent," it would operate as payment. \[ 7\] Ward v. Evans (1704) 2 Ld. Raym. at p. 330. \[ 8\] 3 and 4 William IV. c. 98 8 6; Wright v. Reed (1790) 3 T.R. 554 _fer_ Buller, J. \[ 9\] " The notes of goldsmiths (whether they be payable to order or to bearer) are always accounted among merchants as ready cash, and not a\* bills of exchange," Tassell and Lee v. Lewis (1696) 1 Ld. Raym. at p. 744: \[ 10\] Ward v. Evans (1704) 2 Ld. Raym. at p. 330; cp. Hopkins v. Geary (1702) referred to in Tassell and Lee v. Lewis 1 Ld. Raym. at p. 744; as Mr. Street says, the usage to consider these notes as absolute payment " may have been at the point of maturing into a custom, but Ward v. Evans settled the law the other way \[7\]. Principles of Legal LIability if 397; Holt's decision would seem to have been in substantial accord with the continental practice as stated by Marquardus, above t82 n. 4; though possibly the presumption of payment was stronger on the Continent, and therefore more like the law contended for by the merchants in Tassell and Lee v. Lewis, see last note. \[ 11\] Above 170 n. 2,The

## 10 Commercial Associations 193

settle their position in the legal system or to evolve rules to regulate their activities.

In this section, therefore, I must discuss chiefly the origins of these commercial societies, corporate and unincorporate, and the form which they had assumed at the end of this period. I shall deal with this subject under the following three heads : firstly, early forms of commercial association ; secondly, the application of the corporate idea to commercial societies ; and, thirdly, the commercial companies and partnerships of the seventeenth century.

### Early Forms of Commercial Association

The two early forms of commercial association which have left their traces upon the later law are (1) the gild, and (2) the medieval contract of partnership.

(1) Gilds formed for many varied purposes--religious and social as well as commercial--had existed from Anglo-Saxon times.1 It is in the Gild Merchant, which appears soon after the Norman Conquest,2 that we get the earliest association for strictly commercial purposes ; and, later, we see the rise of the various trade gilds.3 There are many traces of the influence of these gilds upon the trading companies of the sixteenth and seventeenth centuries. Their governing bodies often consisted of a governor and associates ; and it is this form of organization that the commercial companies of the seventeenth century adopted.4 In order to attain the objects for which the gild was formed it was often necessary for them to pass bye-laws,5 and to keep and audit accounts.6 This power and duty is often specifically mentioned in the charters of the regulated 7 and early joint stock companies.8 There was a very close fellowship amongst the members of these gilds. They might be required to share their purchases with their fellows ; and, later, the gild would sometimes appoint persons to purchase goods, which were then divided among the members.9 Dr. Scott has pointed out 10 that "some of the early \[joint stock\] companies, instead of paying what would now be called a dividend,

### 104 The Law Merchant

made a division of commodities to the members. This was proposed in the case of the Society of the Mines Royal (1571); it was a common practice of the East India Company in the first half of the sixteenth century ; and it was the rule of the Ayr and Newmills cloth manufactories from 1670 to 1713. If it be supposed that the officials of the gild collected the funds from the members before the goods were delivered to them, the transaction resolves itself in its essentials into a joint stock followed by a commodity division." The very closeness of this fellowship left its mark both upon the conditions of the membership and the ceremonial of these gilds. Membership came generally by birth or apprenticcship ; the members must take an oath of fidelity ; they were penalized if they did not attend meetings ; on fixed occasions there were feasts.' We can see some of these characteristic features in the early trading companies ; for instance, the conditions upon which membership in the East India Company could be obtained were defined in 1615, and favour was shown to relations or dependents of members ; 2 the purchaser of a share in that company was for a long t me obliged to take an oath on admission ; 3 and there were penalties for absence from meetings and disorderly conduct.4

Footnote 2: The author is grateful to the anonymous referee for his comments on the manuscript.

Footnote 3: The author is grateful to the anonymous referee for his comments on the manuscript.

It is, of course, in the earlier history of the commercial companies that the influence of the gild tradition is most clearly marked ; it is more apparent in the regulated than the joint stock companies, because their objects were less strictly commercial ; and it affects their organization, and their forms and ceremonies, rather than the manner in which they conduced their trade. More exclusively commercial influences come from the medieval contract of partnership.

(2) Right down to the seventeenth century, the relations of partners inter se maintained something of the old gild tradition, in the idea that there was about them a connotation of brotherhood.

## 10 Commercial Associations

The association is a "companhia."1 The members are "companions," and have inter se the _beneficium competentie_.2 Indeed, some primitive forms of non-commercial partnership in early French law,3 and perhaps in early Roman law,4 are hardly distinguished from gills. But such forms of partnership died out. In a primitive age they were apt to facilitate disorder ; and, when the state was beginning to make its supremacy felt, it frowned upon them.5 It is the commercial partnership that survived and developed with expanding trade ; and, in the Middle Ages, it took two chief forms, both of which have left their marks upon the commercial societies of our modern law. The first of these forms was the _commenda_, the second the _scocietas_.

Footnote 1: See Blancard, Documents indets sur le commerce de Marseille au moyea age. In this collection of thirteenth century documents this word is usually used in conjunction with the word _scocietas_ to distinguish it from a _commenda_, see e.g. 1 364, 405, 406; ii 231, 232, 269. The following is an example from 1248 : "Ego Petrus Anglicus, pelerius, confoteer et recognose tip Petrole et civil Massili ze, me habiusse et recognise in societate et ex causa societatis a te xv r l regalium coronatum, reunemals, etc., _quam companhia_ debepo teme earlayam," etc., ibid 333.

Footnote 2: See Blancard, Documents indets sur le commerce de Marseille au moyea age. In this collection of thirteenth century documents this word is usually used in conjunction with the word _scocietas_ to distinguish it from a _commenda_, see e.g. 1 364, 405, 406; ii 231, 232, 269. The following is an example from 1248 : "Ego Petrus Anglicus, pelerius, confoteer et recognose tip Petrole et civil Massili ze, me habiusse et recognise in societate et ex causa societatis a te xv r l regalium coronatum, reunemals, etc., _quam companhia_ debepo teme earlayam," etc., ibid 333.

Footnote 3: "For specimens, see Blancard, op, cit, _passim_; sometimes the _commendatarius_ was given a half share of the profit ; see e.g. ibid ii 180, 217, 218.

Footnote 4: The clause "ad fortunam Dei .

The _common_, which is the _common_, is the _common_, which is the \_common

## 1 Commercial Associations 197

--could be more readily carried out. Fourthly, at the beginning of the eighteenth century legislative opinion was hostile to the limitation of liability, which was the essential feature of the _commemada_.1 But it was through the _commenda_ that the idea of a society in which the capitalist could invest and limit his liability came into the commercial law of Europe ; and, although it left no direct descendant in England, the influence of this idea indirectly affected the form of the commercial societies which in England and elsewhere emerged in the seventeenth century.

Footnote 1: Below 203-205. : Above 194-195.

(ii) \_The Societas.--\_The _commenda_ was originally a temporary association of two or more persons to carry out a particular commercial transaction ; and the relations between the parties to it were purely commercial. The _scicetas_, on the other hand, was a more permanent association ; and, as we have seen, the idea that partners were in some sense brothers lived long in the law.2 Though the latter idea tended to evaporate, the former did not. It may, indeed, be sometimes difficult to distinguish some of the later forms of _commenda_ from a _scicetas_ ; but they were always treated as quite distinct transactions;3 and the distinction tended to grow more marked by reason of the consequences which the law deduced from the solidarity and permanence of this type of association. Thus the law gradually came to the conclusions, firstly, that each partner represented the others, and could bind the others by his contracts made on behalf of the firm ;4 and, secondly, that each partner was personally liable without any limitation to all the creditors of the firm.5 The closeness of the tie which united the members of the _scicetas_ is illustrated by the fact that it often tradedunder a collective name.${}^{1}$ " Bartoius proves that in his day the formula _'Titius et socii_ was already well established, and that its use entailed the joint and several liability of all the partners, even if they were not individually named."${}^{2}$ Clearly we are on the high road to the view that the firm is a legal person distinct from its members.${}^{3}$ Scaccia maintains this thesis ;${}^{4}$ and the law of Scotland, which has been more influenced by continental law than English law,${}^{5}$ has adopted it.${}^{6}$ That English law never came to this conclusion is due to somewhat the same causes as prevented it from recognizing the _societe en commandite_.${}^{7}$ The corporate company was more convenient than an unincorporate society of this kind. The lawyers, in spite of the fact that their own Inn3 of Court were unincorporated societies, found it difficult to recognize as a separate person any body which was not incorporated ; and, as we shall see, the history of the commercial societies of the seventeenth century,${}^{8}$ and the action of the Legislature at the beginning of the eighteenth century,${}^{9}$ tended to stiffen and confirm this attitude of the common lawyers. But, for all that, the idea of a permanent commercial society, which is almost a distinct legal person, has influenced both the companies and the partnerships of our later law. The advantages of a solidarity, which draws a clear line between the firm and the individuals composing it, was a powerful influence which led merchants to wish for the corporate form. And, if they could not attain this form, and merely associated as an unincorporate firm, the ideas that each member of the firm is the other's agent, and that their liability is unlimited--ideas which were the conse

## 10.11 Corporate Societies

The _social_ -- have _def their mark on our modern law of partnership_.1

Footnote 1: The incidents of the modern contract o'partnership were fashioned by equity during the eighteenth and nineteenth centuries ; a few rules had begun to be developed during this period, below 217-218, 242-243; but its history belongs, like that of many other branches of equity, to the following period

Towards the end of the sixteenth century it was clear that, for the attainment, either of the objects of the _societies' en commandite_, or of the objects of the larger specimens of the _societas_, the corporate form was desirable. With the effects of the application of this legal conception to commercial societies in England we must now deal.

_The Application of the Corporate Idea to Commercial Societies_

Before the beginning of the sixteenth century English law had acquired some knowledge of the ideas involved in corporate personality ;2 and during the sixteenth and seventeenth centuries considerable progress was made in the development of the law on this topic.3 The value of the application of this legal conception to the older unincorporate bodies which regulated trade was soon apparent. It led to better government and a closer organization ; and these advantages were especially needed in the foreign trades in which Englishmen were beginning to claim a share.\] From the last years of the fourteenth century onwards, kings made extensive grants of powers and privileges to companies of merchants trading abroad. " In 1391," says Mr. Carr,4 " Richard II, empowered the English merchants in Prussia to meet and elect a governor, who was to rule over the traders, do speedy justice, settle disputes, and award compensation. Reasonable ordinances, pro meliori gubernatione, made in proper form with the common assent, were confirmed; and all and singular the said merchants were bidden to be helpful. Within the following twenty years Henry IV. gave similar privileges to the Havre Merchants, and to the merchants trading to the Netherlands and to Norway." And there are similar grants made at about the same period to the Merchant Adventurers and the Eastland Company.5 The privileges granted to the companies trading

### 200 The Law Merchant

abroad in the sixteenth century follow these precedents. The grant to the Merchants of Andalusia in 1505 is similar to these earlier grants ; and, as in the earlier grants, nothing is said about giving corporate form to their associations of merchants.1 But that was in substance what was done ; and in later grants to some of these old companies, and in the grants to the new companies, they are expressly incorporated, and the consequences of incorporation are set out.2 But the actual privileges given, and the powers to organize the trade, do not materially differ from the older grants ; and in some of the clauses of these charters, and in many of the observances of the companies, we see traces of an old gild to which more precisely defined powers and a corporate form have been given by royal charter.3 And as it was with foreign trade so it was a little later with domestic trade. Some of the older gilds and companies, which exercised disciplinary powers over their particular trade, reappear, in substance, if not in name, as corporate bodies--to which the Crown or Parliament have given large powers of controlling their particular trade.4

Footnote 1: Carr, op, cit. r-3.

Footnote 2: See e.g, the Charter of the Levant Company (r60r), Select Charters of Trading Companies (S.S.), 32 : " that they (the merchants before named) and every of them forever henceforth be and shall be one body corporate and politic in deed and in name by the Governor and Company of Merchants of London trading into the Levant seas ; and them by that name one body corporate and politic in deed and name really and fully for Us our heirs and successors We do erect make ordain constitute and declare by these presents." Then follow clauses allowing them capacity to hold and alienate lands, to plead and be impleaded in the corporate name, and to have a common seal.

3Above 193-194 ; cp, a clause in the charter of the King's Merchants of the New Trade (r61r6), which also appears in the Merchant Adventurers' Charter of r564 (Select Charters (S.S.) 86), which gives power to the Governor and Assistants to admonish members of the company to come to the assemblies of the company, and if they do not appear, to fine and imprison them. The charter of the Mines Royal (r568) (ibid r2, 13) gives power to correct and punish by fine and imprisonment those who disobey the orders of the society ; the same charter (ibid r2) gives jurisdiction over the " causes differences variances controversies and complaints " of the " ministers officers labourers and workmen of the said corporation."

4: The privileges of some of these oider associations were saved when a charter was granted to a new company. Thus, when the Royal Lutesting Company was given a charter in r693, the privileges of the Weaverrs' Corporation were saved, Select Charters (S.S.) 233, 234; for those older associations and their powers sec vol. ii 39r, 466-467; vol. iv 321-322.

5: The need for this organization was the great argument of those who desired a regulated as opposed to a free trade, see Select Charters (S.S.) xxv; and cp, the Charter of the Merchants Trading to France (r61r2), ibid 63, 73, 74 ; Charter of the King's Merchants of the New Trade (r61r6), ibid 93; S.P. Dom. (r673-10r52) api.

6: In the first charter of the Russia Company, which dates from 1555, the company was styled " The Merchants Adventurers of England for the discovery of

## 2 Corporate Societies

are made to explorers who wished to colonize and settle and establish a trade in unappropriated lands beyond the sea.1 All these companies want governmental powers and trading privileges which the crown alone can give them. In the first place, they want a power to associate, as without some definite permission, associations were looked upon with suspicion by the government.2 In the second place, having got the right to associate, they want powers of self-government,3 powers to impose taxes on their members,4 powers to decide their own disputes,5 powers to take adequate measures to defend themselves against pirates and other enemies.6 They want the privilege of a monopoly of trade,7 dispensation from particular laws as to export and import,8 and other laws 9 which might hinder their trade, remissions of customs duties.10 All these privileges the king, by virtue of his wide prerogatives to control foreign trade, could grant. And he was inclined to grant them, because the control which could be thus exercised by the company over its members, was of great assistance to the state in the international complications which often arose out of the various mercantile activities of its subjects.11 Thus, in the first instance, corporate form was valued both by the king and by the merchants, not so much because it created an lands territories and isles dominions and signories unknown and not before that late adventure or enterprise by sea or navigation commonly frequented," Scott, op. cit. ii 37, 38; its privileges were confirmed by an Act of r566 (which is not printed in the Record Com. Ed. of the Statutes), and its style was shortened, ibid 41, 42; Select Charters (S.S.) 28-30.

Footnote 11: Thus in 16f3-f64 complaints of outages committed on Frenchmen by a person " employed for Virginia," and by the captain of a ship belonging to the Muscovy Company were preferred for information to the Council of Virginia and to the Muscovy Company, Acts of the Priy Council (16f3-16f4) 316-317.

Footnote 12: This is usual in all the early regulated companies.

Footnote 13: See e.g. the Charter of the King's Merchants of the New Trade (16f6), Select Charters (S.S.) 85.

Footnote 14: This is usual in all the early regulated companies.

Footnote 15: See e.g. the Charter of the King's Merchants of the New Trade (16f16), Select Charters (S.S.) 85.

Footnote 16: This is the Newfoundland company got power to fit out and maintain at the cost of the fishing fleet a ship of var, Acts of the Priy Council (16f3-16f4) 146.

Footnote 17: Charters cited above, 200 n. 5; Levant Charter (160i), ibid 36.

Footnote 18: Charter of the Society of the New Art (157a), ibid 24; see ibid Introd, xv, xvi.

Footnote 19: E.g. the Charter of the Mineral and Battery Works (1568), ibid 19, exempts employes from jury service; in the Charter of the King's Merchants of the New Trade (16f16), ibid 84, 12 Henry VII, c. 6 is dispensed with.

Footnote 10: E.g. the Newfoundland Charter (16n), ibid 57, 58; and see ibid Introd. xvi n. 2.

Footnote 11: Thus in 16f3-16f4 complaints of outages committed on Frenchmen by a person " employed for Virginia," and by the captain of a ship belonging to the Muscovy Company were preferred for information to the Council of Virginia and to the Muscovy Company, Acts of the Priy Council (16f3-16f4) 316-317.

### The Law Merchant

Artificial person distinct from its members, as because it created a body endowed_with these governmental powers and trading privileges. It was from the point of view of trade organization and the foreign policy of the sate, rather than from the point of the interests of the persons composing the company--from the point of view of public rather than commercial law--that the corporate form was valued.

In the seventeenth century, in consequence of the rise of the joint stock company, formed to conduct jointly some specific trade,1 the commercial advantages of incorporation began clearly to appear. In the first place, the corporate company, unless created for a definite period only,2 was a perpetual body. When persons who had formerly worked together as partners were incorporated, the incorporation got rid of "divers and sundry great inconveniences which by the several death of the persons abovesaid or their assigns should else from time to time ensue," Secondly, the fact that it was a corporate body made it easier to take legal proceedings against third persons,4 and possible to take such proceedings against their own members.5 Thirdly, the possession of a common seal made it easier to authenticate the acts of the corporate body, and to distinguish them from the acts of the individual corporators.6 Moreover, it was possible to provide that, unlike partnership, the votes of a majority of the corporators should bind the rest.7 Fourthly, continuity of management was more easily attained.8 Fifthly, some undertakings, e.g. the New River Company, desired power to make rules affecting the general public, which they could not otherwise have acquired.9 Sixthly, it was desirable to make it quite clear

## 1 Corporate Societies 203

that shares in a company, though choses in action, were transferable.1 Seventlly, it was desireble to draw a line between the corporate liability of a company, and the personal liability of the members of a company, for the corporate debts. Eighthly, it was desirable to settle the nature and extent of the personal liability of the members of the company to creditors of the company, and to the company itself. Of the nature of the settlement of the law upon these last two points, which, after some hesitation, was reached at the close of the seventeenth century, and of the way in which it was reached, some explanation must here be given.

Footnote 1: Select Charters (S.S.) xix; the existence of such shares is assumed in the Charter of the Mines Royal (1g65), ibid xc, i1. Dr. Scott points out (op. cit, i 443) that " as early as the sixteenth century shares were sold outside personal acquaintances and without limiting conditions "; and be points out (ibid ii 4f6 n. 2) that there is an instance of this in a sale by the earl of Leiceser of part of his holding in the Mineral and Battery Works ; and for sales in the early years of the seventeenth century, see ibid i 6f; Select Charters (S.S.) xivin. i; that the law on this point was still in an uncertain condition is clear from the fact that it was sometimes thought desirable to state expressly that shares should be transferable, see the Charters of the African Company (1g66 and 1g62), Select Charters (S.S.) x175, i80; of the Royal Fishey (1f77), ibid zoo; of the Mine Adventures (1704), ibid 245, 246; and that, in corporations established by statute, it was still thought necessary to provide expressly that the shares should be transferable, see e.g. the statute establishing the Greenland Company, 4 William and Mary c. 17 SSSS 1927.

2 Vol. iii 484.

3 See the authorities cited by Carr, Select Charters (S.S.) xviii. n. i; he points out that "the indenture which settled the sums and rents due to the king from the Starchmakers Company (Patent Rolls, 2o Jac, I. It, x) provided that no such sums 'shall in any sort be demanded levi recovered or had but only of the body corporate "'; and that in 1655 the governor of the Eas: India Company got an indemnity from the company " because bis name is used in all suits and actions"; Hobbes (Leviathan 120) thought that "if a body politique of merchants contract a debt to a stranger by the act of their representative assembly, every member is lyable by himself for the whole."

4 Edmunds v. Brown and Tillard (1g68) I Lev. 237; Salmon v. The Hamborough Company (1f671) i Ch, Cas. 204.

5 Carr, Select Charters (S.S.) xvii, xviii, says that the following formula, taken from atition for incorporation in 1692, is common : " The same \[i.e. a joint stock\] is not to be raised unless upon the establishment of a corporation, because if such an undertaking should be carried on only by articles of partnership, the stock will be liable to the particular and private debts of the several partners and subject to be torn to pieces upon the bankruptcy of any of them "; c. S., P. Dom, (169:1602) 523-524.

6 S and 6 William and Mary c. 2o SS 25--if the corporation borrows more than $\\not{L}1,200,000$ the individual corporators are to be personally liable ; 8 and 9 William III,the corporators or shareholders were liable to pay to the corporation the sums assessed upon them by the corporation; and the power to make these "leviations" naturally took a prominent place in the charters of some of these companies.1 But, that being so, it is clear that, if creditors could get an order from a court that the company should make "leviations" upon their members, the creditors could indirectly make the individual members of the company liable to the extent necessary to satisfy their debt. By a sort of subrogation the creditors could use the powers of the company against the individuals composing it, and so force these individuals to pay. We see this idea foreshadowed in a petition to the council in 1539;2 in 1653 it was proposed to give it statutory force;3 and in 1671 the principle was sanctioned by the House of Lords in the case of _Salmon v. The Hanborough Company.4_ But it should be observed that, as the creditors' rights against the individuals depended upon the existence of the company's right to make "leviations" upon the individuals composing it, they lost these rights if in fact the company had no power to make leviations. This opened the door to the possibility of limiting the liability of members of the company by a contract between the members of the company and the company, which provided that the members should not be liable to be called upon c. 20 SS 49--if the capital is diminished by the payment of dividends so that it is not enough to pay the corporate debts the members are to be liable to the extent of the dividends received; see also 6 George IV. c, 9 SS 2; 7 Will, IV. and I Vict. c. 73 SS 4-

Footnote 1: Select Charters (S.S.) xviii n, r; 1; 2, 91, 92, 164, 215; for instances in which these leviations were made, see Scott, op, cit, ii 47, 48, 59, 66, 80, 366, 367; for cases in which the authority of the council was invoked to force payment of these leviations, see Hist. MSS. Com. 4th Rep. App. 18, 20 (the Muscovy Company); S.P. Dom. (1634) 352, ccloxvi 39--Order o: Council on petition of the Governor and Company of Silkmen of London; ibid (1637-1638) 260, ceclxxii 20--Order of Council on petition of the governor of one of the Associations of Royal Fishings; cp, ibid (1639) 38r, ceccxxv 43.

Footnote 2: S.P. Dom. (1639) 38r, 352, ceccxxv 43.

Footnote 3: See the Draft Act " for the recovery of debts owing by corporations," Somers' Tracts vi r87; under that Act, if the leviations were not made, execution was to be had against the estate of the person who ought to have made it.

Footnote 4: (1671) r Ch. Cas. at pp. 2c6, 207. the Lords ordered that the governor and assistants of the company should " make such a leviation upon every member of the said company . , as shall be sufficient o satisfy the said sum to be decreed to the plaintiff in that cause, and to collect and levy the same, and to pay it over to the plaintiff as the Court shall direct. . And if . .

## 2 Corporate Societies 205

to pay more than a fixed sum. Such bargains were made;1 and that they were both common and efficacious may be gathered from the section of the statute of 1694, dealing with the liability of the shareholders in the Bank of England, which declared that, in certain events, they were to be personally liable for certain debts, notwithstanding any agreement which they might have made with the company.2 Thus it would seem that, by the adoption of the corporate form, a clear line could be drawn between corporate liability and individual liability; and that, by bargains made between the company and its members, the individual liability of the members of the company could be limited in any way agreed on between the contracting parties.

Footnote 1: Scott, op. cit, i z28--an agreement in 1637-1638, that a shareholder in the Mosquito Islands Company, who had paid calls up to PStoo, might elect not to go farther; ibid 344--the shareholders in the Million Bank were promised that they should only be liable to the extent of their stock. I do not agree with Dr. Scott (op. cit. i z70) that the Act of 14 Charles II. c. 24, which exempted certain shareholders from the bankruptcy laws, amounted to a limitation of liability; it only comes to this, that they were not to be accounted trader, and so could not be made bankrupt; if they were solvent their liability would be unlimited.

Footnote 2: 5 and 6 William and Mary c. 20 SS 25.

Such, then, were the commercial advantages which a society might get by assuming a corporate form; and it followed that, if they were secured, the promoters were able to secure the supreme advantage of attracting capital more easily to finance their undertaking. In fact, a society possessing these privileges had all and more than all the advantages both of the _societas_ and of the _commonada_. It was a permanent body quite distinct from its members. Privileges necessary for the particular trade which it proposed to carry on could be secured. It could get powers to coerce recalcitrant members, to settle disputes as to the working of the company, and to make necessary dye-laws. The corporate liability of the company and the individual liability of its members could be adjusted. The investor could be attracted by the advantages of transferable shares and a limited liability.

The older regulated companies, formed to organize foreign trade, naturally preserved many of the characteristics of the medieval grids, of which they were the lineal descendants. The new commercial companies of the joint stock type did not, as we have seen,3 at once lose all trace of these characteristics. But they were more essentially commercial; and the privileges which they obtained were chiefly reminiscent of the ideas which the development of the _societas_ and the _commonada_ had introduced into continental law. We must now trace the history of the form which these ideas took in England during the seventeenth century.

The _Numerical Companies and Partnerships of the Seventeenth Century_

I shall deal with this topic under the following heads :--firstly, the rise of the joint stock company ; secondly, its commercial and legal consequences ; thirdly, the Bubble Act and its effect on the development of company and partnership law.

1. _The rise of the joint stock company._

The main difference between a regulated and a joint stock company was that in a regulated company each member conducted his own trade with his own stock, subject to the rules and regulations of the company, while in a joint stock company the company traded as a single person with a stock contributed by its members.1 The first form of association was the older, and it was well adapted to a company formed primarily to see that the trade with which it was concerned was conducted in accordance with the commercial policy of the state. The second form of association emerged in England somewhat later, and was more adapted to a company formed for the strictly commercial object of making money for its members. It was not, however, till the latter part of the seventeenth century that the two forms of company became clearly distinct. Thus in the East India Company there was at first a system of terminable stocks.2 The investor subscribed only for a particular voyage, and the accounts of the different voyages were kept separately.3 Each member was free to invest or not as he pleased in any given venture. What was permanent and constant was not the stock, but the governmental machinery of the company--in fact, it was not till 1657 that a permanent joint stock was formed.4 Clearly this arrangement, though due partly to the exceptional position of this company, represents an intermediate stage between a regulated company formed primarily for the government of the trade with which it is concerned, and a joint stock company formed primarily to make a profit for its members.5 Similarly, in some of the early English and Scotch joint stock companies there was a dividend paid, not in money, but in commodities.6 The company, by trading with its joint stock, acquired these commodities, which it distributed to its members, and the members were free to dispose of them as they saw fit. This was the plan adopted by the Scotch New Mills Company, founded to manufacture cloth in 1681. Membership of the company was limited to trading merchants. When the cloth was produced, the price was fixed by reckoning the cost of production, together with a sum to represent interest

## 6 Companies and Partnership's 207

on the company's capital. It was then distributed to members at this price, and they retailed it. Thus, as Dr. Scott says, "it was a body in which the members werea regulated company as retailers, and a joint stock one'as manufacturers."1

Footnote 1: Op. cit. i 301, 302.

It will thus be seen that the company with a permanent joint stock, which paid pecuniary dividends from its earnings to its members, only gradually differentiated itself from the regulated company. It is not surprising, therefore, to find that, " so far as the charters of incorporation are concerned, the change from the regulated to the joint stock type is hardly perceptible."2 By the end of this period, however, the distinction between the two types of company was well established. The question thus arises, What was the origin of the joint stock form of commercial association, and what were the causes of its development?

Footnote 2: Select Charters of Trading Companies (S.S.) xxi. ${}^{$}$ Above 197-199.

There can be little doubt that the origin of the joint stock principle, like the origin of so many other principles of our modern commercial law, must be sought in mediaval Italy. Two elements went to its formation--firstly, ideas implicit in the _societas_ ;3 and, secondly, the development of those ideas under the pressure of the use made of them by the state for its own purposes. It is probable that the partners in a _societas_ generally traded with what was in effect a joint stock. From early times partnerships owned shares in a ship. The shares were transferable, and liability upon them was limited to the value of the ship.4 It is clear that large mercantile and banking partnerships, such as the Peruzzi and the Bardi at Florence, must have carried on their trade with a capital jointly contributed by the partners.5 We have seen that this feature of these partnerships tended to make the partnership almost a distinct legal person, and to make the lawyers regard it as an entity not very different from a corporation.6 But it was the use made of these partnerships, under the pressure of state needs, which necessitated the development of some of them into corporations of the joint stock type. States as well as kings found it necessary to borrow in the Middle Ages; and just as some of our English kings borrowed from the Italian mercantile and banking societies,7 so the Italian cities borrowed from their citizens. "The loans were divided into shares (_thought_, and the names of the owners were registered in special books. The shares not only passed to the heirs in case of the owner's death, but could be freely boughtand sold."1 But to attract the borrower the state found itself obliged to give some form of security for the capital and interest. Thus, in i 346, Genoa raised a loan for the conquest of Chios and Phocea, and gave the shareholders the _dominium utile_ of the lands conquered.2 It is obvious that the shareholders were in effect a large partnership interested in the exploitation of these lands ; and it was inevitable that they should assume a corporate form. Thus arose a joint stock company, consisting of creditors of the state, interested in exploiting a conquered colony. But when the institution of banking became general, it was also inevitable that it should play a great part in developing this institution. It was, as we have seen,3 soon perceived that a banking company could finance both the state and many other undertakings. Thus, in medieval Italy, as in England at the enc of the seventeenth century, banks were formed which, in return for financial aid to the state, were given privileges which they exploited as a joint stock company. In 1407 the bank of Genoa took over the various state loans. " As security for the interest the city granted important privileges to the holders of the new consolidated stock, which was divided into shares of ioo lives. The stockholders were granted the right (1408) to carry on banking business, and especially after i 453 the administration and exploitation of important Genoa colonies passed into their hands. The creditors of the Genoa state had become the shareholders of a great colonial company which ultimately governed and administered Corsica, Kaffa, and the greater part of the foreign dominions of Genoa."4

Footnote 1: Mitchell, The Law Merchant, i38, 2 Ibid. 3 Above i79-i8o. 4 Mitchell, op. cit. 139. 5 Scott, op. cit. ii 384. 6 Ibid 386, 7 Ibid 414. 8 Ibid 415.

In England, in the sixteenth and seventeenth centuries, we find that the same two elements--the ideas implicit in the _societas_, and the development of those ideas under the pressure of the use made of them by the state for its own purposes--contributed to the reception of the idea of the joint stock company. The sequence of events, and the historical incidents which led to their recognition and development, are, of course, different. But we can see that substantially the same causes were at work in England at this period as those which had been at work in Italy in the Middle Ages.

In the first place, bodies which started as a large partnership found it expedient to get corporate form, and to carry on their business as a joint stock company. Thus, the Society of the Mines Royal, which was founded in i 561,5 was incorporated in i 568 ; 6 and the Society of the Mineral and Battery Works, which was founded in i 565,7 was also incorporated in i 568.8 Similarly,

## 2 Companies and Partnerships 209

the trade with Africa in the sixteenth century was carried on by various partnerships or syndicates, to which privileges of exclusive trade was granted.1 It was not till: i 588 that the various syndicates trading to Africa were incorporated.2 In the second place, state needs helped to foster the growth of such companies. In England the earliest of these needs was not, as in Italy, the need to persuade its citizens to lend their money to the state, but the need to organize foreign trade and to found colonies. In i 553 the Russia Company was founded as a joint stock company.3 It was followed in i581 by the Levant Company;4 in 1600 by the East India Company;5 in 1670 by the Hudson's Bay Company;6 and in 1672 by the Royal African Company.7 All these companies were founded primarily to develop foreign trade. Of the companies founded primarily to colonize we get, among others the Virginia Company, founded in i609;8 the Somers Islands or the Bermuda Company, founded in 1612;9 and the New England Company, founded in 1620.10 It was not until the end of the seventeenth century that the joint stock principle was applied to the financing of the government. We have seen that the Stuart kings had privately borrowed from the bankers; but that it was not until the foundation of the 3ank of England that the plan of founding a bank as a joint stock company, and of giving it privileges in return for a loan to:the government, was adopted in England.11

## 210 The Law Merchant

maintenance of its fortifications.1 In fact, the maintenance of fortifications, when this was necessary or possible, or the maintenance of constant agents, was the sole excuse for the continued existence of these companies ;2 and, when these duties were taken over by the state, these companies naturally disappeared, or survived only as social clubs.3 Similarly, the companies formed to colonize gradually disappeared when the colonies which they founded had become in substance political societies.4

Footnote 1: 9 William III. C. 26; House of Lords MSS. (N.S.) iii no. 1292; see Cunningham, industry and Commerce ii 276, 2:77, for its subsequent history; it was finally dissolved by i and 2 George IV. C, 28.

On the other hand, the privileges given to some of these companies, or the necessities or fortunes of their trade, secured to some of them a longer life. The South Sea Company dragged out a struggling existence till 1807 ;6 and the faded splendous of its South Sea House survived long enough to secure immortality in the Essays of Elia. The Hudson's Bay Company served a useful political purpose in checking French influence in Canada ;6 and it obtained Parliamentary sanction by a Private Act in 1689.7 Its usefulness in this direction continued till the victory of Wolfe in 1759. But even after that event some organization was necessary to conduct a trade with Indian tribes ; and so, although it was a monopolistic joint stock company, it survived ;8 and, having abandoned its monopolistic rights in 1869,9 it still survives as a joint stock company. Similarly, the greatest of all these joint stock companies--the East India Company--survived the bitter attacks made upon it at the end of the seventeenth century,10 andcontinued to exist till the middle of the last century, mainly because it was a body whose governmental functions were becoming progressively more important than its commercial functions. We have seen that the minor governmental functions performed by some of these companies had led to their survival in a regulated form.1 The increasing empire which the East India Company was acquiring made it necessary that the affairs of the society should continue to be administered on a joint stock basis.2

Footnote 1: Above 209-2zo.

Footnote 2: See House of Lords MSS. (N.S.) if 29-56 for a discussion in f695 as to the comparative merits of organizing the company on a regulated or a joint stock basis.

But though some of these earlier joint stock companies had disappeared or had changed their form by the end of this century, it was quite clear that the joint stock principle had come to stay. It had become quite clear that industrial enterprizes of many varied kinds could be initiated successfully on a joint stock basis; and an enormous extension was given to the joint stock principle when the state used it to borrow money. In 1694, in return for money lent to it by a group of persons, the state incorporated this group as a joint stock company under the name of the Governor and Company of the Bank of England, and empowered it to conduct banking business. Thus the capital subscribed, bearing the interest promised by the state, was converted into a joint stock for the conduct of a commercial venture. The underlying idea, as Dr. Scott has pointed out, was " the utilization of capital lent to the state as 'a fund of credit' on which loans could be raised by an incorporated body for its trading operations."3 But this principle was capable of development.4 If the credit of the state could be converted into a fund which could be

### The law merchant

thus profitably used, why should not a company be formed to take over the whole of the state debt? This company, if given trading privileges, might be expected :o make large profits. The state creditors would accept its shares instead of their holdings in the state debt, and the company could afford to pay the state hand-somely for its privileges. Thus in time the state debt might be redeemed. Some such ideas as these, coupled with schemes still more ambitious, inspired the grandiose schemes of John Law ;1 and it was these ideas which led to the foundation of the South Sea Company.2

Footnote 1: Cambridge Modern History vi 169-176; cp. Scott, op, cit. i 398.

Footnote 2: "The crisis of 1779-1720 constitutes simply the attempt to realise an unconscious ideal of the indefinite expansibility of a fund of credit," ibid 397.

In i711, when the South Sea Company was originally founded, there was a floating debt of more than nine millions. It was determined to incorporate these creditors, and to give them the monopoly of the trade to South America. The government undertook to pay interest on this debt at 6 per cent., and it was to be redeemable after 1716.3 The company had some success, and in 1719 a large extension of this principle was proposed. The company was to take over the whole of the National Debt, except those parts of it owed to the Bank of England and the East India Company. The amount to be thus taken over was some thirty-one millions. The creditors were to be bought out, or to exchange their holdings for the company's stock. The government was to gain, because the debt was thereby made redeemable, and the interest poor: it was to be reduced from 5 to 4 per cent. after 1727.4 The company considered that the capital lent to the state, the interest upon which afforded a large revenue to the company, was a basis upon which immense sums might be borrowed to extend indefinitely the trade of the company. "Not only were there alluring prospects from the South Sea trade, but the mere fact of so large a working capital, under prudent organization, would render the greatest enterprises possible. Further, the close relations of the company and the Government must not be lost sight of ; so that, in any venture which required the assistance of the state, the most powerful support might be counted on."5 Naturally, the possession of such privileges was considered to be worth paying for. The directors of the company, in the first instance, offered to pay the government $\\mathcal{L}$3,500,000. But the Bank of England made a higher offer. Eventually the company, unhappily for itself and happily for the Bank,6 outbid the Bank

## 2 Companies and Partnerships 213

by an offer of $\\pounds 7,500,000$, and by bribes offered to and accepted by members of the government and the Legislature.1

Footnote 1: As to the evidence for this briber, which came out in consequence of the Parliamentary inquiry, see Scott, op. cit. iii 331-346; the committee of secrecy reported that, while the scheme was pending, a small committee of directors was authorized to facilitate the passing of the measure, and that they disbursed secretly $\\pounds 7,1259,325$, ibid 375, citing Journals of the House of Commons six 425-157; the East India Company had resorted to similar methods, above zio n. to.

By the end of the seventeenth century, therefore, it was recognized that the joint stock company was a valuable instrument for the promotion and working of new industries, and for the mobilization of national credit. On the other hand, it had, as we shall see, also become clear that it could be used to perpetrate gross frauds upon the public, and to encourage wild speculation and gambling in stock and shares. These new phenomena naturally had important results both commercial and legal. With these results I must now deal.

(2) _The commercial and legal consequences of the rise of the joint stock company._

The joint stock company met obvious needs. It gave to capitalists an opportunity for investment; and it made available much capital which would not otherwise have been employed in trade.2 Then, too, it interested all the wealthier classes in trading ventures, and so it tended to make the merchants a less exclusive class; and this mixture of the mercantile and non-mercantile element in the management of the joint stock company conducted, as Dr. Scott has pointed out,3 to the success of many of the early joint stock ventures, "In foreign trade or colonising much more than the specialised information of the merchant was required. In addition, there was needed something of the imagination of the pioneer and of the diplomacy of the statesman ... thus the admission of a strong non mercantile element by the joint stock company, not only was advantageous in increasing the supply of capital, but also in strengthening its organisation. From this point of view their strength lay not so much perhaps in the mere introduction of capitalists who were not actually in trade, but in the union of these in one body with the mercantile classes. Either in isolation was imperfect. The short-sighted views of some of the regulated companies, and the lamentable ignorance displayed in the equipment of the Darien Company, are cases in point. Whereas the combination of the specific and detailed knowledge of the traders, with the broad outlook of the man of affairs, tended towards a greater efficiency." That this combination was so successfully made in England is partly due to the

### The law merchant

fact that the mercantile classes had never been so separate from other classes of the community as elsewhere; and this again was due in part to the fact that mercantile law was becoming part of the common law, but chiefly to the absence of class barriers which were insurmountable.1

Footnote 1: See vol. iv 402-407; as Dr. Scott says, op. cit. i 444, " this happy result is to be attributed in no small degree to the relation of classes in England, where members of different social grades could work together with the minimum of friction, and both could bear adversity with fortitude."

In the last decade of the seventeenth century, dealings in shares of these companies were so numerous that John Houghton began, in 1692, to publish a peer in which the prices of stock and shares were recorded.2 We are not, therefore, surprised to learn that " the mechanism of Stock Exchange dealings had been developed "; that " time bargains were well understood, and ' put and call' options were not unknown "; and that " the business of a stock broker was specialised, and a tariff of charges had been established."3 The stock and share market was beginning to be familiar with its alternate booms and panics. Macaulay's account of the boom of 1692-1695 is classical.4 Bagehot,5 who was a banker and an authority on such matters, said of it, " You will not find the cause of panics so accurately explained in the dryest of political economists--in the Scotch M'Culloch."

Footnote 2: It is called A Collection for the Improvement of Husbandry and Trade; see ibid 329, for a description.

Footnote 3: Ibid 345:

Footnote 4: History of England chap. xix.

Footnote 5: Literary Studies ii 250.

Footnote 6: Journals of the House of Commons xi 595: "The pernicious art of stock jobbing hath of late so perverted the end and design of companies and corporations erected for the introducing or carrying or of manufactures to the private profit of the first projectors, that the privileges granted to them have commonly been made no other use of by the first procurers and subscribers but to sell them with advantage to ignorant men, drawn in by the reputation, falsely raised and artfully spread, concerning the thriving state of their stock. Thus, the first undertakers getting quit of the company by selling their shares for much more than they are really worth to men allured by the noise of great profit, the management of that trade and stock comes to fall into unskilful hands."

It was naturally in the years of reaction which followed on a boom, that the shady side of joint stock enterprise forced itself on the attention of the public. A report of the Commissioners of Trade, published in 1696, accused the dealers in shares of rigging the market, and the promoters of companies of fraudulently raising the price of shares by making false statements as to the prospects of the company, and then selling their holdings at a high price.6 The report was, perhaps, too sweeping in its condemnation,7 though it is probable that there were individual cases in which these or similar frauds had been practised. The Legislature, by an act of 1696-1697,8 attempted to regulate brokers, and to check gambling by means of time bargains; but nothing was done as

## 2 Companies and Partnerships 215

yet to fetter the activity of the promoter. Probably both the Legislature and the lawyers were puzzled. The phenomenon of speculation in the shares of joint stock companies was, as a commercial problem, new to the Legislature, and, as a legal problem, it was equally new to the lawyers. This fact we shall appreciate if we look at the extreme poverty of the ascertained rules of law applicable to commercial societies, whether corporate or unincorporate.

In the first place, the line between corporate and unincorporate societies was generally disregarded by the projectors of companies. Bodies of persons joined together to form a society, which differed from an incorporated joint stock company in no particular, except in the absence of a charter.1 In the second place, the powers of an incorporated society acting under a charter were by no means clearly defined. Once having got a charter, a society considered itself free to undertake business projects wholly outside the business for which it was incorporated.2 In 1691 the York Buildings Company was incorporated to supply water to London. But in 1719 it sold its interest in the waterworks, and began to deal in lands forfeited by the Jacobites in consequence of the rising of 1715.3 This idea, that the activities of an incorporated society were not limited by the terms of its charter, led to a trade in charters. Societies which wished to get the privilege of incorporation at small expense, bought up the charter of a company which had ceased to trade, and used it to carry on their own businesses. Thus, first a company of merchants who proposed to lend money on land in Ireland, and then the banking partnership of Turner Casswall and Sawbridge got possession of the charter of a company formed in 1691 to manufacture hollow sword blades. This banking partnership traded under the name of the Sword Blade Company. They acted as the bankers of the South Sea Company, issued "sword blade notes" on "sword blade bonds," and were eventually proved, inter alia, to have falsified their books, and to have issued fictitious notes to cover presents of South Sea stock to high officials.4 Similarly, an insurance company made use of the

#### 216 The law merchant

The South Sea Company, in 1720, instigated proceedings against some of these companies, with the result that their charters were forfeited;2 and it was this very rash, and, in the circumstances, imputed action on the part of that company, which began the panic which ruined it.3 These proceedings established the rule that the activities of a company were limited by the terms of its charter; and that it could only use the powers conferred by its charter in furtherance of the business for the carrying on of which it had been incorporated.4 But it would be difficult to point to any previous authority in which this elementary principle had been precisely laid down; and, in fact, in the Parliamentary inquiries of this period, the directors of some of these companies cited in support of their proceedings the opinions of eminent counsel whom they had consulted.5 In the third place, accounts were often kept in a very irregular manner;6 and as " the idea of capital as something which should be kept intact was unknown,"7 no very clear notions prevailed as to what parts of the gains of a company were properly divisible as profit. Ir fact, "the payment of dividends

## 1 Companies and Partnerships 217

out of capital was quite usual."1 In the fourth place, there was no clear law as to the manner in which claims against a company, which had been dissolved or had amalgamated with another company, should be settled. Persons who had claims against the dissolved or amalgamated company often found it difficult to realize them.2

Footnote 1: Op. cit. Dr. Scott says that in the sixteenth century " there was no need of a term to describe the whole outlay. As yet the company stood in this respect too near the partnership for the want of a capital account to be felt. The idea of capital as something which should be kept intact was unknown, and very much later the payment of dividends out of capital was quite usual. In fact ... the temporary joint stock made this method of procedure unavoidable. As the goods brought home were sold the adventurers received payments pro rata ; and when the voyage had been a success they obtained more than they had paid in, if it was a failure they might get less."

Footnote 2: Acts of the Privy Council (16f3-16f4) 586-587--the Merchant Adventures, having been requested to surrender their chartri, said they were willing to do so, but " whereas by this resignacion of our chartri, were shable disenabled to recover any debtes due unto the bodie of our Company, and thereby want me meames to pay what wee owe to other men, wee therefore humbly pray your honours that such power and authority may be given us, whereby wee may not only collect such sommes as are and shable due to the body, but also make a 'esesement upon the now Bretheren of this Company for the better satisfaction of those debtes, which are owing unto others by the same" ; S.P. Dom. (1676-1677) 34, 35--a petition to the Council by an agent of the Royal Adventures Company, which had sold its assets to the Royal Africa Company, stating that," though the members of the new company consist mostly of persons who were members of the old company," he cannot get his claims satisfied.

Footnote 3: Below 24:2-243.

Below 24:2-243.

Footnote 4: Martin v. Crompe (1698) r Ld. Raym. 340; a principle apparently applied also to co-factors, Holstcomb v. Rivers (1669) r Lq. Cas. Ab. 5.

Footnote 5: Ild.

Footnote 6: Ild.

Footnote 7: Lane v. Williams (1693) 2 Vern, 292.

Footnote 8: Lane v. Williams (1693) 2 Vern, 292.

Footnote 9: Above 202 n. 5.

Footnote 10: Estwick v. Conningsby (1682) I Vern, 118.

Footnote 11: Below 24:2-243.

Footnote 12: Below 24:2-243.

Footnote 13: Martin v.

of the partnership agreement,1 were all beginning to bring partnership cases under the jurisdiction of equity. But the court of Chancery had as yet only just begun to lay the foundations of the modern law.

Footnote 1: Since the author was not aware of the fact that the author was not aware of the fact that the author was not aware of the fact that

## 6 Companies and Partnerships 219

tried to find a short-cut to riches by investing in companies which promised immediate wealth on easy terms; and the promoters and the directors of companies, unrestrained by any effective rules of law, were left practically free to gull the public as they pleased. In order to remedy these obvious evils, for which the Legislature itself was largely responsible, it passed a measure which influenced for more than a century the history of commercial societies in this country.

_(3) The Bubble Act and it: effect on the development of company and partnership law._

After considering a good deal of evidence as to the promotion and administration of many of the companies which had sprung up during this period of speculation, the House of Commons came to the following resolution: 1--" That for some time past several large subscriptions having been made by great numbers of persons in the city of London to carry on public undertakings, upon which the subscribers have paid in small proportions of their respective subscriptions, though amounting on the whole to great sums of money; and that the subscribers' having acted as corporate bodies without any legal authority for their so doing, and thereby drawn in several unwary persons with unwarrantable undertakings, the said practices manifestly tend to the prejudices of the public trade and commerce of the kingdom." In other words, the House of Commons neglected the deeper causes of the panic--the encouragement to speculation given by the Government's connection with the South Sea scheme,2 the corruption of the Ministry and of members of the Legislature,3 the extravagant notions entertained of the powers of a fund of credit,4 the facilities for fraud and negligence given by the absence of any sort of legal control over the activities of promoters and directors; 5 and they concentrated their attention on,one cause only--the extension of the joint stock system by the manner in which societies, which were not incorporated, usurped corporate form, and the consequent: growth of the " pernicious art of stock-jobbing."6 What was needed was an Act which made it easy for joint stock societies to adcpt a corporate form, and, at theThe Law Merchant

same time, safeguarded both the shareholders in such societies and the public against frauds and negligence in their promotion and management. What was passed was an Act which deliberately made it difficult for joint stock societies to assume a corporate form, and contained no rules atall for the conduct of such societies, if, and when, they assumed it.

The Act 1 began by repeating in substance the resolution to which the House of Commons had come. It set out the evils which had arisen from the starting of dangerous undertakings on a joint stock basis with a transferable stock, from the unlawful assumption of corporate form, and from the trade in charters which had recently been carried on.2 It then condemned as illegal all such undertakings to the prejudice of trade, and subscriptions, assignments, transfers, and other things for furthering such undertakings; the acting or presuming to act as a corporate body; the raising of a transferable stock, or the assigning of such stock without authority either by Act of Parliament or by charter; acting under any charter formerly granted by the crown for purposes other than those expressed in the charter, or under an obsolete or forfeited charter.3 It was provided that these acts should be deemed to be public nuisances,4 that the persons guilty thereof should incur the penalties provided by the statute of Praemunire,5 that merchants injured by them could sue for treble damages,6 and that brokers dealing in the shares of such undertakings should be liable to a penalty of $\\mathcal{LS}$500.7 The Act was not to extend to undertakings established before June 24, 1718--they were to be left to the common law.8 Henceforth there was to be no confusion between a corporate and a non-corporate commercial society. Henceforth the privilege of possessing a transferable stock, which brokers or jobblers could manipulate, was to belong only to a corporate society.

Footnote 1: 6 George I. c. 18 SSs 18-22; for the leading decisions on the Act, see Lindley, Law of Companies (5th ed.) 130-132; see also R. v. Webb (1811) 14 East 406.

Footnote 2: SSs 18 preamble. 3 SSs 18. 4 SSs 19.

Footnote 4: SSs 20. 7 SSs 21.

Footnote 8: 22. This, of course, would make corporations trading under obsolete charters, or trading in a manner not allowed by their charters, still liable to legal proceedings, above 215-216; whether at common law societies with a transferable stock were illegal is more doubtful, below 221.

Nor were these results wholly objectionable. It is not good for the state that large societies which are not corporations, and yet assume to act as corporations, should be allowed to exist. Such societies are much more difficult to regulate than a corporation. A corporation has received a privilege from the state, and, in return for that privilege, it can be submitted to such rules as may seem necessary to protect: both its members and the public. Its existence is well known, and inqui

## 6 Companies and Partnerships 221

its conduct. It is difficult to regulate an unincorporated society, because, if it is proposed to subject it to legal liability, it is apt to dissolve into its component parts, and leave the injured person to the impossible remedy of suing a large number of persons who, individually, are not worth suing; nor is it easy to ascertain the manner in which its affairs are conducted. What was objectionable in the Act was the hindrances which it threw in the way of the assumption of a corporate form. The Act, as Dr. Scott has pointed out, stopped the development of the joint stock system. " It became both difficult and costly to obtain the necessary legal authorisation for the starting of a new enterprise needing a large capital. In one that might have been established with a moderate outlay, which for any reason it was desirable to collect from a large number of persons, the trouble and cost proved prohibitive. Therefore, for upwards of a century, industry was deprived of the advantages of a certain amount of capital which would otherwise have been available."1

Footnote 1: Op. cit, i 438, 4 George IV. c. 94.

When the Act was repealed in 18253 interesting questions arose, analogous to those which arose after the repeal of the Combination Acts,3 as to whether the offences created by the Act were also offences at common law, and in consequence unaffected by the repealing Act. On this point there was a considerable divergence of judicial opinion, because the common law had, as we have seen,4 no very definite rules upon the subject. The cases of the earlier part of the nineteenth century decided that though, possibly, the assumption of the status of a corporation without authority,5 and certainly the formation of a company which attempted to defraud the public, or otherwise of a dangerous or mischievous character, were illegala. acts;6 the mere formation of a joint stock company7 with a transferable stock 8 was not illegal; and this view is probably historically correct.9The history of commercial societies after the passing of the Bubble Act, the causes which led to its repeal, the rise of the limited company, and the enormous development of the joint stock principle which ensued, belong :o the modern history of this branch of commercial law.

We must now turn to the law of agency, the development of which was a necessary consequence of the rise, both of the modern mechanism of negotiable instruments and banking, and of these commercial societies corporate and unincorporate.

## 5 Agency

Primitive systems of law are ignorant of a law of agency. The parties to acts in the law must execute them in person \[1\]. But so soon as the law begins to develop, this primitive principle begins to yield at different points to practical necessities. The Salman was an agent for a particular purpose--the transference of property in accordance with the directions which he had received \[2\]. In later law the feoffee to uses was an agent for a somewhat analogous purpose \[3\]. The attorney was an agent for purposes of litigation \[4\] and the clauses in commercial and other documents, which allowed the bearer or the creditor's nominee to sue, were designed to evade the strict rules of primitive law as to the employment of agents for this purpose \[5\].

Gradually the common law came to recognize a law of agency both for the acquisition of chattels personal, and for the making of contracts.

The development of the actions of detinue and trespass on the case gave the beneficiary an adequate remedy, when chattels personal had been conveyed to another person to his use \[6\]. On the other hand, though a man could appoint an attorney or agent to convey or receive hereditaments or chattels real, he had no adequate remedy against a person who led such property on his account, until the rise of the use and the equitable trust \[7\].

We begin to see the rise of agents for the purpose of contract at an early date. At first these agents were found chiefly in the

## Agency 223

higher ranks of society and in public law. "The king ever since John's day has been issuing letters of credit empowering his agents to borrow money, and to promise repayment in his name. A great prelate will sometimes do the like. Among the clergy the idea of procuration was striking root; it was beginning to bear fruit in the domain of the public law; the elected knights and burgesses must bring with them to parliament 'full powers' for the representation of the shires anc boroughs."1 But in the early thirteenth century the appointment: of agents for this purpose was not common; and it would seem that agents informally appointed or appointed by implication were hardly recognized.2 However, it was not long before it gained recognition; and the fact that the practice spread somewhat readily in the course of the thirteenth century, is due to the two allied influences of mercantile necessity and the canon law. From an early date the records of the fair courts show that some sort of commercial agency must perforce be recognized;3 and, during the fourteenth and fifteenth centuries, the development of trading companies, which must necessarily act through agents, helped its further development.4 All through the Middle Ages the ideas of the canon law in this, as in other branches of commercial law,5 made for its easier recognition. As Maitland has shown, "the legal deadness of the monk favoured the growth of a law of agency";6 and the corporate bodies of monks, like the corporate bodies of merchants, needed agents. Thus the canon law acquired some rules upon this branch of the law; and the merchants could borrow and apply these rules to the agents whom they employed.7

Footnote 1: P. and M. ii 225,

Footnote 2: Bracton's Note Book, case $73, cited F. and M. ii 225 n. 6,

Footnote 3: Vol. viii-iiz. 4 Above 193 seqq.

Footnote 5: Vol. v 80-S3.

Footnote 7: Brissaud, op. cit, ii 144, " la situation des procureurs aux negoces (par opposition aux procureurs aux causes, proces) est feglemente par voie d'emprunt aux regles du droit roman et du droit canon (Seate 5, rz, 63, 7z (3))."

Footnote 8: See vol. iii 528-S30 for the application of these principles to the liability of the husband for the wife's debts; and see generaly Street, Foundations of Legal Liability ii 446-448.

Thus, in the course of the medieval period, the ideas that it is possible to make a contract through an agent, and that it is possible for a man to ratify a contract made on his behalf through an agent, were fully recognized by the common law.8 The common law also recognized that on such contracts the principal and not the agent was liable,9 not only when the agent had express authority to do the particular act, but also when he

### 224 The Law Merchant

acted within the scope of an authority to do acts of a particular kind.1

Footnote 1: The author is grateful to the anonymous referee for his comments on the manuscript.

During the sixteenth and seventeenth centuries it was beginning to be seen that certain classes of agents were more closely connected with commercial law. In the books of mercantile law written by merchants or civilians, it is clear that two chief classes of mercantile agents are emerging--brokers and factors.

Brokers, Malynes tells us, were intermediaries, through whom two persons were brought into contractual relations. They had been long known in the city of London, where provisions had been made for their regulation.2 He approves the practice of dealing through brokers--thereby "many differences are procventcd, which might arise between man and man in their verbal contracts ; for the testimony of a sworn broker and his book is sufficient to end the same. And moreover it is many times a cause that factors and servants deal more faithfully for their masters in buying and selling of all commodities, or in moneys by exchange, knowing their evidence is extant against them." 3 But he says that brokers were seldom used in England 4--a statement which is probably an exaggeration, at any rate in London. At the end of the seventeenth century, however, they were well enough known ; and it is clear that a distinct class of brokers, dealing in bills of exchange and in stocks and shares, were beginning to emerge.5 Public opinion credited these brokers with making combinations and confederacies to raise or lower the price of stock ; 6 and though perhaps more blame was placed upon their

Footnote 1: \_Y.B. 8 Ed. IV. Mich. pl. 9 (p. r1), **ii** iso command mon servant d'acheater certein biens, ou jede face un home mon factor et mon atturney pur achater marchandise etc., en ce cas s'il achat marchandise d'un home, joe sera charge per tiel contract, comment que les biens ne unques veigue en maines, et comment que jeno n'ay unques notice de ce, et le cause est pur ce que jeno don tiel power a eux, et ce fuist mon foly de issint faire,"fer Pigot ; cp. 27 Ass. p. 133 pl. 5; Doctor and Student Bk. II. c. 42 f. 137a.

Footnote 2: \_Y.B. 8 Ed. IV. Mich. pl. 9 (p. r1), **ii** iso command mon servant d'acheater certein biens, ou jede face un home mon factor et mon atturney pur achater marchandise etc., en ce cas s'il achat marchandise d'un home, joe sera charge per tiel contract, comment que les biens ne unques veigue en maines, et comment que jeno n'ay unques notice de ce, et le cause est pur ce que jeno don tiel power a eux, et ce fuist mon foly de issint faire,"fer Pigot ; cp. 27 Ass. p. 133 pl. 5; Doctor and Student Bk. II. c. 42 f. 137a.

Footnote 3: _Majynes, loc, cit._

Footnote 4: _Ibid._

Footnote 5: \_S, 9 William III. c, 32 Preamble.

Footnote 6: _S, 9 William III. c, 32 Preamble._

Footnote 6: _S, 9_

Footnote 7: _S, 9 William III. c, 32 Preamble._

Footnote 8: _S, 9_

Footnote 6: _S, 9_

Footnote 7: _S, 9_

Footnote 8: _S, 9 William III. c, 32 Preamble._

Footnote 9: _S, 9_

Footnote 6: _S, 9_

Footnote 7: _S, 9_

Footnote 8: _S, 9 William III. c, 32 Preamble._

Footnote 9: _S, 9_

Footnote 6: _S, 9_

Footnote 8: _S, 9 William III. c, 32 Preamble._

Footnote 9: _S, 9_

Footnote 6: _S, 9_

Footnote 9: _S, 9_

Footnote 6: _S, 9_

Footnote 7: _S, 9_

Footnote 8: _S, 9 William III. c, 32 Preamble._

Footnote 18: _S, 9 William III. c, 32 Preamble._

Footnote 1

**AGENCY**

shoulders than was just,1 they ro doubt sometimes helped to manipulate the market in their own interest. At any rate the Legislature in 1696-1697 thought it necessary to regulate their business.

Footnote 1: The author is grateful to the anonymous referee for his constructive comments.

The Act2 did not apply to brokers for the purchase and sale of cattle, corn or other provisions, and coal. It did apply to brokers for the purchase and sale of all other merchandise, for taking up money, for negotiating bills of exchange, and for the sale and discount of tallies, bank stock, bank bills, and shares in joint stock companies.3 No person was to act as a broker in London, Westminster, or within the Bills of Mortality, without a licence from the Lord Mayor;' and no broker, even though so licensed, could deal in tallies or stock secured upon funds granted by Parliament, unless licensed by the Treasury.5 A broker, on being admitted, must take an oath to do his duty, and give a bond for its performance;6 and their names and addresses were to be published.7 They must keep a broker's book, and enter in it all contracts made by them within three days of their date.8 They must not take more than 10s per cent. brokerage;9 and penalties were imposed on a broker who took more, or who dealt for himself in the exchange of money, or who bought stock or shares to sell again.10 In order to discourage dealings in speculative options, it was provided that every bargain to give a man liberty to accept or refuse shares should be void unless it was exercisable within three days.11 The number of brokers was limited to one hundred.12 It is clear from this Act that brokers were beginning to take an important place in the commercial world. But as yet their legal position is ill defined. There are few if any cases concerning them in the reports. Comyns, in his Digest, cites none.

Footnote 1: The author is grateful to the anonymous referee for his constructive comments.

### The Law Merchant

servant of his principal : the factor at this period was, in the eye of the common law, very much in the position of a servant.1 Nevertheless, according to the practice and usage of the merchants, the factor differed essentially from a servant. " The difference," says Malynes, " between a factor and a servant consistent chiefly in this, that a factor is created by merchant's letters, and taketh salary or provision of factorage : but a servant or an apprentice is by his master entertained, some receiving wages yearly and some others without wages. A factor is bound to answer the loss which happpenth by overpassing or exceeding his commission ; whereas a servant is not, but may incur his master's displeasure."2 Malynes then gives certain rules as to the adjustment of accounts between merchant and factor, as to keeping within the limits of his commission, as to his liability to account for any gain made by the use of his master's credit, as to his liability for liability for false entries at the custom house, as to his liability for the loss of or damage to goods entrusted to him, as to his duties in relation to letters of credit, bills of exchange, the freighting of ships, and the insuring of ships or cargoes.3 Molloy's chapter on factors does not add anything very material to the information given by Malynes.4

Footnote 1: In Southcode's Case (160f) 4 Co. Rep, at f. 84a Coke explains that a factor, unlike a carrier, is not liable if, without his fault, the goods trusted to him are stolen, " for if a factor (although he has wages and salary) does all _that_ which he by his industry can do, he shall be discharged, and he takes nothing upon him, but his duty is as a servant to merchandize the best that he can, and a servant is bound to perform the command of his master."

Footnote 2: Malynes, op, cit. Bk. I. c. xvi. 3 Ibid. 4 De Jure Maritimo et Navali (4th ed.) Bk. III. cap. viii. 5 See e.g. Core's Case (1537) Dyer 2oa; The Earl of Lincoln v. Topcliff (1599) Cro. Eliza. 644. 6 William Lewson v. Kirk (161r) Cro. Jac. 265. 7 Sheppard v. Maidstone (1713) to Mod. 144 ; The African Company v. Mason (1715) to Mod. 227. 8 Smith v. Oxenden (1663) r Cases in Charactery 23; Boni v. Vandali (1563) ibid 30 ; Knipe v. Jesson (1666) ibid 76--in which the extraordinary rule was laid down that, if the factor could succeed in defrauding the customs of a foreign country, he could keep the profit, as he had run the risk.

The information given by Malynes and Molloy no doubt summarizes existing mercantile practice. But as yet this practice was very little known to the English courts of law and equity. The cases which turn upon the relations of merchant and factor are very few in number, and deal only with one or two isolated points on the fringe of the subject. Thus we get a few cases in the common law courts, which un un on the applicability of the actions of account or debt,5 on the liability for non-payment of duties at the custom house,6 and on the interpretation of the bonds which factors gave to perform their duties carefully and honestly.7 In Chancery we get some cases turning upon liability for erroneous entries at the custom house,i and on the administration of the

**AGENCY**

**227**

**estate of a deceased factor which comprised assets belonging to the merchant or vice versa.1 In this period we get little else.2 In fact, during the greater part of it, this branch of the common law has been least of all affected by the customs and rules of the law merchant.**

Footnote 1: Chapman v. Derby (168g) 2 Vern. 117-claim by a factor on the estate of a deceased merchant; Burdett v. Willett (1768) 2 Vern. 638-claim by a merchant on the estate of a deceased factor.

Footnote 2: We have seen, vol, i 505; vol, v 150 n. 2, that the Council occasionally interfered on equitable grounds to redress cases of hardship caused by a principal's or an agent's fraud--but these cases do not carry us very far.

\*\*Perhaps the best proof of this fact is the refusal of the common law to draw any distinction between the law of principal and agent, and the law of master and servant. In common speech, no doubt, both in the seventeenth century and in our own day, the terms principal and agent connote commerce, and the terms master and servant domestic service;3 but, except in so far as special statutes have put particular classes of agents upon a footing of their own, the common law still treats these two branches of law as fundamentally identical. If in England commercial law had ever come to be administered by special commercial courts, the law of commercial agency might have come to be a branch of the law quite distinct from the law of master and servant. The fact that commercial law came to be administered by the common law courts, has prevented any such distinction from growing up.4 Coke, as we have seen,5 regarded the factor as a servant; and Blackstone dealt with the law of agency in his chapter on Master and Servant.6

Footnote 3: Thus, Locke, Two Treatises of Government Bk, II, chap, vii SS 85 uses the terms in this sense.

Footnote 4: "There has never been a time when cases on master and servant were not cited as authority in the law of principal and agent, and _rice versa_," Street, Foundations of Legal Liability ii 454.

Footnote 5: Above 226 n. I.

Footnote 6: Comm. i c. xiv.

Footnote 7: Vol, iii 382-385; below 251-252, 472-473-

Footnote 8: Vol, iii 385-387; below 476-477-

The result was that the develcpment of the law of commercial agency was very slow. We shall see that the courts, during the greater part of this period, contented themselves with applying the strict rules of the mediaval common law.7 Except in those cases in which, from motives of public policy, a more extended liability was allowed,8 a master was only liable for the acts of his agent if he had actually ordered him to act, or if he had, by words or conduct, subsequently ratified his acts. And this conception was, as we shall see, applied, as in the mediaval period, both to the contracts made and to the torts committed by the agent. The cases of _Barton v. Sadock_ and _Southern v. How_ illustrate this point.

Footnote 7: Vol, iii 382-385; below 251-252, 472-473-

In the case of _Barton v. Sadock_,9 the plaintiff, a merchant,The law merchant

brought an action of account against the defendant, his factor, for certain jewels delivered by the plaintiff to the defendant to trade with beyond the sea. The defendant had sold the jewels to Mulleshake, the king of Barbary, for $\\not{\\xi}$45; but he had not yet received the money. It was held that he was liable to the plaintiff. Fleming, C.J., said,1 "In cases of authorities given to one (as in this case here) to sell anything, as a factor, in the due execution of this authority, he ought presently upon the sale thereof to have and receive quid pro quo, otherwise he doth not well perform the authority, thus to him given, neither ought he upon the sale thereof, to give him any further time, or day of payment, but as he delivers the one, so he ought then presently, at the same time, to receive the money for the same for which it was sold."2 In the case of \_Southern v. Hov_3 the defendant was the owner of certain counterfeit jewels. He sent them to his factor in Barbary to be sold. The factor, through the plaintiff, sold them to the king of Barbary for $\\not{\\xi}$8oo, telling him that they were good jewels; and the $\\not{\\xi}$8oo was paid over in due course to the plaintiff. When the king discovered that they were counterfeit, he imprisoned the plaintiff till he repaid him the $\\not{\\xi}$8oo. On these facts the plaintiff brought his action on the case against the defendant. Judgment was given for the defendant, chiefly, the report tells us, on the ground that the master did not command the factor to conceal the fact that the jewels were counterfeit.4 This case thus illustrates the fact that, at this period, as in the medieval period, the principle applied to the liability of the master for the torts of his servant was the same as that applied to his liability for his servant's contracts. In both cases there must be a particular authority to do the act complained of. Such cases as these show that, if the factor was to be protected from personal liability, he must be able to show that authority had been given to him in very wide terms.4 It was only very occasionally that the criminal equity administered by the Council 5 and the Star Chamber 6 relaxed these rules.

Footnote 1: At p. 104.

Footnote 2: This case was followed in 1676, Anon. 2 Mod. roo. 3 (1678) Cro. Jac. 468.

Footnote 3: As Malynes says, op. cit. Bk. I. c. xvi, if you have a good factor, " all communications given unto him may be ample, with addition of these words, _dispose_, _do_, _and_ \_caele therein as if it were your own.\_4

Footnote 4: Dasent vii 204 (1564-1565)--a master is ordered to produce his servant guilty of an affray or to go to prison.

Footnote 5: Reporters del Cases 165--it was ruled, that, " where one commands his servant to enter on certain land, and to take distress peaceably, and he enters with many others riotously, the master is a rioter."

At the end of the seventeenth century it was becoming obvious that these rules were quite inadequate. In fact the exigencies of commerce compelled all the courts to reconsider the principles of

## 6. Bankruptcy

This branch of the law. The court of Chancery was beginning to apply the principles of equity to the solution of some of its problems. Thus in one case it applied the analogy of trustee and esteui que trust to the relations between a factor and his principal ; 1 and in another it ruled that payment by a principal to his agent did not necessarily discharge his debt to the creditor.2 Then, too, it was clear that the very limited delictual liability of the principal for his agent's torts urgently demanded revision ; and in this part of the law we shall see that certain civil law rules, applied by the court of Admiralty to the relations of shipowners, masters, and merchants, were taken over by Holt, C.J., and the common law courts, and used by them as a technical justification for this extension.3 Probably Holt's decisions upon this branch of the law of agency were largely instrumental in preserving it for the common law. If the common lawyers had refused to extend it to meet obvious needs it might very possibly have been developed mainly by the court of Chancery.

Footnote 1: Burdett v. Willett (1708) 2 Vern. 638.

Footnote 2: Speerman v. Degrave (1709) 2 Vern. 643.

Footnote 4: "Dars le tres ancien droit, cest la personne du debiteur, son corps, qui repond avant tout du payement de sa dette; par exension, ses meubles en repondent aussi, car mobilia ossibus inherent," Brissaud, op, cit. ii 4462.

Footnote 5: Ibid t465; for Genoa see Leges Genvenses, Mon. Hist. Pat. xviiii cols. 574, 657-659.

Footnote 6: For the Roman Latw of Venditio Bonorum see Girard, Droit Roman 1013-1017; Brissaud, op. cit. ii 445 n. 3, notes that the law of the Italian towns diverged from the German German.

## 6. Bankruptcy

In many early systems of law the obligation of the debtor is personal in a very literal sense--the body of the debtor can be taken by the creditor.4 In all early systems of law each creditor is left to pursue his own remedy. There is no machinery by which the creditors as a body can collectively enforce their claims. But as soon as industry and commerce begin to develop, these primitive ideas must be modified. Whenever it is possible the creditor enforces his rights against the property and not against the person of the debtor ; to prevent fraud, and to facilitate the equal treatment of all the creditors, a procedure by which creditors can collectively enforce their claims is developed ; and generally some distinction is drawn between a debtor who is unable to pay by misfortune, and a debtor who is unable to pay by reason of his own recklessness or fraud.

Footnote 4: "Dars le tres ancien droit, cest la personne du debiteur, son corps, qui repond avant tout du payement de sa dette; par exension, ses meubles en repondent aussi, car mobilia ossibus inherent," Brissaud, op, cit. ii 4462.

These developments had taken place in the Italian commercial cities in the Middle Ages.5 They had adapted to their own use the bankruptcy procedure of the Roman law (_Venditio Bonorum_), under which the whole property of the debtor was divided equally among his creditors.6 At the same time they had adopted alsothe modified procedure of the _Cessio Bonorum_, under which a debtor, who was unable to pay by misfortune, could escape arrest, and get discharged from his liabilities by giving up all his property.1 From Italy these forms of procedure gradually spread to other countries during this period, and Malynes 2 gives us some account of them.

Footnote 1: The _Cessio Bonorum_ is a _Cessio Bonorum_, which is a \_

## 12 Bankruptcy

last resort. At all times there will be persons whose morality is so much below the average commercial morality of the age, that they do not scruple to take advantage of the credit which, in reliance upon the existence of that commercial morality, is given to them. If it is advantageous to commerce that the standard of commercial morality should be high, and that credit should be given, it is necessary to bring home to such persons, in the only way in which they will feel it, the consequences of their conduct. It is true that the imprisonment of a debtor, who is unable or unwilling to pay his debt, will not necessarily give the creditor his money; but it will tend to stop such abuses of confidence. At the same time it is a means of coercion which requires to be regulated carefully; and in most systems of law it is recognized that it should be used sparingly and in the last resort.

The common law soon discovered that it could not do without this method of execution. In the case of one class of debts it was permitted by statute from an early date. It was provided in 1285 that a debtor by statute merchant could be arrested.1 But in most cases this form of execution was gradually and indirectly introduced, by means of changes in the process of the courts, and changes in and developments of the forms of action. The manner of its introduction was as follows:--From the first a writ of _capias ad respondendum_ had been a part of mesne process in actions of trespass vi et armis.2 In the thirteenth century this writ was extended to actions of account;3 in the fourteenth century to actions of debt, detine, and replevin;4 and at the beginning of the sixteenth century to actions on the case.5 It had been laid down in Edward IIIL's reign that when a writ of _capias ad respondendum_ lay to get the defendant before the court, a writ of _capias ad satisfaciendum_ would lie to obtain execution of the judgment.6 The result was that in practically every case a creditor could take his debtor's body in execution. But, if he elected to adopt this remedy, as he usually did, no other mode of execution was open to him.7

Footnote 1: 13 Edward I. st. 3; vol. iii 132.

Footnote 2: 52 Henry III. c. 23; 13 Edward I. c. 17.

Footnote 3: 53 Henry III. c. 23; 13 Edward I. c. 17.

Constraint of the debtor's person thus became in England a more general method of execution than in many other countries in Europe. Largely because it was introduced in this indirect way, a mode of execution which required, and in most countries

### The Law Merchant

received, careful limitation and regulation from the Legislature,1 was almost entirely unregulated. The results can be read in the pages of Dickens ; and, long before Dickens wrote, the abuses and the inadequacy of the different modes of execution known to the common law had aroused attention.

Footnote 1: For its regulation in French Lav see Brissaud, op. cit. :ii i469-i471; the regulation began as early as r254--"Sant Louis, en r254, prit des dispositions qui auraient du la faire disparatire, mais qui eurent, du moins, pour resultat d'accentuer son caractere subsidiaitaire et d'en faire une voie d'execution exceptionnelle "; cp. Malyness, op. cit. 293-294.

As early as Henry VIII.'s reign it had become obvious that the machinery of the common law was wholly inadequate to the needs of the merchants of the sixteenth century. Henry Brinklow, citizen and mercer of the city of London, who wrote in the later years of Henry VIII.'s reign,2 shows us that the merchants were beginning to complain that English law lagged behind the laws of other mercantile communities. "Another thing very nedeful to be looked upon is this, that when any merchant or other, by lose of goodes, by fortune of the sea, evel servantys, evjl detters, by fyre, or other wyse, come to an after deale, and not able to pay his credyte at his due type, but by force of poverty is constrayned to demand longer type--than $y$e have a parcyclil have in making of tachmentys,3 first come, first servyd ; so one or j shall be all payd, and the rest shal have nothyng. And comonly even the rych shal have the foredeale therof by this tachement, to the gret dammage and oppressyon of the pore. For lyghtly the rich have the first knowlege of soch things. Wherfor, in that case it were a godly way to make it in Ingland, as it is in dyverse contrys, whan any such chance falleth, that than the most in nomber of the credytors and most in somme, shal bynde the rest to doo and gyve lyke type as doo the most of the credytors. And if it be duly found that the man be so farre at after deale, that he be not able to pay his whole credite in reasonable type, that than the lawe may bynd them that every man may have pound and pound alyke, as farre as his goodys will goo, leavyng him somewhat as the lawe shall thyrch good. And this lawe shal be both neghborly and godly."

Footnote 2: Complaynt of Roderyck Mors (E.E.T.S.) c. 17. Brinklow was originally a Grey Friar. He became a mercer and citizen of London, married, and died in r546. He was a strong Protestant, as his works show. This book was written about r542.

Brinklow in this passage points to one serious defect in the law--its unfairness to creditors. Equally obviously it was unfair to debtors. Debtors might be either honest and unfortunate, or dishonest ; and in both cases the law was inadequate. To shut up an honest but unfortunate debtor in prison, where he lived on

## 12 BANKruptcy

charity or at his own expense, or died of starvation,1 inflicted much hardship on the debtor without any benefit to the creditor. On the other hand, if the debtor was a dishonest person, who had become insolvent through his own fault, he would very likely be able to secrete some of his ill-gotten gains, and live in comparative comfort in prison, till he forced his creditors to some sort of compromise.2

Footnote 1: What may be perhaps called the strictly medieval view of the position cf the imprisoned debtor is to be found in Dive v. Manningham (r5g7) Plowden at p. 68, "" If one be in execution he ought to live of his own, and neither the plaintiff nor the sheriff is bound to give him meat or drink, no more than if one distrains cattle and puts them in a pound. ... And if he have no goods he shall live of the charity of others, and if others will give him nothing, let him die, in the name of God, if he will, and impute the cause of it to his own fault, for his presumption and ill-behaviour brought him to that imprisonment ""; clearly this state of the law was quite unsulted to the economic conditions of the sixteenth century ; cp. Brinlow, op. cit. c. 1z, for a strong indictment of the hardships inflicted on prisoners at this period; at the end of the period the Legislature intervened; t4 Elizabeth c. 5 SS35, and 39 Elizabeth c. 3 SS13 provided for the assessment of a county rate for the relief of these prisoners ; but it would appear from Malynes, op. cit. 294-298, that its intervention was not very effective ; and this is borne out by a petition of the poor prisoners in the Fleet prison and elsewhere, who point out that " in no other country is perpetual imprisonment the punishment of debt," Hist. MSS, Com. 3rd Rep. App. 26; for later legislation see below 234-235.

Footnote 2: For one illustration see Hudson, Star Chamber 65, 66, cited vol. i 505; and for another see a petition to the House of Lords, Hist. MSS, Com. 4th Rep. App. 5 in which it was alleged that a debtor by collusion was still getting a large part of his income, " and, though nominally a prisoner in the Fleet these fourteen years, yet by Habeas Corpus or otherwise, has liberty to travel where he pleases with his own man as his keeper, and regards not payment of his debts."

The need for better laws was met in two ways--firstly by the jurisdiction of the Council, and secondly by the Legislature. And during this period we can distinguish two quite distinct lines upon which the Council and the Legislature proceeded. Firstly the law was modified in favour of the unfortunate, and secondly it was sharpened as against the dishonest, debtor. We shall see that it was from the second of these lines of development that the bankruptcy laws spring.

1. _Modifications in favour of the unfortunate debtor._ 1. The activities of the Council. On behalf of the honest but unfortunate debtor the Council repeatedly and actively interfered. Sometimes it arranged or enforced a composition with his creditors. That such compositions were usual in the middle of the sixteenth century can be seen from a precedent for a deed of this kind in Phayre's book ;3 but their effect was liable to be nullified by obstinate creditors. The Council applied pressure to such creditors, and ordered creditors to make

### The law merchant

them.1 Sometimes it directed a creditor to give his debtor time till certain profits expected from a voyage should be realized.2 Sometimes it appointed commissions to enquire into the cases of persons imprisoned for debt;;3 and though the legality of the powers exercised by these commissions was very doubtful,4 the commissioners exerted pressure of an indirect but effectual kind upon creditors who would not come into the arrangements which they suggested.5 This jurisdiction was exercised throughout the earlier half of the seventeenth century.6 On one occasion, in 1637, the Council stated that they did not think it reasonable that a threat of bankruptcy proceedings should be used to " strengthen the wilfulness of a few against the general and charitable consent of the greatest number of the creditors"; and the Lord Keeper said that debtors who feared to pay, lest they might be made to pay again by a commission of bankruptcy, might lay aside that fear, as he should refuse to issue any such commission. All the debtors who refused to pay, and all the creditors who refused to agree, were ordered to attend the Council and show their reasons.7

Footnote 1: The author is grateful to the anonymous referee for his comments.

Footnote 2: The author is grateful to the anonymous referee for his comments.

Footnote 3: The author is grateful to the anonymous referee for his comments.

Footnote 4: Vol. iv 70; vol. v 432-433; Dasent xv 99 (1587)--their doings had given rise to proceedings under the statute of Prermunite; ibid xviii 109 (1589)--a complaint that the working of the commission is hindered by actions at law.

Footnote 5: Dasent xvii 384 (1592)--a letter of advice to the commission as to their dealings with creditors who refused to accept reasonable terms; apparently the commissioners were to warn the recalcitrants that if they persisted, and afterwards themselves got into difficulties, they must not look for any favour from the Council; cp. ibid xviii 433-434 (1589-1590)--recalcitrant creditors summoned to appear before the Council; Malynes, op, cit. 157, advocated the renewal of the commissions for the relief of distressed prisoners.

Footnote 6: See Acts of the Privy Council (1673-1674) I02-103, 169-170, 204, 472, 522-523.

Footnote 7: S.P. Dom. 1636-1637, 51, cccxixiii 47, 48; cp. ibid i, cccxvii i; for a similar case see ibid i637, 239, cccxiii 37; it appeals from these cases that the crown was in the habit of issuing protections in order to facilitate such compositions; for an earlier petition see ibid i633-1634, 307, ccli 58.

(ii) The enactments of the Legislature.

During the last half of the seventeenth century the Council ceased to exercise this jurisdiction, and the Legislature soon found it necessary to interfere to relieve the harshness of the law. Two petitions of distressed prisoners were presented to the House of Lords in 1660,8 and in 1662 and 1664-1665 bills for their relief were considered by the House.9 But it was not till 1670-1671 10

## 12 BANKrupticy

**235** that anything was done. By an Act passed in that year 1 it was provided that a justice of the peace could cause any prisoner for debt to be brought before him ; and that if the prisoner wore that he had no estate above the value of $\\pounds$10, and that he had not conveyed away his estate to defraud his creditors, a certificate should be given to the prisoner, and notice should be given to the creditor to appear at the next quarter sessions.2 If the prisoner's oath could not there be disproved he was to be discharged.3 If, however, the creditor insisted on keeping him in prison, he must pay a weekly sum for his maintenance.4 Notwithstanding the discharge of the prisoner, judgments were to stand good, and new executions against the prisoner's property could be sued out.5 Enquiries were to be made into the administration of funds given for the relief of poor prisoners ;6 felons and prisoners for debt were not to be lodged together ;7 and certain other abuses committed by gaolers or their officers were prohibited.8 In 1678 9 this Act was extended to persons imprisoned on mesne process.10 Prisoners kept in prison with a weekly allowance from their creditors were to be released, if no estate belonging to them could be discovered within three months.11 Debtors who were labourers could be removed to the workhouse, and could demand their release after two years.12 The Act was not to apply to debtors who had not been in prison for six months,13 or who owed more than $\\pounds$500,14 or to aliens in respect of debts contracted abroad ;15 and a discharge was made conditional on a full disclosure by a debtor of his effects, and of the debts owing to him.16 In 1690 an attempt was made to prevent debtors from using the Acts to defraud their creditors, by causing themselves to be imprisoned in collusive actions;17 and further amendments of the law were made in 1694 18 and 1695-1696.19 It was provided by the latter of these two Acts that the Acts should not apply to debtors taken in execution for the non-payment of fines imposed for offences,20 to debtors to the king,21 or to those owing damages for wrongs which were felonious.22

Footnote 12: SS 3; this section provided that the allowance was to be paid, not to the gaoler, but to the prisoner, and SS 11 provided that the weekly allowance need not be made if a relation liable to maintain the prisoner was able to do so.

Footnote 13: SS 4; see also 30 Charles II. c. 4 SS 5; it was provided by SS 8 of the last named Act that the discharge of the prisoner did not release a surety.

Footnote 14: SS 6.7; SS 7.8; SS 86.8.

Footnote 15: SS 8.7; SS 90 Charles II. c. 4 SS 10; SS 11; SS 3; this section provided that the allowance was to be paid, not to the gaoler, but to the prisoner, and SS 11 provided that the weekly allowance need not be made if a relation liable to maintain the prisoner was able to do so.

Footnote 12: SS 85.7; SS 90.5; SS 91.5; SS 92.5; SS 93.5; SS 94.5; SS 95.5; SS 96.5; SS 97.8; SS 98.7; SS 98.7; SS 99.8; SS 99.8; SS 99.8; SS 99.8; SS 99.8; SS 95.5; to encourage recruiting it was provided by SS 14 that no one under forty was to get his discharge unless he either enlisted or procured some one else to enlist.

Footnote 13: SS 9; this section provided that the allowance was to be paid, not to the gaoler, but to the prisoner, and SS 11 provided that the weekly allowance need not be made if a relation liable to maintain the prisoner was able to do so.

The number of these Acts leads us to think that they were not very effectual, either to precure the release of prisoners, or to put a stop to the malpractices of gaolers or their officers. The justices of the peace were not well fitted to do the duties imposed on them. Gaolers and officials were more likely to side with rich creditors than poor debtors;1 and the same might probably be said of many of the justices. For these reasons these Acts were probably less effective than the measures adopted by the Council in the sixteenth and early seventeenth centuries.

Footnote 1: This complaint was made in a petition of the prisoners to the House of Lords in 1672-1673, Hist. MSS. Com. qth Rep. App. z6; a bill to improve the original Act of 1670-1671 was read a first time in 1673-1574, but failed to pass, ibid 37; and another bill of the same kind failed to pass in 169p, ibid 13th Rep. App. Pt. V. 161 no. 322.

Footnote 2: Dasent v 344 (1556); vii 47 (1558-1559); x x5, 37 (1577-1578); xii 344-342 (1550-1581); xiv 78, 95, 133, 192 (1586-1587).

(2) _The measures taken against dishonest debtors._

During the earlier part of this period the Council interfered in the case of the fraudulent bankrupt, either to set the law in motion,3 or to give directions in specific cases.4 But in this class of case their efforts were seconded, and to a large extent superseded, by the Legislature, at a much earlier period than in the case of the unfortunate debtor.

Footnote 3: Ibl x66, 391 (1577-1578); xii 310-311 (1581-1582)--an order that a creditor who was an ambassador should be paid in full.

Footnote 4: 34, 35 Henry VIII. c. 4; Coke, Fourth Instit. 277, 278; vol i 470.

(ii) The enactments of the Legislature.

It is in the enactments of the Legislature, passed to deal with the dishonest debtor, that we must look for the origins of the law of bankruptcy. All of the bankruptcy Acts passed in this period were Acts passed with this object. All were directed against fraudulent bankrupts, and aimed, not at relieving the bankrupt, but at getting his property for the benefit of his creditors.

The first of these Acts was passed in 1542-1543.5 It recites that " divers and sundry persons, craftily obtaining into their hands great substance of other men's goods, do suddenly flee to parts unknown, or keep their houses not minding to pay or restore to any their,reditors, their debts and duties "; and it empowers the Lord Chancellor and certain other officials, and the two chief justices, to seize the property and imprison the persons of such debtors, and to distribute their property among their creditors. The debtors of these persons, and anyone suspected of having in their possession any of their property, could be summoned, examined, and required to make payment or restitution, they could also be required to disclose any facts within their knowledge.

## 12 Bankruptcy

Creditors who got undue preference from absconding debtors could be punished; and collusive recoveries got against these debtors could be set aside. These proceedings could be taken against debtors who withdrew themselves out of the kingdom, or who kept their houses or otherwise concealed themselves, in order to avoid the payment of their debts.

This statute was replaced in 1571 by a much more comprehensive statute, which was amended and enlarged by statutes of 16042 and 1623.3 These three statutes contain the bankruptcy law of this period.

Footnote 1: I3 Elizabeth c. 7. ${}^{2}$ I James I. c. 15. ${}^{3}$21 James I. c. 19

Footnote 2: I ames I. c. 19 SS15; apparently, before this statute, where an English debtor abroad attempted to evade his foreign creditor by transferring his property and coming to England, the court of Chancery intervened to help the foreign creditors, Sere and Eland v. Colley (1610-1611) Tothill 68-69; and cp. Monro, Acta Cancellaria 160, 1: the fact that the bankrupt and the creditor were out of England was immaterial, Wild v. Middleton (1632) Tothill 75.

These statutes (_a_) define the persons who can become bankrupts; (_b_) catalogue the various possible acts of bankruptcy; (_c_)vest the jurisdiction in bankruptcy in commissioners appointed by the Lord Chancellor; (_d_) assign various powers to the commissioners to enable them to collect and distribute the assets of the bankrupt; (_e_) define their duties to the creditors and the bankrupt; (_f_) provide for increasing in various ways the assets available for distribution among the creditors; and (_g_) define the effect of bankruptcy on the liability of the bankrupt. Let us glance shortly at these seven points.

(_a_) \_The persons who can become bankrupts.--\_All the Acts confine the class of persons who can become bankrupts to traders.4 Under the two earlier Acts they must also be British subjects; but the act of 1623 provided that aliens could be made bankrupts, and that they could prove as creditors.5 It was decided in 1700 that an infant could not be made a bankrupt because the debts of an infant are voidable; and "no man can be a bankrupt for debts which he is not obliged to pay." 6

(_b_) \_The acts of bankruptcy.--\_The statute of 1571 declared the following acts, if done with the intention of defrauding or hindering creditors, to be acts of bankruptcy:--departure from the realm; keeping house or otherwise absening oneself; taking sanctuary; suffering oneself to be arrested for debt; suffering oneself to be

### The law merchant

outlawed or imprisoned; or departing from one's house.1 The statute of 1604 repeated this list with some small verbal modifications, and required the acts to be done with the intention of hindering or delaying creditors. It added the two following acts if done with a like intent--suffering one's goods and chattels to be attached, and making a fraudulent conveyance of one's lands or goods. It further added the two followingacts, whether this intent was present or not--suffering oneself to be arrested for debt and lying in prison six months,2 and non-appearance when summoned by the commissioners.3 The statute of 16234 added the following: procuring protections; presenting a petition against one's creditors to force them to take less than their original debts, or to get a longer time of payment; being indebted for 100 or more and not paying the debt within six months after arrest, or the suing out of the original writ; being arrested for such a debt and escaping, or getting out by giving common bail.5

Footnote 1: I3 Elizabeth c. 7 SS I.

Footnote 2: I James I. c. 15 SS 2.

Footnote 3: Ibid SS 6.

Footnote 4: I ames I. c. 19 SS 2.

Footnote 5: For common bail see vol. i 220.

Footnote 7: Op. cit. 158--' The Commissioners appointed by the Lord Chancellor under the great Seal, to execute this commission of the Statute of Bankrupts, must be Counsellors at the law, joyned with some citizens or merchants, which are to seise of the party (which by the said commission is proved to be a bankrupt) all goods, debts, chattels, and moveables into their hands, and to appoint one or two of the creditors to be Treasurets of the same, which is afterwards to be distributed by the said Commissioners, unto all such as they shall find and admit to be right Creditors to the party (and with his privity and consent) upon such specialities, books, or accounts, as they shall produce, and be made apparent unto them.'

Footnote 8: Hawarde, Les Reports, etc., 342-343, tells us that in 1607 an action was brought against three commissioners (two being members of Gray's Inn and one an attorney) for taking money (22); the action was dismissed, " And the Lo, Chancellor sayde he was sorry they took no more (for with a Lawyer Cessans Lucrum dammum est) and yf Commissioners should not have rewarde for their travell and Charges no Commission woulde be executed."

\_(c) The jurisdiction in bankruptcy.--\_This was vested in "'wise honest and discreet persons" commissioned by the Lord Chancellor.6 Malynes tells us that they were generally counsellors at law joined with some citizens or merchants; and that they generally appointed one or two of the creditors to be the treasurets of the fund to be distributed.7 They were entitled to be paid for their trouble in executing the commission; 8 and, in case of unfair dealing, they were subject to the control of the Court of Chancery.9

Footnote 9: Wood v. Hayes (1606-1607) Tothill 62.

Footnote 10: I3 Elizabeth c. 7 SS 2.

Footnote 11: I James I. c. 15 SS 7; 21 James I, c. 19 SS 6.

Footnote 12: I James I. c. 15 SS 8.

Footnote 13: I did SS 9.

## 1. Bankruptcy 239

They could summon before them and examine upon oath debtors of the bankrupt, or anyone suspected of being in possession of any part of the bankrupt's property. In case of a refusal to answer they could commit to prison \[1\]. Fraudulent concealment by a bankrupt of his property to the value of $\\not{\\xi}\_{2}$o was punishable by the pillory and loss of an ear \[2\]. They could break open the doors of the bankrupt's house in the execution of their commission \[3\]. They could assign to a creditor any debt due to a bankrupt, and the creditor could sue for and recover it in his own name \[4\]. They could make a grant of the bankrupt's entailed lands by deed enrolled, which would hold good as against all persons whose interests the bankrupt might have barred by suffering a recovery \[5\]; and they could redeem any estates conveyed upon condition by the bankrupt, which might have been redeemed by him \[6\]. Evasion of the commissioners' powers, by the pretence that the bankrupt was indebted to the king, was prevented by giving the commissioners power to enquire into the real facts \[7\]. Their powers were not determined by the death of the bankrupt \[8\].

\_(e) The duties of the commissioners to the creditors and the bankrupt.--\_The estate must be reteably divided among the creditors \[9\]. This rule of equal divisicon was applied, even though a creditor had a judgment, statute, recognizance, specialty, attachment, or other security \[10\]. Until distribution was made among the creditors, other creditors could cone in and claim a dividend, on condition of contributing rateably to the cost of the commission ; but if they did not come in within four months the commissioners might distribute \[11\]. The commissioners must, if required, account to the bankrupt for the manner in which they had employed his property, and pay him any surplus after the discharge of all his debts \[12\].

\_(f) Assets available for distribution.--\_All these statutes contain provisions for setting aside certain dispositions by the bankrupt of his property, in order to increase the amount available for the creditors. The statute of i571 provided that after-acquired property of the bankrupt was to be available for the creditors ; but not property bona fide conveyed to other persons before the

### The law merchant

bankruptcy.1 The statute of 1604 made a more stringent provision. It enacted that all conveyances made by a bankrupt of his property before bankruptcy, unless made in consideration of marriage or for value, could be treated as void ; 2 but, under the statute of 1623, if a conveyance was made after an act of bankruptcy committed, no purchaser for good and valuable consideration could be impeached, unless the commission were sued out within five years of the act of bankruptcy.3 These provisions aimed at swelling the assets by getting back property which had formerly belonged to the bankrupt. The statute of 1623 aimed also at swelling the assets by taking the property of other persons in the possession of the bankrupt. With that object it introduced the reputed ownership rule. Goods in the possession, order, and disposition of the bankrupt, by the consent of the true owner, could be disposed of for the benefit of the creditors.4

Footnote 35: A.

## 12 Bankruptcy

the commissioners that a man was a bankrupt, was traversable in an action of false imprisonment \[1\]. Similarly, on a writ of habeas corpus, the legality of a commitment by the commissioners could be questioned \[2\]. It was only a traler who could be made bankrupt ; and the question whether a person was a trader within the meaning of the bankruptcy Acts was often before the courts, generally on a reference from the Chancellor \[3\]. Sometimes this question was determined by the more indirect manner of an action for slander ; for the question whether it was an actionable slander to call a man bankrupt depended upon whether he was a trader within the meaning of the Acts \[4\].

It was only on the petition of the creditors that a commission could issue \[5\]; and, on such a petition, the Chancellor held that its issue was a matter of right \[6\]. The commissioners would then decide whether an act of bankruptcy had been committed, or whether a debt was proved, subject to an appeal to the Lord Chancellor, or a reference to the judges \[7\].

The common law decisions upon the interpretation of the Acts turn, for the most part, merely on the construction of particular sections \[8\]. They do not add very much to the statute law. For these additions we must look rather to the decisions of the Chancellor. We have seen that the court of Chancery would interfere in case of unfair dealing \[9\]; and towards the end of this period it began to deal with other questions as to bankruptcy administration \[10\]. One class of these cases turns upon the question whether certain equitable interests could be deemed to be assets. Thus it was held that property settled for the benefit of the wife and children of the bankrupt could not be taken \[11\], or even an annuity settled by a father on his son \[12\]. It was even doubted for some time whether an equity of redemption was an asset assignableby the commissioners.1 Another class of cases turns upon the modes of distribution adopted by the commissioners;2 another upon the rights of different classes of creditors;3 and another upon the validity of an assignment made before bankruptcy.4 But perhaps the most interesting questions were those which arose in the case of the bankruptcy of a partnership, and in the case of the bankruptcy of a purchaser of land or goods. In the manner in which the court of Chancery dealt with both these cases we can trace new and important principles of law.

Footnote 1: Vandenanker v. Desbrough (1689 a Vern. at p. 97.

Footnote 2: Hitchcock v. Sedgwick (1690) 2 '7ern. at p. 162; in 1693:1694 a bill for " the more equal distribution of bankrupts' states ' was thrown out by the House of Lords, Luttrell's Diary iii 285.

Footnote 3: 2 Vern. at p. 157; Craven v. Knight (1682) 2 Rep. in Ch. 226.

Footnote 4: Mechett v. Bradshaw (1633-1634) Nelson 22.

Footnote 5: Pollock, Digest of the Law of Paruership (11th ed.) 159 seq.

Footnote 6: Craven v. Knight (1682) 2 Rep. in Ch. 226, 229; i Eq. Cas. Ab. 55.

Footnote 7: Craven v. Middows (1683) 2 Cases in Ch. 139.

In the partnership cases we see the beginning of the modern rule5 that the joint estate is primarily liable to the joint debts, and the separate estate to the separate debts. In the earliest of these cases, in 1682,6 two partners had agreed that debts owing on the joint account should be paid out of the joint stock, and that the joint stock should not be changed with the separate debts. But, on the petition of a separate creditor, the court decreed that the joint stock and joint debts should be divided into moieties; that each moiety of the stock should be charged with a moiety of the joint debts; and that which was over must be applied to pay the separate debts of the partners. If the joint stock was not enough to pay all the joint debts, and either partner paid more than a moiety, he could come in as a creditor for the amount overpaid by him; and presumably his separate creditors would get paid out of any dividend he so got. Ir subsequent proceedings in the same case, Lord North seemed tc think that the agreement of the partners that the joint debts should be paid out of the joint stock was ineffectual, as it could not bind their creditors. But the reporter adds a quere whether the separate creditors could have any better title than the partners under whom they claimed.7 Whether or not the primary liability of the joint stock to the joint creditors, and the primary liability of the separate estate to the separate creditors, was based on this ground is not clear; but it is clear that in 1715 we get in substance the modern rule.8 A commission of bankruptcy having issued against two partners, the separate creditors applied to be let in to prove their separate debts against their separate estates. They were allowed to do so; and it was directed "that as the joint or partnership estate was in

## 12 BANKruptcy

the first place to be applied to pay the joint or partnership debts ; so in like manner the separate estate should be in the first place to pay all the separate debts ; and as separate creditors are not to be let in upon the joint estate until all the joint debts are first paid ; so likewise the creditors to the partnership shall not come in for any deficiency of the joint estate, upon the separate estate, until the separate debts are first paid." At an earlier date it had been settled that if a partner embezzled the partnership property and became a bankrupt, the partners could, in priority to the separate creditors, get from his share of the partnership assets the amount which he had embezzled.1 This seems to be the origin of one of the exceptions to the general rule ;2 but as yet very little has been done to differentiate the various exceptions to this rule, and to ascertain their scope and application.

Footnote 1: Richardson v. Godwin (1693) 2 Vern. 233.

Footnote 2: Pollock, op. cit. 172.

It was laid down in 1684 that where a bankrupt, having bought land, had not paid all the purchase money, the vendor need not come in as a creditor for the rest of the money ; but that the land should be charged with the balance due.3 In 1690 it was laid down that, when goods had been assigned by unpaid vendors to purchasers, who went bankrupt before the ship conveying them had sailed, then, although the property had passed at law, the vendor could retake the goods. " If they by any means get these goods again into their hands, or prevent their coming into the hands of the bankrupts, it was but lawful for them so to do, and very allowable in equity."4 It is clear that in these two cases we have the origins of two exceptional rules in the law of bankrupt--the rule which gives the vendor of real estate an equitable lien and so makes him a secured creditor, and the rule that an unpaid vendor of goods can stop in transitu as against a bankrupt purchaser.

Footnote 3: Chapman v. Turner (1684) 1 Vern. 267, 268--\* in this case there is a natural equity that the land should stand charged with so much of the purchase money as was not paid ; and that without any special agreement for that purpose."

Footnote 4: Wiseman v. Vandeputt (1690) 2 Vern. 203.

The bankruptcy law established by these statutes suffered from two great defects. In the first place, it made no sort of differentiation between the unfortunate, and the dishonest or reckless bankrupt. The governing idea of the statutes was that the bankrupt is an offender ; and the fact that they provided for no discharge of the bankrupt from his liabilities, as the result of bankruptcy proceedings, is characteristic of this governing idea. The result was that the rogue often escaped while "pain dealing men were laid hold of,"5 In the second place, there is some reason to think that the commissioners who exercised this jurisdiction were not always very competent. It was said in _Alderman Backwell's Case_ that

### The Law Merchant

the fact that the commissioners were liable to be sued, if they had acted wrongly, caused the most sufficient persons to avoid serving ;1 and there is evidence that the administration of the law was in consequence both expensive and dilatory.2 For both these reasons it is clear that the application o: a measure of discriminating equity was needed. It is therefore not surprising that, at the latter part of this period, the Chancellor began to interfere more actively with the administration of the law by the commissioners ;3 that several proposals for a reform of the law were made ;4 and that early in the following period it was materially modified. Even with these modifications, both the law itself and its administration continued to be one of the most unsatisfactory branches of English law till the reforms of the nineteenth century.5 All these defects were aggravated by the limited scope of the bankruptcy laws, which, as we have seen, applied only to traders ; and by the fact that no person, whether or not he came within the scope of these laws, could force his creditors to assent to a composition.

Footnote 1: "It was a mischief that the Act of Parliament had subjected the Commissioners to an action, so that no sufficient persons ... would undertake the trouble of it," I'vein. at p. I5+; see I James I. c.rg SS 16 for the procedure in these actions, 2 S.P. Dom, r677-167SS 64 ; ibid r678 85. 3 Vol, i 470-471.

Footnote 2: S.P. Dom, r677-167SS 64 ; ibid r678 85. 3 Vol, i 470-471.

Footnote 3: A bill for the better recovery of bankrupt's estates, and for the more equal distribution thereof, failed to pass the House of Lords in r693-1694, House of Lords MSS, i no. 8r5; another bill to effect a more equal distribution of insolvent's estates failed to pass in r694-r695, ibid no. 88a. 4 Vol, i 47-473. 8 Above 234.

Footnote 4: A bill to facilitate compositions with creditors was considered by the House of Commons in r679, S.P. Dom, r679-r68o r38, i 47; Commons Journals ix 613; a similar bill failed to pass the House of Lords in r694-r695, House of Lords MSS, i no. 9IL.

That this was so was largely due to the fact that the abolition of the jurisdiction of the Council in r641, had left no machinery by which an honest but unfortunate debtor could make an effectual composition with his creditors unless all the creditors agreed.6 At one time, it is true, the court of Chancery would, by means of a bill of conformity, compel a minority of creditors to assent to a composition of which a majority had approved.7 But this practice gave rise to abuses--such bil's were filed merely to delay proceedings at law.8 It was the:efore ordered by proclamation in r621 9 that such bills should be dismissed if the creditors did not consent ; and it was enacted in r623 that the filing of such a bill should be an act of bankruptcy.10 Several attempts were made at the end of this period to pass Acts to facilitate these compositions,11 An Act was passed in r696-1697 ;12 but it was repealed in the

## 2 Maritime law 245

following year.1 The result was that, right down to the beginning of the nineteenth century, no means were provided for enforcing a just composition with creditors; 2 and this defect was aggravated by the power which each creditor had of oppressing the debtor by taking his body in execution.3 The resulting hardship on debtors, who were unable for any reason to take advantage of the bankruptcy laws, was forcibly pointed out by the Common Law Commissioners in i831-i832. "A dabtor," they said,4 "who finding himself in difficulty or even insovency, but so circumstanced as not to be within the scope of the bankruptcy law, is at present frequently placed in a distressing situation; however willing he may be to do substantial justice by making a cessation of his property for the benefit of his creditors, he is often unable to effect his purpose. If he offer a composition, it is in the power of one or two of the creditors, out of mere caprice or in the expectation of being paid in full, to defeat the arrangement, and several cases of great hardship have occurred, when, after a debtor has surrendered the whole of his estate for the benefit of his creditors, he has been arrested and left to lie in prison, without the means of obtaining his liberation."

Footnote 1: g William III. c. 29.

Footnote 2: The need for some legislation is illustrated by a petition of Robert Ryves, a goldsmith who had been ruined by the stop of the Exchequer (above r86); he prayed that the king would interfere to make a creditor accept a composition approved by all the others, S,'. Dom. 1676-i677 t58.

Footnote 3: Above 231-i23.

Footnote 4: Fourth Report, Parliamentary Papers r83r-r832 Pt. I. 14.

It would, I think, be true to say that it was this branch of English law which was the most injuriously affected by the abolition of the jurisdiction of the Council. That neither the Legislature, nor the common law, nor equity, had succeeded in constructing a satisfactory body of law, is clear from the fact that the defects pointed out at the beginning of the nineteenth century, are, to a large extent, the same as those pointed out by Brinklow in the sixteenth century.5

Footnote 5: Above 232.

## 3 Maritime law

As with commercial, so with maritime law, its main outlines were beginning to assume their modern aspect during this period. This fact emerges clearly from the treatment by the court of Admiralty and by the writers of the period of some of the principal topics of this branch of the law. The topics with which I propose to deal are--The Ownership and Possession of Ships; the Master

### The Law Merchant

and Crew ; the Contract of Carriage ; and, Some Incidents of the Contract of Carriage.

#### The Ownership and Possession of Shifts

The usual methods of acquiring the ownership of a ship were either by building her, or by capture followed by condemnation,1 or by transfer from an owner. Such a transfer was usually effected by bill of sale, or by ordinary deed followed by delivery. The delivery was the essential matter ;2 but it could be effected by bill of sale without delivery when the ship was at sea.3 Sometimes the seller warranted his title to the ship.4 Suits turning upon questions of title occur fairly frequently--many of them are suits by the true owner against the purchasers from pirates.5 They illustrate the force of Malynes' caution to the merchants, that it is "'dangerous to fraight unknown ships which may be subject to other men's actions, and that in many places where wind and weather may command them to enter."6 In order to settle questions of title, the court of Admiralty would declare the title at the suit of a plaintiff who complained that another was wrongfully asserting title to his ship.'

Footnote 1: http://www.sds.org/

Footnote 2: http://www.sds.org/

Footnote 3: http://www.sds.org/

Footnote 4: http://www.sds.org/

A claim upon a ship might arise as the result of the hypothesaction of the ship by the owner or master to a creditor,8 or, at this period, from the fact that the claimant had done work upon the

## 6 Ownership of Ships

1 In such a case the creditor could realize his debt by arresting the ship, and taking the necessary proceedings in the court of Admiralty. The court could order sale and, if there was more than one creditor, distribute the proceeds among them.2 If it was a part owner who had thus pledged his share, the others could intervene and pay out the creditors.3 In that case they could recover against their partner the amount which they had thus paid, in accordance with the ordinary rules relating to partnerships.4

Footnote 2: The author would like to thank the anonymous referee for his help.

Footnote 3: The author would like to thank the anonymous referee for his help.

Footnote 4: This was supported by the National Science Foundation of China under grant number 10000100010001000010the expense of fitting the ship up for the voyage; he was neither liable for the losses nor entitled to the profit of the voyage;1 but in case the ship perished the other partners were liable to him for the value of his share.2 The court of Admiralty would in such a case make the co-owners give him security for the value of his share.3 Should the majority of the co-owners refuse to continue in partnership with the minority, they must all agree to sell at a value, or to employ the ship on a voyage. If this could not be done, recourse, at this period, could be had to the court of Admiralty, who could settle the matter on equitable terms.4 In later law, apparently, the only remedy of the minority was to sell their shares to another.5

Footnote 1: Malynes, op. cit. ziz.

Footnote 2: Ibid. The rule was justified on the ground of public policy--\* ships were made and invented in common for the use of al men ... and ordained for sailing, and not to be idle and unoccupied."

Footnote 3: Abbott, op. cit. 85; see ibid 87-93 for the controversy as to the power of the Admiralty to take these stipulations, which was ultimately settled in George II.'s reign in favour of the Admiralty.

Footnote 4: Malynes, op. cit. ziz; Welwood, op. cit. 41.

Footnote 5: Abbot, op. cit, gi.

Footnote 6: Op, cit. Tit. vi: " Of persons ordinary in ships."

Footnote 7: Ibid ; Mihalynes, op. cit. ziz, gives the practical advice that, "it is very convenient if the owners be in place that the master do not let the ship to freight, or undertake any voyage without the privity knowledge and advice of the owners or some of them"; see Thomas, Early Mayor's Court Rolls, 243-245.

#### The Master and Crew

Welwood describes for us the ordinary complement of a trading ship of this period as follows: (1) The master--"he who bears charge over all the ship"; (2) The steersman, who was often the same person as the master--"he who directs the ship in the course of her voyage"; (3) the master's mate; (4) the shipwright--"he who attends upon the mending of the faulty parts of the ship"; (5) the boatsman--"he who bears the charge of the ship's boat"; (6) the clerk--"whose office is to write up and make account of all things received or delivered in the ship, together with all the ordinary and needful expenses made upon ship and kippage"; (7) the cook--"a most necessary member as long as there will be bellies"; (8) the ship's boy--"who keeps her continually in harbours"; (9) the mariners.

Here we need only consider the legal position of the master and the mariners.

The master's relation to the owner was determined partly by the terms of the contract of employment, and partly by the common law of the sea.7 The common law of the sea gave him ordinary powers to freight the ship, to take passengers, to provide necessaries, and to do ordinary repairs.8 It also gave him extra The Master and Crew 249

ordinary powers to borrow money in a foreign country for the needs of the ship, and, for that purpose, to hypothecate ship and cargo or freight.1 It would seem that these powers were recognized in the Middle Ages in the commercial courts of the Italian cities; and that the transactions themselves were really a variety and a development of the loan on bottomy.2 The debt so contracted took precedence of all other charges on the ship;3 and, as in the case of the loan on bottomy, the money borrowed was not repayable unless the ship reached its destination. Further, the master had the power, in case of necessity, to sell the cargo or the ship.4

Footnote 1: Wehrod, op. cit. Tit. viii; Select Pleas of the Admiralty (S.S.) i 92-93 (1541)--hypothecation of ship and freight in Sicily by the master; ibid ii 68 (1538); ibid ii 191-192 (1599)--sentence of condemnation for money due upon an hypothecation by the master.

Footnote 2: Bensa, Histoire du contrat d'assurance au moyen age (French tr.) Iq, I5; for the development of the contracts of bottomy and respondentia see below 26T-263.

Footnote 3: Ibid i5, citing 'Pegolotti, La practica della mercaturera cxxx p. I32.

Footnote 4: Welwod, op. cit. Tit. viii; "or to sel some of the merchants goods, provided that the highest price that the rest of the goods is sold for at the market be repaid to the merchant: which being done, the freight of those goods so sold and repaid, shall be repaid by the master to the owner of the ship . . except the ship perish in the voyage; in which case only the price that the sold goods were bought for shall be rendered," ibid.

Footnote 5: Ibid Tit. xv.

Footnote 6: Ibid i3, Malynes, op. cit. IzI--" because herein they do represent and undertake the person of the master, a'd these privileges are granted to the owners for the good of the common wealth and the augmentation of traffic."

Footnote 7: Welwod, op. cit. Tit. xv; Malynes, op. cit. IzI--" if there were cause of mending the ship, and the master should spend the same another way, the owner is to satisfy the creditor notwithstanding "; it was otherwise it the master was acting beyond his powers, e.g. if he borrowed money to mend a ship which did not need mending.

When the master had acted within the scope of the powers conferred upon him by his contrac: of employment, or by the law, the creditor could enforce his claims against either the owner or the master;8 and, conversely, the owner could enforce any rights of this kind acquired by the master.9 Thus contracts made by the master bound the owner even though he had not consented to them, and even though any property acquired under them had been appropriated by the master.10 It is clear that this is an extension of the principle of agency as recognized by the common law at this period. We have seen that, as in the Middle Ages, the common law made the principal liable only if he had expressly authorized or subsequently ratified the act done.11 But, according to maritime law, he was liable also for acts done by the agent within the scope of his apparent authority. This was a departure from common law principles which, even at the beginning of the nineteenth century, Abbott thought it necessary to explain and

### The law merchant

justify.1 We shall see that the justification which he put forward--the agent " is seldom of ability to make good a loss of any considerable amount "--is in reality the substantial basis of the extensive modification of common law principles, which is involved in the modern doctrine of the employer's liability for the torts of his employe.2

Footnote 1: Op, cit. 123-124--" the great responsibility which the laws of commercial nations cast upon the owners for the acts of the master ... has appeared to many persons at first view, to be a great hardship; but ... it should always be remembered that the master is ... appointed by the owners; and by their appointment ... they hold him forth to the public as a person worthy of trust and confidence; and if the merchants ... could not have redress against those who appointed him, they would often have just reason to complain that they had sustained an irreparable injury through the negligence or mistake of the owners; as the master is seldom of ability to make good a loss of any considerable amount."

As in the case of the contacts of his employes, so in the case of their torts, the liability, according to maritime law, of the master or owner was also somewhat different from his liability at common law. We have seen that at common law the master or principal was only liable if he had previously authorized or subsequently ratified the tort,3 But according to maritime law the liability of the master of a sh:p was more extensive; and, at the end of this period, it was recognized (after some hesitation) that the owner also was subject to this extended liability. I shall consider firstly the case of the master of the ship, and secondly the case of the owner.

Footnote 1: Op, cit. 123-124--" the great responsibility which the laws of commercial nations cast upon the owners for the acts of the master ... has appeared to many persons at first view, to be a great hardship; but ... it should always be remembered that the master is ... appointed by the owners; and by their appointment ... they hold him forth to the public as a person worthy of trust and confidence; and if the merchants ... could not have redress against those who appointed him, they would often have just reason to complain that they had sustained an irreparable injury through the negligence or mistake of the owners; as the master is seldom of ability to make good a loss of any considerable amount."

Footnote 2: Below 474-475, 477-479: Above 227-228.

Footnote 3: Select Pleas of the Admiralty (S.3) ii 197-198 (1600).

Footnote 4: We!wod, op, cit. Tit, ix; but Malynes, op, cit. 103, does not say that the matter is liable to pay double.

(i) It was quite clear that the master was liable to the merchant and passengers, not only; for his own torts,4 but also for the torts of the crew. He, as well as the actual tort feasor,5 was liable ; and liable, some said, to pay double the damage.6 This extension of the master's liability was, to a certain extent, based upon the Roman rule as to the quasi-dellectual liability of nautxe coupones and stabularii for the delicts of their employes.7 It was justified, as the principle of employer's liability is justified to-day, on the ground of public policy. Welwod explains that this liability is "most justly laid upon the master, because he ought to hire good men. ... For it is in his own free will to choose his company, and he should not be ignorant of the men he hath to do with; otherwise,

## 25 The Master and Crew

if the master were not so obliged . . there would be a great occasion of stealth and spoil."1 And it would seem that his liability was even more stringent than that cast upon an employer in our modern law. Malynes and Welwod tell us that for, " whatsoever shall happen through fault negligence or chance which might be avoided, _or if it be done by the passengers or other than himself or his company_, the master is answerable."2 The words " chance which might be avoided " show that he was not quite in the position of an insurer--in fact to have held him liable as an insurer would have been contrary to the principles of civil liability recognized by the court of Admiralty.3 But his liability for damage alone by passengers or third persons put him almost into that position, as was shown by the case of _Morse z. Slue.4_ In that case an action was brought against the maser of a ship lying in the Thames by the owner of goods on board the ship, because these goods had been stolen by thieves. The master proved that the ship had been guarded in the usual way. It was ultimately held that the case must be decided on common law principles, because the ship was not within the jurisdiction of the court of Admiralty, and that the master was liable as a carrier.5 But it was quite arguable that, even on the principles applied by the court of Admiralty, he could have been held to be liable.6 According to these principles his liability would depend upon whether he could show that the damage was quite unavoidable.

Footnote 1: Op, cit. Tit, ix; cp, Dig, 4, 9, r, I,--\* Maxima utilitas est hujus edici, quia necesses est plerumque ecorum fidem sequi et res custodiae ecorum committee. Ne quisquam putet graviter hoc adversus eos constitution nam est in isporum arbitrio, ne quem recipient, et nisi hoc esset statutum, materia dartur cum furibus adversus eos quos recipient couandi, cum nz nunc quidem abstineant hujusmodi fraudibus." It is interesting to observe, Dig. 4, 9, 7, 2, 4, that " si quid naute inter se damni dedertin hoc ad exercitorem non pertinet"--an anticipation of the doctrine of common employment.

Footnote 2: We!wod, op. cit. Tit, ix; Malynes, op. cit. To3.

Footnote 3: Below 258-259.

Footnote 4: Reported 2 Keb. 866; 3 Keb. 72, 12, 135; 2 Lev. 69; r Vent. Igu, 238; r Mod. S5; T. Raym. 220; the date of the case is 1672.

Footnote 5: See r Mod. S5 n. a.

Footnote 6: See the argument for the plaintiff in 3 Keb. 117; 173.

Footnote 7: Waltham v. Mulgar, Moore (K.B.) 776.

(ii) The question whether the owner was liable for the torts of the master or crew was by no means clearly settled at the beginning of this period.

The common lawyers held that he was not liable. In 16c6 7 it was argued that the owner was liable in a case in which an English ship, provided with letters of marque, had attacked a vessel belonging to a country with which England was at peace. It was said that in matters which affected public policy owners were at civil law always liable for the torts of their employes; and the analogy of the common law liability of the custom house

### The law merchant

officer and the marshal was relied on.1 But Popham denied that any such general principle existed at common law. He admitted that a master might be liable if, having sent his servant to do one kind of illegal act, the servant had done another kind of illegal act: he would not be liable if, having sent his servant to do a legal act, the servant had done an illegal act.2 The civilians, on the other hand, were not quite clear as to the extent of the owner's liability. According to Welwod and Malynes the owner was not liable for the master's torts;3 though he might be liable for the torts of a mariner, especially if the mariner had actually been hired by himself.4 But others thought that the owner was liable to the merchant for the negligence either of the master or of the crew;5 and in support of this view the quasi-delictual liability for the damage done by nautae coupones and stabularii imposed upon the exercitor, i.e. the owner or person on whose account the ship was worked, could be adduced.6 Whether on this ground or not, owners were held liable by the court of Admiralty for the damage done by their employes in the late sixteenth and early seventeenth centuries.7

Footnote 1: "Et les Civilians argueont en Court, et Dodderidge prist un diversity que en affaires publick les servants acts chargeont le master et le master respoignera pur son servant. Et il cite 7 Eliz, Dyer lo le servant conseal customers: et 39 H, 6 lou le servant misexecute l'office de Marshal (or some of these cases see vol. iii 387). Et quia triffique est publick entercourse pu le veal del Realm, cestuy que mista un neive en traffique doit provider servants que ne rairon publique offences "; later " Dodderidge dit que le Ley Civil est que la maste: respondra en touts publique cases," ibid at p- 777.

Footnote 2: "Il prist cest rule lou le master mista son servant de faire un act illoyal, le master respoignera pur le servant sil mistake en le feazance del act, mes lou il mista son servant de faire un loyal act come licy de prender les biens des enemies le Roy, et il rist les biens des amies, le master ne respondra."

Footnote 3: Welwod, op. cit. Tit. av; Malynes, op. cit. 121. 4 Ibid

Footnote 4: Select Pleas of the Admiralty ($\\mathrel{\\hbox{\\raise 0.86pt\\hbox{$>$}\\kern-7.499886pt\\kern-3.749943pt\\hbox to 0.0pt{\\hss\\sl\\char 37}}}$S) i3x (1544-1545)--in such a case the master and crew were liable to indemify the owner.

Footnote 6: Above 250 n. 7; cp. Marsden, Collisions at sea (6th ed.) 63 n. 1.

Footnote 7: Select Pleas of the Admiralty (S.S); il laxi (1575-1576) laxvi.

Footnote 8: Above 228-229. 9 (169t) 2 Salk. 440; 3 Mod. 321.

We have seen that, at the end of the seventeenth century, the strict common law principles which governed the liability of masters or principals for the acts of their servants or agents, were wholly unsuited to the commercial condition of the country.8 It is not surprising, therefore, that Holt should find in these civil law principles a useful technical means of making a very necessary development in the law. In the case of \_Boson v. Sandforid_9 he held that a shipowner was liable for damage to goods caused by the master's negligence; and he based his decision on the broad principle that, " whoever employs another is answerable for him, and undertakes for his care to all that make use of him."10 It is clear that this principle was applicable to other cases besides casesThe Master and Crew 253 of shipowner and master ; and we shall see that Holt, by giving it a wide extension, introduced into English law the modern principle of the employer's liability for the torts of his employe, and helped to free the common law from the restrictions imposed by the idea that the employer's liability for these torts depended solely on the law of agency.1

Footnote 1: Below 474-475.

I think therefore, that the recognition by the common law of these new principles owed something to the rules which, from the basis of the civil law, had been evolved in the court of Admiralty.2 It was, in fact, only natural that, as the necessities arising from a larger commerce were felt in the court of Admiralty at an earlier period than in the courts of common law, we should get in the court of Admiralty the earliest traces of the existence of a principle of modern law which was introduced in consequence of those necessities. In the court of Admiralty the principle was based on the technical reasoning and analogies derived from the civil law : at the common law it was based mainly on expediency, and perhaps to some extent upon certain exceptions to the mediaeval rules which governed an employer's liability. Here, as in other cases, ideas were borrowed almost unconsciously, when the influence of the commercial business, of which the common law courts had deprived the court of Admiralty, began to be felt. Of the manner in which these principles were developed by the common law I shall speak more fully in the following chapter.

Footnote 2: We shall see that there are certain earlier cases in which a larger liability had been hinted at, below 453, 473 ; but it was ir the case of Boson v. Sandford z Salk. 440 that the new principle was for the first time firmly established, below 474.

The master's relation to his crew was founded mainly on the provisions to be found in the laws of Oleron.3 We see the old rule that the master should consult with his crew as to the expediency of making a start from port,4 as to the necessity of making a jettison,5 or of borrowing money on a foreign port.6 We see the old rules as to the case of a seaman who had become sick in the service of the ship.7 Similarly the law as to rights and duties of the crew were founded mainly on the laws of Oleron. We see the old rule that the mariner was entitled to carry a small portion of merchandize, or to receive compensation if he did not.8 The rule was still maintained that if the ship was cast away, so that no freight was earned, no wages were payable 9

### The law merchant

--"freight is the mother of wages." On the other hand, if the voyage was abandoned, half wages were due ; \[1\] and these rules existed in substantially their old shape down to the passing of the Merchant Shipping Act of 1834."

### The Contract of Carriage

At the present day "a trading ship is employed by virtue of two distinct species of contract : _First_, the contract by which an entire ship, or at least the principal part thereof, is let for a determined voyage to one or more places ; this is usually done by a written instrument signed ard sealed, and called a _charter party_. _Secondly_, the contract by which the master or owners of a ship destined on a particular voyage, engage separately with a number of persons unconnected with each other, to convey their respective goods to the place of the ship's destination. A ship employed in this manner is usually called a _general_ ship." \[3\]

It would appear from Malynes that he was only acquainted with the first of these methods of employing a ship. If one merchant could not load the ship, several joined to charter her. No ship, he says should be freighted without a charter party,4 and bills of lading should be drawn up to declare the contents of the cargo, and to bind the master to deliver in accordance with the charter party.5 It is clear from his account, and from the specimens of these documents which have come down to us from this period, that these documents had almost attained their modern form.6 Here I shall first of all say something of the charter party

## 6 The Contract of Carriage 255

and the bill of lading ; and, secondly, of the rules which determined the nature of the obligations of the parties to these contracts to carry.

(1) Under the ordinary contract of charter party the master or owner of the ship acknowledges that he has let the ship to a merchant, and promises to make the ship ready by a fixed date to take in the goods provided by the merchant. He promises that he will sail with the first convenient wind to the port stipulated, and that he will deliver the goods in good condition to the merchant or his factor in accordance with the bills of lading. The ship is to remain at that port for a fixed period to take in such goods as the merchant or the factor shall load in her, return to the port from which she started, and deliver the goods in good condition. The master or owner also covenants that the crew shall consist of so many persons, shall be armed in such a way, and shall be furnished with all proper gear. The merchant, on the other hand, covenants with the master or owner to load the ship within the time stipulated, and to pay so much a ton for freight, on the discharge of the goods, and other customary payments such as primage,1 petilodeminage2 or pilotage, and average.3 Both sides bound themselves in a penal clause to fulfil their covenants with the addition, Malynes says,4 of other clauses or conditions designed to prevent future litigation. Instances of such other conditions to be found in charter parties of this period are clauses exempting the owner from liability for accidents,5 providing that certain mischances shall constitute a general average loss,6 or stipulating that the value of any prizes taken by the ship shall be distributed in certain proportions.7

Footnote 1: A small payment to the master for his care and trouble, Abbott, op. cit. 270; but in the seventeenth century both primage and average were explained as a gratuity to the seam for care of the cargo, Select Pleas of the Admiralty (S.S.) ii lxxii.

Footnote 2: I.e. Petty Lodemanage or pilotage.

Footnote 3: In this connection the word average "denotes several petty charges which are to be borne partly by the ship and partly by the cargo, such as the expense of towing beacomage, etc."; Abbott, op. cit. 270, 271; to be distinguished from general average as to which see below 263-265.

Footnote 4: Op. cit. too.

Footnote 5: Select Pleas of the Admiralty (S.S.) i t37 (1545).

Footnote 6: Ibid i 64 (1562).

Footnote 7: Ibid i 37 (1531).

Footnote 8: Bennett, the History and present position of the Bill of Lading 4-6.

Footnote 9: See Thomas, Early Mayor's Court Rolls 244-245 for a case of 1305-1306 which turns on this custom.

Probably the origins of the bill of lading are to be found in the custom of entering the goods shipped on the ship's book or register ; and the rule, resulting therefrom, that the owner or master was not liable for goods not so entered.8 In the days when the merchants travelled with their goods this entry would be sufficient.9 But when the merchant ceased to travel, and sent the goods to a given consignee, separate documents would obviously become essential;

### The Law Merchant

and it is clear that, if disputes are to be avoided, it will be desirable that each of the parties interested, the consignor, the master of the ship, and the consignee, should have a copy.1 The first of these developments had taken place at the beginning of the sixteenth century. The bill of lading, like the old entry on the ship's register, was the only evidence of the goods loaded; and the owners were not liable for any goods not therein contained.2 The second took place in the course of the same century. There is a clear reference to bills drawn in a set of three in 1539;3 and it was a settled custom when Malynes wrote. He says:4 "Of these bills of lading, there is commonly three bills of one tenor made of the whole ship's lading, or of many particular parcels of goods, if there be many laders; and the mark of the goods must therein be expressed, and of whom received, and to whom to be delivered. These bills of lading are commonly to be had in print in all places and several languages. One of them is enclosed in the letters written by the same ship, another bill is sent overland to the factor or party to whom the goods are consigned, the third remaineth with the merchant, for his testimony against the master, if there were any occasion or loose dealing; but especially it is kept for to serve in case of loss, to recover the value of the goods of the assurors that have undertaken to bear the adventure with you."

Footnote 1: Bennett, op. cit. 6, 7.

Footnote 2: The following statement was made in 1534 in the case of Chapman c. Peers, Select Pleas of the Admiralty (S.S.) i 44-${}^{\\mbox{\\tiny{\\sf{\\sf{\\sf{\\sf{\\sf{\\sf{\\sf{\\sf{\\sf{\\sf{\\sf{\\sf{\\sf{\\sf{\\sf{ \\sf{\\sf{ }}}}}}}}}}}}}}}}}$ Proprietarii et magistri seu exercitores navinut courum bursarii non tencur neque debutur auf courum aliquis non ten-entur aut debet responder pro bons aut rebus in navibus suis investis seu impositis que in libro raciocinii Angliche the bole of ladyg communter dicti et nuncupati per dicto s mercatores aut courum factores con inscribuntur me:cionantur aut insermuntur'; see Diamond Alkali Export Corporation v. Bourgeois \[1927\]3 K.B, at p. 449 where McCardie, J., accepts this view of the origin of the bill of lading.

It is clear from this passage of Malynes that when he wrote the form of the bill of lading had become stereotyped; and this is borne out by the records of the court of Admiralty. The earlier specimens are somewhat informal in character; but, by the middle of the sixteenth century, they are very near to their modern form.5 Thus a bill of lading of the year 15346 declares that John Desallez, merchant of London, has loaded at Rouen in a ship called the George of Legh, the master of which is Thomes Karre, so much wine and so many apples, marked with his mark, to be carried to London, "exceptional the casualties and dangers of the sea." The master promises to deliver the goods to the said merchant, his factor, or assigns, he or they paying the freight, primage, and average.

The Contract of Carriage 257

It is clear from the form of the bill of lading that the parties intended that delivery should be made to the consignee, to whom the bill has been sent. It is obvious, therefore, that it was a document entitling the consignee to the goods,1 provided that he pays the freight.2 But these bills usually provided that delivery should be made to the consignee " or his assigns." Hence, if it were assigned, the assignee could demand delivery. In other words the assignment of the bill of lading passed the property in the goods. This rule was probably established in the court of Admiralty in the sixteenth century;3 and it was accepted by the courts of common law in 1697. Holt, C.J., said that " the consignee of a bill of lading has such a property as that he may assign it over. And Shower said that it had been adjudged in the Exchequer."4

Footnote 1: We get in 1544 and 1546, Select Pleas of the Admiralty (S.S.) i Iz7, Iz8, the proviso that if one bill is performed the otheis are to lose their effect ; as Mr. Bennett says, op. cit. ro, " these provisions seem clearly to contemplate the transfer of the bill of lading as a document of title to the goods shipped--if it had not been customary for the delivery of the goods to be made to the holder of the bill of lading the words which provide that if one bill should be performed the otheis should be of none effect, would be meaningless."

Footnote 2: See Select Pleas of the Admiralty (S.S.) i Iz9,

Footnote 3: See Hurlocke and Saunderson c. Colllett (1539) Select Pleas of the Admiralty (S.S.) i SS8, 89, .

It is probable that the court of Admiralty was prepared to go further, and hold that it was not only assignable but negotiable. In Charles L's reign a shipmaster was sued in the Admiralty for delivering a bar of silver to one who had fraudulently obtained the bill of lading. Judgment was given for the defendant; but the owner of the silver got a prohibition and brought an action at common law.5 It is probably this action of the common law courts which has prevented a bill of lading from becoming a negotiable instrument. Though i: resembles a negotiable instrument in the mode by which it can be transferred, it lacks the essential quality of negotiability--a bona fide holder for value cannot get a good title from a holder who had none, and it is not assignable " free from equities."6 It is simply a contract to carry certain goods which operates as a document of title to these goods. But in one respect the court of Chancery modified the strictness of the common law rules. We have seen that it gave to the unpaid vendor the right to stop the goods in transitu on the bankruptcy of the consignee.7 But as yet neither the common law rules as to bills of lading, nor the doctrine of stoppage in transitu, have been elaborated. This will be the work of the eighteenth and nineteenth centuries.

The _Laws_ MERchant

The _records_ of the court of Admiralty, and, at the close of this period, the cases decided in the common law courts, show that the obligations undertaken by the parties to the contract of carriage were giving rise to a number of definite rules of law.

The master or owners were liable if they failed to supply the ship at the stipulated time. In such a case the merchant could decline to employ the ship, or, if he employed her, he was entitled to recover any damages which he had sustained 1 They were also liable if they failed to deliver the goods,2 or if the goods arrived in a damaged condition owing to negligent stowage,3 to the unseaworthiness of the ship,4 or to any other form of wrongful act;5 and this liability for the safety of the goods lasted till the cargo was discharged on to the quay or into a lighter.6 We shall see that losses occurring through acts done to preserve the ship and cargo were governed by special rules.7 But how far the master or owners were liable for losses, other than those resulting from acts done to preserve the ship and cargo, which did not arise through their fault, was not very clearly settled in this period.8 This uncertainty was to a certain extent aggravated by the different rules laid down by the civilians and the common lawyers.

Footnote 1: Iblid Tit. vii--" the master also must be answerable for that harm which the rats for want of a cat do in the ship to any merchandise."

Footnote 2: We have not been able to use the same logic as the one for the purposes of the paper.

Footnote 3: The author is grateful to the anonymous referee for providing the The COURTACT OF CARIAGE 259

he would not be liable. But the common law did not ground civil liability upon $,$dolus $,$or $,$culpa. It grounded it upon $,$the fact that the defendant $,$had $,$done $,$some $,$act $,$to $,$the $,$damage of the plaintiff, under such circumstances that the defendant, $,$either $,$by his own contract or $,$by the $,$law, was obliged $,$to compensate $,$the plaintiff.1 It followed from this principle that a bailee was not excused if the property entrusted to him was damaged by accident $,$; $,$and $,$this strict rule was maintained all through this period.2 Now a carrier is only a bailee of a particular kind. It followed therefore that a carrier, whether by land or water, was not excused merely because the goods had perished without his fault--he was not excused, for instance, if they had been stolen, in spite of $,$the fact that he had taken all reasonable precautions against thieves.3 The result was that different rules were applied to determine the carrier's liability according to whether the loss occurred at sea and therefore within the jurisdiction of the Admiralty, or whether it occurred within the body of a county and therefore within the jurisdiction of the common law courts.4

Footnote 1: Vol. iii 375-377:

Footnote 2: Holmes, Common Law r78-18o; So:thcott $,$v. Bennet (r6or) $,$4 $,$Co. Rep. 83b; vol. iii 344; above vol, vi 457-452.

Footnote 3: Woodlife's Case (1597) Moore 462; Holmes, op. cit. 78I; Symons v. Darknoll (r628) Palmer 533, Kenigston (r648) Aleyn 93, cited Holmes, op. cit. 79I. 4This is brought out by the case of Morst v. Slue (r672) i Mod. 85, cited Holmes, op. cit. 79I. 89, cit. 89, in $,$I Mod. 85, n. $,$a it was said that, "the master could not avail himself of the rules of the civil law, by which masters are not chargeable _pro damno fatail._"

Footnote 4: This is brought out by the case of Morst v. Slue (r672) i Mod. 85, cited Holmes, op. cit. 79I. 90, cit. 79I. 91, 92, 93, 94, 95, 96, 97, 98, 99, 100, 101, 102, 103, 104, 105, 106, 107, 108, 109, 110, 111, 112, 113, 114, 115, 116, 117, 118, 119, 120, 121, 122, 123, 124, 125, 126, 127, 128, 129, 130, 131, 132, 133, 134, 135, 136, 137, 138, 139, 140, 141, 142, 143, 144, 145, 146, 147, 148, 149, 150, 151, 152, 153, 154, 155, 156, 157, 158, 159, 160, 161, 162, 163, 164, 165, 166, 167, 168, 169, 170, 171, 172, 173, 174, 175, 176, 177, 178, 179, 180, 181, 182, 183, 184, 185, 186, 187, 188, 189, 190, 191, 192, 193, 194, 195, 196, 197, 198, 199, 200, 201, 202, 203, 204, 205, 206, 207, 208, 209, 210, 211, 222, 213, 214, 215, 216, 217, 218, 229, 230, 231, 232, 233, 234, 235, 236, 237, 238, 239, 240, 241, 242, 243, 244, 245, 246, 247, 248, 249

### The law merchant

liability for damage to the goods carried, so in respect to freight and wages, the common law at this period took a stricter view of the obligation of the ship that the civil law. The common law judges seem to have held that the ship earned no freight, even though part of the voyage had been performed, and even though the failure to complete it was caused by no fault of the master.1 On the other hand, the civil law held in such a case that freight and therefore wages were due for the part of the voyage performed;2 and it is this more ecuitable principle which has prevailed.3 Similarly Malynes repeats the rule laid down in the laws of Oleron that if the ship was wrecked, the merchant must pay freight on the goods saved.4 He must also pay freight if the ship became disabled, and the goods were transhipped and so carried to their destination.5 Any deviation from the proper route, unless caused by inevitable necessity, was a breach of the contract.6

Footnote 1: Bright v. Cowper (161z) i Brewnlow zr--voyage not completed owing to capture by pirates.

Footnote 2: Malynes, op. cit. 9S--" but if the ship in her voyage become unable without the master's fault ... the master may either mend his ship or freight another. But in case the merchant agree not thereunto then the master shall at least recover his freight so far as he hath deserved it "; Mollyo Bk. II. c. 4 SS 7, after citing the case of Bright v. Cowper, says that it would have been decided differently by the civil law, see the passage cited Abbott, op, cit. 313; it was the rule laid down in the laws of Oleron SS 4, above vol. v 122.

Footnote 3: Anon, (170r) i Ld. Raym, 639; Jones v. Hart (170o) ibid 739; Abbott, op. cit. 294 seqq.

Footnote 4: Op, cit. 101; vol. v 122.

Footnote 5: Laws of Oleron SS 4, vol. v 122; the principle was followed by the House of Lords in Lutwidge v. Gray (1737), cited Abbott, op. cit. 29S-30I.

Footnote 6: Select Plas of the Admiralty (S.S.) i xli; Malynes, op. cit, izr; Early Mayor's Court Rolls z43.

Footnote 7: Welvod, op, cit. Tit. vii.

Footnote 8: Coke c. Fliett (154z) Select Plas of the Admiralty (S.S.) i 15; Gourden c. Lovelake (155z) ibid ii 82-83.

Footnote 9: Vawse c. Bygot (154o) ibid i 13C-III; Bell c. Bryde (1553) ibid ii 84--" whose-ever receives any goods out of any ship or boat at the place of their discharge is bound first and before all to provide and pay theleigh ..., due to such ship or Voa to the master purser or marines of the same, immediately after the discharge of such goods, or at least according to the contract of affeigment made and entered: into."

Footnote 10: Thurstone c. More (1557) ibid ii 9S-99.

Footnote 53:

## The Contract of Carriage 261

Hakluyt's pen. Perhaps the best is that related in the last of Mr. Marsden's Select Pleas.1 A London ship was chartered for Lagos. While off Lagos it was attacked by Portuguese, captured, and the crew confined under hatches. The crew blew up the deck with gunpowder and with it their captors, and so regained possession of their ship. They then worked the crippled ship back to London with her cargo intact. It is satisfactory to learn that the court gave the ship half her freight to the use of the owners and crew.

Footnote 1: Steveins c. Savidge (1602) Select Pleas of the Admiralty (S.S.) ii 205-206.

Footnote 2: Smith, Mercantile Law (1th ed.) i 576, 577 n. g. Above 24 S-249.

Footnote 3: Cargo ex Sultan (rSS59) Sw. Ad, at p. Sto; cp. The Atlas (rSS27) z Hagg, Ad; at p. 58.

Footnote 4: Ibid. 6 Smith, Mercantile Law i 574; cp. Bl, Comm. ii 458, 459.

Footnote 7: Smith, Mercantile Law i 575; i, Comm. ii 459; Malynes, op. cit. 122.

Footnote 8: Select Pleas of the Admiralty (S.S.) ii 76; for earlier instances of the contract in the Admiralty records see ibid i 53 (1536), 92-93 (1541); ii 77 (1573).

Footnote 9: Op. cit. 122-123.

Footnote 10: Bensa, Histoire du Contrat d'Assurance au Moyen Age (French tr.) I4-15.

#### Some Incidents of the Contract of Carriage

Under this head I shall consider certain incidents of the contract of carriage by sea, which, in this period, had already given rise to a number of legal rules.

#### Bottomy and Respondentia

If a ship is in a foreign port; either the owner or, in case of necessity, the master,2 can borrow money on the security of the ship, or of ship cargo and freight. A loan thus contracted is called a loan upon "'bottomy"--a Flemish term derived from the figurative use of the bottom or keel to express the whole ship.4 Similarly the owner of the cargo, or the master in case of necessity, could borrow money on the security of the cargo laden on the ship. To such a loan the term "'respondentia " is applied.5 In both cases the lender can only recover the money lent if the ship arrives safely at her destination; 6 and, because the lender takes the risks of the voyage, the interest charged is proportionately high.7

Footnote 11: Ashburner, the Rhodian Sea Law ccsii-cexxiv; Velwod, op. cit. Tit, xiv,

The term bottomy first occurs in the records of the court of Admiralty in 1593;8 and we have a reference to the contract of respondents (though not under that name) in Malynes' work.9 But both contracts were well enough known in Italy in the fourteenth century; 10 and, in their modern form, they are developments of very much older contracts. In Greek law, in Roman law under the name of _pecunia trajectitia_, and in early medieval law, we meet with contracts of loan, under which the money lent was only repayable if the ship arrived safely.11 Eut these earlier contracts differ from the later contracts of bottomy and res

### The law merchant

has pointed out that the pecuria trajectitia gave the creditor no lien on the ship or cargo--indeed the borrower was not necessarily the owner of either. The creditor had only a general lien on the goods of the debtor, if this lien had been expressly conferred upon him.1 But gradually the practice grew up of making the property subject to the risk primarily liable to pay the debt. This development was beginning to take place in Italy in the thirteenth century.2 When it was complete, the lcan on bottomry acquired its distinguishing characteristic of conferring upon the lender a lien on the ship, in addition to the power to enforce payment from the owner personally;3 and the same consequences followed from the contract of respondentia made by the owner of the cargo, or by the master acting as his agent.4

Footnote 1: Bensa, op. cit. 14-': Le preteur ne jouissait d'aucune garantie speciale sur les choses sourises au risque, precisemeat parce que rien ne demontiat qu'elles apparti tinssent a l'emprunteur; il n'avait que droit de gage general sur tous les biens presents ou futurs de son debiteur, et ce droit lui meme resultait d'une clause de style par laquelle le debiteur autorisuit le cerancier a se mettre de lui meme en possession des biens et a les vendre sans intervention de justice."

Footnote 2: "Peu a peu a l'obligation generala du patrimonie se substitua l'obligation speciale de l'objet soumis au risque, et le contrat . cera un droit reel . . Cette maniere de contract entree en usage au trezeme siecle, se maintint pendant les siecles suivants avec des changements peu importants,' ibid; cp. Ashburner, op. cit. cexxix-cxcxxi, for instances of documents in which there is a special pledge of the ship, or of specified goods, or of all the borrower's goods.

Footnote 3: Park, Marine Insurances (Ist ed., 469.

Footnote 4: Ibid; Bensa, op. cit. 14-15.

Footnote 6: Abbott, Merchant Shipping (Ist ed.) 209; Stainbank v. Fanning (1S5I) II C.B.

A little later a further development took place, to meet the most usual case in which the loan on bottomry or at responding was made--the case where it was made by the master in case of necessity.5 Here, instead of giving rise to a merely personal right, it created a real right. No personal liability was incurred : the property over which the lien is given was solely liable.6 In some countries this species of loan on bottomry or at responding wholly superseded similar loans contracted by the owner of ship or cargo.7

Footnote 5: Ist ed., 469, 470.

Thus the contracts of bottomry and respondentia assumed their modern form, and fell apart from those contracts of loan under which money was borrowed (to be repaid on the prosperous termination of the voyage) simply on the personal credit of the borrower.8 The former, as M. Bensa says, originate, not in the classical Roman law, but in the development of that law which

## 3 The contract of carriage 263

took place in the commercial cities of Italy in the Middle Ages.1

Footnote 1: As M. Bensa has shown, op, cit. 11-13, the distinguishing feature of these contracts, and their essential novelty, have been obscured by the speculations of the jurisdic of the fifteenth and sixteenth centuries and later, who were intent upon proving that they were the same as the pecunia trajecttiti of Roman Law, and that they were not usurious; as M. Bensa says, at p. 17, these contracts in their modern form have their roots in the commercial customs of the Middle Ages ; it may be noted that they are confused by Malynes, op, cit. 122; but not by Welwood, Tit. xiv, who in that title only deals with " money lent to sea called _Nautirum Peoms._"

We have seen that in all these varieties of contract the lender took the risks of the voyage ; but only the risks of the voyage. " Therefore if the money miscarry either before the voyage begun or after the term appointed for the full loan, then the peril pertains to the borrower thereof and not to the lender."2 Similarly, if the money were lost by the negligence of the borrower, he must repay it.3 The records of the court of Admiralty show that at this period some of these principles, applicable to loans on the personal credit of the borrower, were applied also to loans on bottomry. In the case of _Austen c. Cattelyn_ (1541)4 it was contended that money borrowed by the master for the use of the ship was repayable, although the ship had been lost, because (as the lenders alleged) she was unseaworthy from the start, and the master, having discharged the greater part of the cargo, had deliberately cast away the ship with the rest of the cargo, in order to avoid payment of the loan.

Footnote 2: We have seen that the laws of Oleron provided that when a jettison was made to save the ship, the ship and cargo, if saved, must contribute to the loss. We have seen, too, that the rules laid down in these laws were modified by an ordinance of Edward I.,

Footnote 3: We have seen that the laws of Oleron provided that when a jettison was made to save the ship, the ship and cargo, if saved, must contribute to the loss. We have seen, too, that the rules laid down in these laws were modified by an ordinance of Edward I.,

Footnote 4: We have seen that the laws of Oleron provided that when a jettison was made to save the ship, the ship and cargo, if saved, must contribute to the loss. We have seen, too, that the rules laid down in these laws were modified by an ordinance of Edward I.,

### The law merchant

which provided that the ship should lose the freight on the goods jettisoned, but should not contribute to such a loss.1 During this period the question what losses should be considered to be general average losses, and what property was liable to contribute to such losses, was worked out in some detail.2

Footnote 1: Vol. v 123, 124.

Footnote 2: Welwod, op. cit. Tits. xvii-xxi; Malynes, op. cit. rog-II4; Ridley, A view of the Civil and Ecclesiastel Law r22-r24.

The principle of the law is contained in the Digest. " It is provided by the Rhodian law that if merchandize is thrown overboard to lighten the ship, the loss occasioned for the benefit of all must be made good by all."3 It was necessary that the goods should be deliberately cast away to ensure the safety of the rest; and so the accidental destruction of part of the ship's gear in a storm gave rise to no such claim,4 since it was not deliberately destroyed to save the ship.5 The writers of this period repeat the older rules as to the necessity for a previous consultation before a jettison was made; 6 and these rules lived on in some continental codes.7 As Abbott pointed out, they were not very useful for the purpose for which they were invented, i.e. to secure that a jettison should only be made in a case of real danger; 8 and they have long ceased to be rules of Engish law.9

Footnote 3: Dig. 14, 2, r.-4 : Lege Rhodia cavetur, ut, si levande navis gratia jactus mercium facts est, omnium contributione sarciatur quod pro omnibus datum est."

Footnote 4: Welwod, op. cit. Tit. xvii.

Footnote 5: Dig. 14, 2,

## 2 The Contract of Carriage 265

ship was in fault.1 It was held also in 1575 that, where some part of a cargo of clothes had been taken by the king of Denmark for toll, contribution must be made by the merchants whose clothes had not been taken.2 But it was laid down by the House of Lords in 1698, in the case of _Sheppard v. Wright,3_ that no case for a general average contribution arose, unless it was the loss of the goods which perished which contributed to the saving of the goods which were preserved. So that where a ship was pursued by enemies into a harbour, and there unloaded part of her cargo, and then some days after the ship with the cargo left on board was captured, the cargo unloaded was not liable to contribute to the loss.

Footnote 1: Tit, xx ; cp, Select Pleas of the Admiralty (S.S.) ii lxxiv ; below 266,

Footnote 2: The Elizabeth, Select Pleas of the Admiralty (S.S.) ii lxxiv ; below 266,

Footnote 3: Shower P.C, r8 ; cp, House of Lords MSS, iii no, r268 ; and this it seems was in accordance with the civil law as applied in the sixteenth century, Hicks v. Palington (r590) Moore, K.B., 297.

At this period it was settled that in case of a loss necessary to the preservation of ship and goods, both ship and goods contributed.4 In later law the freight also contributed;5 but it is not clear that this was the rule at this period. Clothes, the personal effects of passengers, and provisions, did not contribute.6 But jewels, articles of clothing, and other things carried as cargo and paying freight, were liable to contribute,7 At this period, the goods lost were reckoned at their cost price if the loss occurred before the middle of the voyage; but at their market price at the port of destination, if the loss occurred after the middle of the voyage.8 But later English lawyers evolved a more logical rule. If the ship gets to its port of destination the value is taken as at that place, on the logical ground that "the person whose loss has procured the arrival of the ship at the place of destination should be placed in the same situation with those whose property has arrived at that place; which can only be done by considering _his_ goods as having arrived there also." On the other hand, if the ship is compelled to return to the port from whence it started, the goods only contribute according to the cost price.9

Footnote 4: Welwood, op. cit. Tit, xvi; the civil law rule was otherwise as to clothes and articles of personal adornment, Dig. r4, z, z.

Footnote 5: Welwood, op. cit. Tit, xvi; the civil law rule was otherwise as to clothes and articles of personal adornment, Dig. r4, z, z.

Footnote 6: Welwood, op. cit. Tit, xvi; the civil law rule was otherwise as to clothes and articles of personal adornment, Dig. r4, z, z.

Footnote 7: Welwood, op. cit. Tit, xvi. ${}^{The law Merchant?

_Collision._

We have seen that the rules as to collisions by sea contained in the laws of Oleron were both scanty and primitive.1 If one ship intentionally collided with another ship at anchor, or, it would seem, while under sail, the master of the former ship and the merchants were liable to pay the whole of the damage ; but if the collision occurred by accident or by negliglgence the loss was divided between the two vessels and their cargoes.2

Footnote 1: Vol. v 122-123.

Footnote 2: Laws of Oleron SS 15, Black Book of the Admiralty (R.S.); iog; Early Mayor's Court Rolls 223 and n. i, from which these rules seem to have been accepted in 1305.

In 1815, in the case of the _Woodrop Sinus,3_ the law as to the incidence of liability for collision at sea was summed up by Lord Stowell in four rules :--(1) If the collision was due to the fault of neither vessel--if it was, in other words, a pure accident--no legal liability is imposed on the owners of either vessel ; (2) if the collision was due to the fault of both vessels, the loss must be apportioned equally.4 between the vessels ; (3) if the collision is due to the fault of the ship injured no legal liability arises ; (4) if the collision is due to the fault of the ship which has injured the other, the injured ship can recover full damages. It was towards the end of this period that the development of the law was beginning which resulted in these rules. But it was only just beginning, as all through the sixteenth century collision cases were very rare.5 At this period we can only indicate some of the remote causes which shaped the law as we know it to-day.

Footnote 3: (1815) 2 Dod. at p. 85--4 there are four possibilities under which an accident of this sort may occur. In the first place, it may happen without blame being imputable to either party, as when the loss is ocasioned by a storm or any other _vis major:_ in that case the misfortune must be borne by the party on whom it happens to light; the other not being responsible to him in any degree. Secondly, a misfortune of this kind may arise when both parties are to blame; when there has been a want of due diligence or of skill on both sides ; in such a case the rule of law is, that the loss must be apportioned between them, as having been occasioned by the fault of both of them. Thirdly, it may happen by the misconduct of the suffering party ; and then the rule is, that the suffrer must bear his own burden. Lastly, it may have been the fault of the ship which ran the other down ; and in this case the injured party would be entitled to an entire compensation from the other."

Footnote 4: Hay v. Le Neve (1824) z Shav Sc. App. 395; cp. Stoomvaart Maatschappy Nederland v. the P. and O. Steam Navigation Company (1882) 7 A.C. at pp. 818-819_per\_ Lord Blackburn; this rule lasted till 1997; The Maritime Conventions Act of that year (1, z George V. c. 57 SS 1, i) provides that where both vessels are in fault the liability shall be "in proportion to the degree in which each vessel was in fault "; it is only if it is impossible to establish different degrees of fault that the liability is apportioned equally, SS 1, r 1.a.

Footnote 5: Select Pleas of the Admiralty (S.S.) ii lxxiii. 6 Vol. v 122.

Footnote 7: Vol. v 122.

## 6 The Contract of Carriage 267

to reconsider and to supplement the rules contained in the laws of Oleron. But the rarity of cases in the sixteenth century prevented very much development. All the cases decided seem to be cases in which either the defendant or the plaintiff is clearly in fault.1 There could therefore be either a clear condemnation or a clear acquitttal. There is only one case in which a negligent master was made liable to pay half damages;2 and there were no cases in which neither or both the ships were to blame. Welwod's treatment of the subject illustrates the scantiness of the law.3 He lays it down that, if a collision occur through the fault of neither party, both must contribute to the loss.4 This view of the law seems to have been acted on at least once in the seventeenth century;5 and it passed into the maritime law of some foreign states.6 But Welwod goes on to say that this rule will not apply if one of the ships perish, assigning the reason given by the laws of Oleron.7 On the other hand, he points out that a negligent master may be answerable to the owner of his own or of the other ship by the actio legis Aquiliae. The liability which he contemplates seems to have been the liability of the master. This is in accordance with the view that the owner is not liable for the master's negligence;8 and may perhaps partially account for the paucity of cases on the subject. In many cases the master would not be worth powder and shot.

Footnote 1: The plaintiff recovers in the following cases:--(t538) Spysall c. Walters, Select Pleas of the Admiralty (S.S.) i 70-71; (t539) Gyllet c. Style, ibid S3; (t544) Cocke c. Camp, ibid i33-t35; (t5;6) Lorde c. Butter ibid i43-t45; (t547) Darcy c. Legg, ibid ii 6, 7; the defendant got judgment in the case of Daniell c. Nokes (t587) ibid ii 167-t68, on the ground that the collision was due to the plaintiff's fault.

Footnote 3: Op. cit. Tit, xx.

Footnote 4: "If two ships rush and cross one over another, and the company swear their innocence, as that it lay not in their power to stay the same, contribution must be made for one equal upset of both their losses "; it should be noted that Tit. xx, in which he deals with collision, is entitled " Of contribution for lightening and disburdening of ships for their easier try to the port, and for other chances "; cp. Godolphin, Admiralty Jurisdiction, Introd.

Footnote 5: Select Pleas of the Admiralty (S.S.) ii lxxxiv--a case of t647.

Footnote 6: Abbott, op. cit. 342--as he says, in England in such a case, the owners of ship and cargo bear their own loss; such a misfortune was a peril of the sea; and in this English law agrees with the classical Roman Law, Dig. 9. 2. 29. 3. 7 Vol. v 122 n. ro,

Footnote 8: Above 252, 9: Select Pleas of the Admiralty (S.S.) ii lxxxiii,

Footnote 10: Above 252 nn. 6 and 7.

Footnote 11: The plaintiff recovers in the following cases:--(t538) Spysall c. Walters, Select Pleas of the Admiralty (S.S.) i 70-71; (t539) Gyllet c. Style, ibid S3; (t544) Cocke c. Camp, ibid i33-t35; (t5;6) Lorde c. Butter ibid i43-t45; (t547) Darcy c. Legg, ibid ii 6, 7; the defendant got judgment in the case of Daniell c. Nokes (t587) ibid ii i67-t68, on the ground that the collision was due to the plaintiff's fault.

Footnote 12: The plaintiff recovers in the following cases:--(t538) Spysall c. Walters, Select Pleas of the Admiralty (S.S.) i 70-71; (t539) Gyllet c. Style, ibid S3; (t544) Cocke c. Camp, ibid i33-t35; (t5;6) Lorde c. Butter ibid i43-t45; (t547) Darcy c. Legg, ibid ii 6, 7; the defendant got judgment in the case of Daniell c. Nokes (t587) ibid ii i67-t68, on the ground that the collision was due to the plaintiff's fault.

Footnote 13: The plaintiff recovers in the following cases:--(t538) Spysall c. Walters, Select Pleas of the Admiralty (S.S.) i 70-71; (t539) Gyllet c. Style, ibid S3; (t544) Cocke c. Camp, ibid i33-t35; (t5;6) Lorde c. Butter ibid i43-t45; (t547) Darcy c. Legg, ibid ii 6, 7; the defendant got judgment in the case of Daniell c. Nokes (t587) ibid ii i67-t68, on the ground that the collision was due to the plaintiff's fault.

Footnote 14: If two ships rush and cross one over another, and the company swear their innocence, as that it lay not in their power to stay the same, contribution must be made for one equal upset of both their losses "; it should be noted that Tit. xx, in which he deals with collision, is entitled " Of contribution for lightThe law Merchant'

Admiralty. If the injured vessel or the injuring vessel was alone to blame the law was plain enough. But what was to happen if neither was to blame, or if both were to blame, or if the cause of the collision was not clearly ascertainable? In all these cases the court seems to have gone or the principle of dividing the loss between the two ships \[1\]; and Mr. Marsden points out that at this period the Dutch lawyers were also beginning to follow a similar rule \[2\]. The final settlement of the sphere of this rule--this judicium rusctium as it has sometimes been derisively called--belongs to the eighteenth and early nineteenth century.

We have seen that the Admiralty lawyers, being civilians, naturally grounded liability upon dolus or culpa ; and the logical consequence of this conception is the modern application of the rule of the division of loss to the case where both ships are at fault. When the common law came to found civil liability upon negligence or wrongful intent \[3\], the principles which it applied to the cases of collision which fell within its jurisdiction \[4\], did not materially differ from the principles applied by the court of Admiralty as laid down in the _Woodrop Sinus_\[5\]. The one great difference was between the common law rule of contributory negligence, and the Admiralty rule as to division of loss \[6\]. And, whatever may be the comparative merits of these two opposing rules from the point of view of practical utility \[7\], it can hardly be denied that, if liability for wrong is to be founded upon dolus or culpa, the Admiralty rule is the more logical of the two \[8\]. The The Contract of Carriage 269 common law rule is, as we have seen,1 the logical result of the medieval principle of founding civil liability, not upon negligence, but upon an act which causes damage--if the act which was the immediate cause of the damage was that of the plaintiff he cannot recover. The common law rule dates from a period before the idea of negligence, as one of the foundations of civil liability, had been acclimatized in the common law; and though it may have its merits as a rule of practical utility, neither its name nor its contents altogether harmonize with modern foundations upon which civil liability is now usually based.

Footnote 1: Vol. iii 378-379, 382 ; below 459-462.

Footnote 2: Vol. v 85.

Footnote 3: Select Pleas of the Admiralty (S.S.); ii xxii-xxxix,

Footnote 4: 3 Edward I. c. 14; ; 4 Edward I. c. 14.

Footnote 5: On the whole subject of the early law o: wreck see Select Pleas of the Admiralty (S.S.) ii xxxx-xii; vol. i 56-561.

Footnote 8: 27 Edward III. st, 2 c. 13--goods which cannot be called wreck are to be restored to their owners, who are to pay those who have salved them the amount assessed by heris of other local officials with the advice and consent of four or six "4 dex meillours et plus suffisautres prodehorses du pays."

Footnote 7: In 1333 half was alleged to be due by custom, Select Pleas of the Admiralty (S.S.) i. xxii; in a writ to the justices in 1377 to try a case of wreck, there is a direction that a proper reward be paid to the salvors; ibid i xiv; in Henry VIII.'s reign half was awarded to the salvors of a ship, ibid i xiv; in Maye c. Hawkyns (r573) ibid ii 149 there is a decree for PS938 out of a total "value of PS150.

_Salvage._

That those who rescued persons or property from the perils of the sea should be rewarded, is a principle recognized from the earliest times.4 But right down to this period the rules of law on this subject are scanty, and, to a large extent, turn upon the character of the cases in which the claims arose.3 In the case of goods wrecked or derelict, early statutes provided that, if man or beast escaped, the owner should have them, if he claimed within a year and a day.4 Such goods, if unclaimed, belonged to the crown, and later to the Admiral, as Admiralty droits, unless the privilege of taking them had been granted as a franchise to an individual or a corporation.5 But those who had salved them were entitled to a reward,6 the amount of which seems to have been quite uncertain, though it was usually considered that the salvor should have half.7 In the case of goods recaptured frcm the enemy the amount to be awarded was in the discretion of the court.8 In the case of a ship in distress, which was not technically a wreck, the reward of the salvors seems to have been treated sometimes as depending upon the bargain made,9 sometimes as a matter to be determined by the court.10 The law was therefore in a confused state. It is clear

### The law merchant

that the amount which could be fairly claimed must to a large extent depend upon the circumstances of the particular case. Therefore, in the course of the seventeenth century, the practice grew up of allowing the court in all cases to assess the amount due, upon proper proceedings being instituted for this purpose. The first case in which this occurred was in 1633.1 It was a case in which proceedings had been taken to have a ship condemned as a wreck. "The owners and salvors intervened 'pro ecorum interesse,' and the salvors claimed a moiety of the property, 'or a verie good and sufficient reward,' as due to them by custom. This was the common form of a salvage action throughout the seventeenth and eighteenth centuries." If the salvage service were performed on land the common law courts prevented the court of Admiralty from assuming jurisdiction. Eut they applied a similar rule. The salvor could retain possession of the goods until a proper compensation was made; and, if the parties could not agree to the amount, a jury could assess it on proper proceedings being taken.2

Footnote 1: Select Pleas of the Admiralty (S.S.) it xxvi-xxxvii.

Footnote 2: Abbott, op. cit. 383-384.

_The Maritime Lien._

At the present day many of the incidents of the contract of carriage by sea result in the creation of a maritime lien. The maritime lien has been defined as " a privileged claim upon a thing in respect of service done to it or injury caused by it, to be carried into effect by legal process."3 Thus it is "a right acquired by one over a thing belonging to another--a jus in re aliena. It is, so to speak, a subtraction from the absolute property of the owner in the thing. This right must, therefore, in some way have been derived from the owner, either directly, or through the acts of persons deriving their authority from the owner. The person who has acquired the right cannot be deprived of it by alienation of the thing by the owner. It does not follow that a right to a personal claim against the owner of the res always coexists with a right against :he res, The right against the res may be conferred on such terms, or in such circumstances, that a person acquiring that right obtains the security of the res alone, and no rights against the owner thereof personally. A simple illustration of this is the case of bottomy."4 The chief cases in which a maritime lien arises at the present day are the cases of bottomy, salvage, wages, masters' wages disbursements and liabilities,5 and damage. Thus it appears that at the present day

## 2 The Contract of Carriage 271

a maritime lien can arise either ex contractu or quasi ex contractu or ex delicto.

These maritime liens differ wholly from common law liens, because they are not dependent upon the continued possession by the lienor of the property subject to the lien;1 and they differ also in some respects from equitable liens.2 The question arises, How did they originate? On this question different theories have been advanced ; and probably different theories may be true in respect of the very different kinds of maritime lien recognized by modern law. It is clear, at any rate, that we must, in discussing this question, distinguish between the liens which arise from contract or quasi contract, and those which arise from delict.

Footnote 1: "A maritime lien does not include or require possession. The word is used in maritime law, not in the strict legal sense in which we understand it in courts of common law. in which case there could be no lien where there was no possession actual or constructive; but to express, as if y analogy, the nature of claims which neither presuppose nor require possession. This was well understood in the civil law, by which there might be a pledge with possession and a hypothetical without possession, and by which in certain cases the right travelled with the thing into whosever possession it came," The Bold Buceleigh (18jo-185t) 7 Moo. P.C. at p. 284; vol. vii 517-53.

Footnote 2: Ibid 513.

3 Gorell Barnes, J., in the Ripp City \[1897\] P. at p. 239, seems to favour this view.

4 Dig. 42, 5. 26--'' qui in navem extrudam vel instruendam creditit vel etiam emendam, privilegun habet ''; see also ibid 42. 5. 34; and 20, 4. 5. 8 Below 272. 7 Above n. 4, 262. 8 In the sixteenth century there appears to be very little evidence of a maritime lien for wages, see e.g. Tye c. Spryngham (156t) Select Pleas of the Admiralty (S.S.) ii 122-123--a personal action ; cp. ibid 131-132 in a suit of 1565, against a ship and the owner, it appears the ship was arrested because the maximes were unable otherwise to recover their wages from the owner ; in 1597, ibid it loxiv (no. 69), there is a decree against the ship for wages, necessaries, debts, and bottomy.

We must probably look to an application of the Roman law of hypothec for the origins of the contractual or quasi contractual liens.3 The civil law recognized that a person who repaired or fitted out a ship was a privileged creditor;4 and from this it is no long step to take to say that such a person had a tacit hypothec on the property fitted out or repaired. Probably also this development was helped forward by the ordinary form of Admiralty process, under which the ship was arrested. But of this I shall speak a little later.5 At any rate, in the sixteenth century, we find such a lien existing by express agreement in the case of bottomy,6 and by implication of law in the case of non-payment of money due for repairs,7 and perhaps in the case of non-payment of wages;8 and in the seventeenth century a similar lien was recognized in the case of salvage services.9

Footnote 3: In the sixteenth century there appears to be very little evidence of a maritime lien for wages, see e.g. Tye c. Spryngham (156t) Select Pleas of the Admiralty (S.S.) ii 122-123--a personal action ; cp. ibid 131-132 in a suit of 1565, against a ship and the owner, it appears the ship was arrested because the maximes were unable otherwise to recover their wages from the owner ; in 1597, ibid it loxiv (no. 69), there is a decree against the ship for wages, necessaries, debts, and bottomy.

Footnote 4: Ibid 513.

Footnote 5: Ibid 513.

Footnote 6: Ibid 513.

It is not probable that the lien which arises from damage (such as collision) arose from an adaptation of the principle of hypothec. In some continental laws, it is true, it may have had this origin.10

### The law merchant

But we do not find this development in English law. Two very different views have been put forward on this matter. Mr. Justice Holmes regards it as a surviving form of noxal liability, which must be attributed to the sane set of legal ideas as those in which the deadmand originated.1 But there are several objections to this view. In the first place, very slight traces of the existence of such a lien appear in the early records 2--in fact its existence was not finally established till 1850-1851.3 But if we are to seek its origin in these primitive notions as to noxal liability, it is precisely in the early records that we should expect to find it prominent. In the second place, it is not very likely that primitive ideas of this kind would be found in a court, the law and practice of which were moulded on the civil law. In the third place, it was an idea which ran counter to the oder opinion that the owner was not liable for the torts of the master and crew.4 Even as late as 1802 it was argued that the "'torts of the master cannot be supposed to hypothecate the ship, nor to produce any lien on it."5 On these grounds the rival view put forward by Mr. Marsden seems to be preferable. His view is that this lien arose from an inference drawn from the Admiralty process of arresting the ship in order to compel payment.6 But it may be said, if this is so, we might expect this lien to have arisen very much earlier than it actually appears. The answer to this objection appears to be as follows :-- In the seventeenth and eighteenth centuries the common law courts prevented the court of Admiralty from excercising jurisdiction over individuals personally ; but they did not prevent the court from exercising its jurisdiction over a thing hypothecated or subject to a lien.7 In this period the court claimed to exercise both these kinds of jurisdiction. As often as not the arrest of the res was mere process to compel appearance--alternative to an arrest of the person.8 But when the court was prohibited from exercising this personal jurisdiction, the actio in

**INSUANCE**

rem, founded on the arrest of a res, came into greater prominence.1 By an inversion of cause and effect not uncommon in legal history, it came to be thought that, whenever a res could be arrested in order that a claim might be asserted against its owner, a lien over that res existed. This seems to have been the line of reasoning used by the court in the case of _The Bold Bucdengh_, which finally established the existence of :his lien.2

Footnote 1: The Dictator \[1892\] P. at p. 313 _fer_ Jeune, J.

Footnote 2: \*\*: A maritime lien is the foundation of the proceeding in rem ... and whilst it must be admitted that where such a lien exiss, a proceeding in rem may be had, it will be found to be equally true that in all cases where a proceeding in rem is the proper course, then a maritime lien exists," 7 Moo., P.C., at p. 234; as Gorell Barnes, J., points out in The Veritas \[1901\] P. at p. 310 this reasoning is not strictly true, as there may be rights to proceed in rem though no maritime lien exists.

At this period, therefore, the modern law as to maritime liens is still very remote. We see one root of it in the liens which arise by contract express or implied. But the other root--the prominence given to the Admiralty jurisdiction in rem by the prohibition of its personal jurisdiction, and the inference drawn from that prominence--are as yet in the future.

## III Insurance

In modern law insurance would not form merely a section of a chapter on the Law Merchant. The contract to which we look to save us harmless not only from :he risks incident to life itself, but also from the risks incident to the various business and social activities of life in a civilized society, and to the obligations which a paternal government places upon the most deserving of its subjects, would certainly demand and deserve a chapter to itself. On the other hand, if we look at insurance only from the point of view of its origins, we should not give it even a section to itself, but should class it simply as one of the topics of maritime law. I shall adopt neither of these methods. Remembering the important place which this contract was beginning to fill even in this period, I shall treat it as a separate topic; and, remembering that we must look for its origins, and for the earliest and most important sphere of its application to maritime law, I shall treat it as a topic which belongs peculiarly to the Law Merchant. In this section I shall deal, firstly, with the origins of the contract of marine insurance; secondly, with the beginnings of the development of this form of insurance in English Law; and, thirdly, with the origins of other forms of insurance.

The Origin of the Contract of Marine Insurance Insurance

Insurance has been defined \[1\] as a contract by which one party (the insurer) in consideration of a premium, undertakes to indemplify another (the insured) against loss. The researches of M. Bensa \[2\] have proved that the earliest variety of this contract was the contract of marine insurance ; that as a separate and independent contract it dates from the early years of the fourteenth century ; and that it was evolved, like many other of our modern mercantile institutions, in the commercial cities of Italy.\[3\] As M. Lefort has said, this contract was not devised by a legislator. It was the last term in the evolution of various legal devices invented to provide against the risks of the sea ;\[4\] and though there is no evidence of the existence of an independent contract of insurance before the beginning of the fourteenth century, we can see in these various devices the germs from which this contract was evolved. And, even when in practice it had come to be recognized as a distinct species of contract, it still continued to be disguised under the forms of a sale, an exchange, or a maritime loan, in order to prevent any question whether it was illegal on the ground that it infringed the laws against usury.\[5\]

Among both the Greeks and the Romans we meet with stipulations, accessory to the contract of carriage, which settled the incidence of the risk of loss of, or damage to, the goods carried.\[6\] For instance, either the carrier \[7\] or the consignee \[8\] might guarantee

## 6 Contract of Marine Insurance 275

the safe arrival of the goods carried. The maritime loan--_fecunia trajectititi_--can be analysed into a contract of _mutatum_ with a contract of insurance added to it1; for the higher interest paid by the borrower represented a premium, in consideration of which he was not liable to pay if the ship were lost. Then again we meet, in the earlier medieval period, mutual associations formed to guard against certain risks of the sea, as for instance against the risks which arose from the issue of letters of marque, or from the practice of reprisids;2 and at Genoa there was established an institution--the Officium Robarie--to give redress against Genoese citizens who had committed acts of piracy against any trader, which really gave a sort of state insurance against this particular risk.3

Footnote 1: Above 26i; Lefort, op, cit. vii; cp, Ashburner, op, cit. cexvi, cexvi; Dig, 22, z. I. thus defines _fecunia trajectititi_--1'trajectititi ea pecunia est quae trans mare vehitur. . Sed videndum an mereces ex ea pecunia comparate in ea causa habentur? et interest, utrum etiam ipsez periculo creditors navigent: tunc enim trajectitia pecunia fit."

More immediately connected with the development of the contract of insurance were the stipulations as to risk, introduced into the ordinary commercial contracts of the thirteenth century. Indeed, M. Valery thinks that, in the thirteenth century, some of these contracts, e.g. contracts of sale or loan, were never intended to be sales or loans, but insurances.4 Thus in the contract of "_commenda_," under which A advances money or other property to B to trade with, there is usually a stipulation as to the party on whom the risk of accidental loss is to fall.5 In the contract of _mutatum_ it is probable that, though it evaded the canonical prohibition of usury by calling itself _mutatum "gratis et amore_,"6 the lender often paid over the money advanced with a deduction, in consideration that nothing should be payable if the money were lost by accident; and such a deduction is, as M. Bensa has said, a true premium of insurance.7 Similarly, contracts of sale or exchange (_cambium_) were used to disguise transactions intended to operate as loans at sufficient interest to compensate the lender,

### The law merchant

both for the use of his money, and for the provision that nothing was to be payable if the money were accidentally lost.1 The form of a contract of sale was adapted to this purpose as follows : " Instead of B buying goods with money lent by A, A buys the goods himself and sells them to B, and the price which B agrees to pay will be (_a_) payable at a future date ; (_b_) contingent upon the safe arrival at the place of payment, either of the original goods or the goods into which they have been converted ; and (_c_) sufficient to meet the sum paid by A with maritime interest. Similarly in the case of exchange, B received coins from A on the terms of paying different coins (which would be of a different value) at another time or place , and according as the coins were at the risk of the borrower or lender, the value of the coins to be returned would differ.2 The difference between the rates of exchange, according as the money was repayable in any event, or only on the prosperous termination of the voyage, represents again a premium of insurance.3 As M. Bensa has said,4 it is only necessary to split up such arrangements into their component parts in order to arrive at the idea of an independent contract of insurance. " It would only be necessary for a third person to intervene between a purchaser who intended to purchase goods arrived safely, and a vendor who wished to throw on the purchaser the risks of the sea, and to offer to take these risks for the sum which the course of trade and the rate of exchange had fixed as the difference in the price, according as one or other party took these risks."5

Footnote 1: Bensa, op. cit. 3 n, 2, tells us that in the notarial acts at Genoa we find the expressions, _nomine accomoudationis, nomine veditionis et puri cambili, mutuo gratis et anore_, used quite indifferently.

Footnote 2: Ashburner, op. cit. cccxxv ; Bensa, op. cit. 9.

Footnote 3: Ibid g, tells us that there are, " inombrables exemples de contrats de change accompanying es de l'une des deux claus; !endu sauf a terre," ou ' aux risques de mer,' Dans la _Pratica della Mercatura_ de Pegolotti p. zoo, on voit que, selon qu'une lettre de change tiree de Florence sur l'Angleterre reffernant l'une ou l'autre de ces clauses, le banquier perceait une commission de ro sous, ou bien seulement de 20 petit sous par too mares. La difference de ses deux taux montre que, dans le premier cas, on payait une veritable prime d'assurance."

Footnote 4: Bensa, op. cit. 10.

In i 347 we have in the archives of Genoa what is perhaps the oldest contract of insurance ; and the archives of Florence show that, in the first twenty years of the fourteenth century, it was an ordinary commercial transaction in the commercial towns of Italy.6 But, as we have seen, the contracts in which the market value of the element of risk had been thus worked out were chiefly contracts of maritime loan, and all were concerned with the risks incurred in transport--generally by sea.7 It is not surprising,

## 6 Contract of Marine Insurance 277

therefore, to find that when the contract of insurance first appears as an independent contract, it is modelled on the maritime loan, which developed into the contract of bottomry.1 No very large modification was needed. In the maritime loan the debtor, who has borrowed the money, declares that he has received the sum advanced, and promises to restore an equivalent sum on the safe arrival of the ship or goods : in the insurance the insurer plays the part of the debtor, states that he has received the amount for which the ship or goods are insured, and promises to repay it in the event of the ship or goods no: arriving safely.2 It was only natural that the earliest insurers should be shipowners--they could charge a smaller premium because they could more easily guarantee a safe arrival;3 and it was inevitable that those who drew up the earliest contracts of insurance should be the same persons as those who were in the habit of drawing up contracts of loan on bottomry.4 Hence it was from the later contract that some of the most important of the technical terms applicable to insurance at the present day (such, for instance, as "policy" and " premium") were originally taken.5

Footnote 1: Ibid 28; for this contract see above 261-263.

Footnote 2: "II by avati, toutefois, une difference : tandis que dans la pret a la grosse le debiteur, c'est a dire l'emputref, declarati avoir recu la somme qui lui etail vraiement avancee et s'engageauit a restuiter une somme equivalente en cas d'arrivee a bon port; dans l'assurance, au contraire, le debiteur, c'est a dire l'assureur, feignait d'avoir recu la somme assuree, s'engageant a la payer a l'assure dans le delai convenu, sauf dans le cas d'arrivee a bon port du navire ou des marchandises,' Bensa, op. cit. 28.

Footnote 3: Ibid 24.

Footnote 4: Ibid xi, xii ; cp. ibid xii n, 2 citing Straccha, De Assecuratoire Gl. xv 2 who says, " trajectitia pecunia instar cujus assecurita inventa est."

Footnote 5: Bensa, op. cit. 28--at Genoa, "a partir er368, dans tous les actes genois d'assurance, l'assure's obligice a payer la somme assuree nomine veditionis et puri cambi."

Footnote 6: Two passages from the Consilia of the Genoes lawyer Bosco, cited Bensa, op. cit. 29, 30, make this quite clear--'Si contingentre svel merces, super quibus facta est assecuratio, perdi, associator solvit pretium et valorem pro quo assecuravit, et recuperat merces que sunt suo periculo a se empte, si recuperari possunt "; and " Si contingent res illas super quibus est facta securitas capi, dicte res tanquam effecte assecuratorum pro parte qua assecuravent super ipsis, per oos vindicantur et recuper

### The law merchant

Principles of insurance law flowed from this conception. In the first place, the insured must be the owner, or at least have some interest in the property insured.1 A man cannot transfer to another what he does not own. Therefore from the first the contract was a true contract of indemity, and not a mere wager on the safe arrival of ship or merchandise.2 In the second place, if the ship or goods did not arrive safely, and the resolutive condition failed to operate, the insurers were entitled to so much of the property insured as could be recovered.3

Footnote 1: Bensa, op. c. t. 34.

Footnote 2: Bensa, op. cit. 21--citing as authority the books of Francesco del Bene and Company, of Florence.

Footnote 3: Ibid 48.

Footnote 4: Ibid 47; Bosco in no. 369 of his Consilia (there cited) says, " Marcus propter lucari fecit plures assecutaneous sicut faciunt plurimi mercatores de Janua quorum aliqui de nuldo alio vivunt quam de hujsmodi questu, qui quandoque est utilissimus, quandoque damnous, secundum discretones assecurantium et secundum cursum temporum ct fortunne blamimenta vel advesiones."

During the fourteenth century the business of insurance grew and flourished. In the first half of the fourteenth century Florentine and Genoese merchants treated the cost of insurance as a regular part of the cost of transport.4 Genoa seems to have been the centre of the insurance business. Societies of insurance brokers, employed solely in this business, were known there 5; and that their business flourished can be seen from the fact that, on a single day in 1393, a Genoese notary made more than eighty insurance contracts.6 The growing popularity of the contract naturally caused it to become still further separated from the contract of loan on bottomry, or the contract of sale. Shipowners, as such, ceased to act as insurers ; and the magnitude of the sums assured led to the practice of several persons joining in the contract, by writing their names under the policy, with the proportion of the sum assured for which they were prepared to answer.7 Moreover, the form of the contract tended to grow less elaborate. Its legality being now fully recognized, it ceased to be disguised under the form of a loan or a sale. It came to be regarded as a distinct species of the large genus inominate contract, reducible to the formula "_do ut facias_--I the insured give a premium that you the insurer may undertake a risk."8

Footnote 4: Straccha, De Assecutaneous, Introd. 47--"Et illud quetitur, rem tuam mari vel terra exportandam salvam fore promisi periculum suscipiens, et periculi gratia pretium, an nominatus seu magis innominatus contractus censeautr ? Et innominatum conste enset Bialvinius . suscipio enn periculum ut des . . et sic facio ut des "; equally also, if looked at frosa, the point of view of the insurer, it is a contract of "I'acio ut des," for these inominate contracts, " judiciamur diversi modo, ex parte dantis est do ut facias, ex parte vero facientis est facio ut des, non inspecto ordine contralendi, sicut in emptione et venditone, location, ct similibus."

## 2 Contract of Marine Insurance 279

In early days there was no rule as to the form in which the contract must be drawn up. There is reason indeed to think that, in the earlier part of the fourteenth century, contracts of insurance were sometimes made verbally.1 But the procedural advantages obtained by getting the contract drawn up in writing by a notary or a sworn broker, led the parties in almost all cases to adopt this method of contracting.2 In the first instance these contracts were sometimes very informally drawn. Mere notes of the necessary clauses to be inserted in the agreement were taken.3 Probably the instrument was embodied in complete form only if it was necessary to take legal proceedings upon it.4 But it is clear that the practice of employing sworn brokers will lead to the evolution of a stereotyped form. The form which the brokers of Genoa, Florence, and Pisa evolved in this century has in substance shaped the policies of our modern law.5 It was substantially the form on which Straccha 6 commented in the sixteenth century ; and it was the form which many governments in the same century, partly for fiscal reasons, and partly on account of the convenience of having one definite form which all traders understood, made obligatory for all insurance contracts.7

Footnote 1: Bensa, op. cit. 34--4' Les documents que nous possedons admettent, en effet, la possibilite de conclure le contrat _cum scriftura vel sine_."

Footnote 2: Ibid 30. 3 See the specimen dited ibid 31, 32. 4 Ibid 3r.

Footnote 5: \*\* Les polices florentines et pisanes etaient assez conformes, dans leur ensemble, aux polices modernes. .

### The law merchant

inured had any interest.1 But the prevalence of these clauses soon gave rise to the serious evil of facilitating, by means of insurance, mere wagering contracts on the safety of ships or other property insured.2 The merchandise assured was, in the earlier contracts, described with some minuteness, which gave place, in later contracts, to a more general description.3 The ship on which the merchandise was loaded, was described ; and the names of the captain, the consignor, and owner were inserted.4 It was very rarely that the ship was not designated, and the insured allowed to load in any ship he pleased.5 At first the insurance was always for the voyage. Time policies (which never exceeded a year) were, however, introduced in the course of the fourteenth century.6 From the earliest time the route was prescribed ; and any deviation, unless allowed by the policy, avoided the contract.7 The risks against which the insurance was made were generally carefully specified ; but generally they excluded risks arising from the barratty of the master ; and sometimes certain other risks also.8 Sometimes the policy specified a time within which, in default of news, the ship was to be presumed to be lost.9 In case of capture and rescue it was a disputed point as to whether the insurers were liable to pay.10 The better opinion seems to have been that they were liable ; and policies sometimes provided that they should not be liable, if they redeemed the goods and delivered them safely at their destination.11 The one duty of the insured was to pay the premium ; and this payment must always be made in advance.12 Sometimes provision was made for the

## 6 Contract of Marine Insurance 281

cancellation of the policy and the return of the premium, if e.g., owing to the abandonment of the voyage, the risk was never incurred.1

Footnote 1: Bensa, op. cit. 46-47.

(2) The earliest legislation2 on the subject of insurances comes from Genoa and Florence. The earliest enactment is a Genoese statute, which comes from the last quarter of the fourteenth century.3 It was directed to the prohibition of insurances on foreign ships--a prohibition which was never very effectual, and was shortly afterwards repealed,4 and to laying down certain other conditions as to the validity of the contract. For instance, insurances made after the loss was known were declared to be void; and the loss was deemed to be khovii if any one person had heard the news.5 Other statutes were passed to impose a tax upon insurances,6 to settle the form of the contract,7 and to provide a short and effective procedure for the enforcement of claims upon insurance policies.8 Towards the end of the fifteenth century, the greater freedom allowed to the parties to make what terms they pleased, led to an increase in the practice of making insurance contracts solely for the purpose of wagering; and the legislature at Genoa made attempts to prohibit them, which were not very successful.9 But none of these statutes covered very much ground. It is to the statutes of Barcelona that we must look for the first comprehensive code of insurance law.10 These statutes, as finally codified in 1484, have had a large influence upon the insurance law of the rest o: Europe, partly because, being printed and circulated with the Consolato del Mare, they shared its fame and influence; 11 and partly because, being compiled at a later period than the earliest Italian legislation, the law was more settled, and therefore better fitted for codification,12 They were a model for the various codes of insurance law which the chief

### The law merchant

trading countries of Europe passed in the sixteenth and seventeenth centuries,1

Footnote 1: For the text of some of these later laws see Magens, op. cit. ii 23:30--Antwerp 1563; ibid 30-49--Spanish ordinances of 1556, r588, and r678,

This legislation is comprised in five statutes which were passed at Barcelona from 1435-1484. They deal with all aspects of insurance law, and settle the leading principles which underlie it. The statute of 14352 is the basis of the later law. Among other topics, it deals with the capacity of the parties,3 insurances on foreign ships,4 the proportion which the value of the property insured must bear to the amcunt of the insurance5 the rules as to presumption of loss,6 the regulation of insurance brokers,7 the payment of the premium,8 the form of the contract,9 the procedure to enforce it10 Some small modifications were made in the following year;11 and in 145813 considerable modifications were made in the direction of allowing greater freedom to insurers and insured.14 Additional rules were made as to the payment of the premium,14 as to proof of the loss,15 and as to the procedure to enforce the contract;16 and there were some new rules as to the cancellation of the policy when the risk was not incurred.17 In 1461185avisions of the rules as to insurances on foreign ships, by making use of the machinery of a sale or a loan, were prohibited. In 148419 all these rules were summed up in the comprehensive code which, as I have said, has had a very large influence on the development of the law throughout Europe.10 The chief change made was the abolition of all restrictions on the insurance of foreign ships.21 But this freedom obviously tended to encourage mere wagering policies. In order to discourage them, insurances on ships or cargoes sailing beyond the Straits of Gibraltar, were prohibited, unless they were destined for Barcelona;11 and rules were made to suppress the practice of insuring non-existent cargoes.28 Further provisions were made to invalidate contracts made after the loss

**CONTRACT OF MAIRINE INSURANCE 283**

had occurred,1 and as to the presumption of loss from the non-receipt of news.

Footnote 1: SS 17.

These statutes give us, as M. Bensa has pointed out, a very complete picture of the insurance law of the fifteenth century. They are, as I have said, especially important in the early history of this contract in England and in other European countries ; for it was the Italian and Spanish insurance law of this century which was already making its influence felt in the trading cities of the Netherlands. and was soon to make its appearance in England.2 To its adventures in England we must now turn.

Footnote 2: Genoese underwriters were established at Bruges in 137o, Bensa, op, cit., tor; "L'Espagne d'abord et pour peu de temps d'alleurs, puis la Flandre, l'Angleterre et la France, en recueillant les traditions et les coutumes de l'Italie, lui succederent dans la mission de les developer conformement aux transformations amenees par la marche du temps, et aux formes nouvelles 4u commerce terrestre et maritime," ibid 105.

Footnote 3: Select Pleas of the Admiralty (S,S) ii kavli,

Footnote 4: Ibid 47; possibly the case of Emerson c. De Sallanova (1545), ibid lxvi, which turned upon a claim on an indemity given against the withdrawal of a safe conduct by the king of France, may be an earlier case of insurance; cp. 'Vance, Essays A.A.L.H. iii Ito.

_The Introduction and Development of the Contract of Marine Insurance in England_

As we might expect, the earlies: mention of a policy of insurance in England is to be found among the records of the court of Admiralty. Insurance, as was pointed out in a sixteenth-century petition to the Council, " is not grounded upon the laws of the realme, but \[is\] rather a civil and maritime cause, to be determined and discided by civilians, or els in the highe courte of the Admiraltye."3 This earliest policy is to be found in the record of the case of \_Broke c. Maynard_4 (1547), in which an action was brought by the insured on a policy written in Italian, and subscribed by two underwriters. The action was defended on the ground that the insurers had already paid part of the sum, and that they had received no part of goods which had been salved. It was further alleged that there had been a deviation. The case shows that at this date the practice of insurance was well known in England ; and that this was the fact was specifically stated in the case of \_Ridolpye c. Nunez_5 (1562), in which the custom in the city of London of making insurances through agents is thus set out in the pleadings : " The use and custome of maynge bylls of assuraince in the place commonly called Lumbard Strete of London, and likewise in the Burse of Antwerpe, is and type out

### The Law Merchant

of mynde hath byn emongst merchants using and frequentinge the sayde severall places, and assurances used and observed, that the partie, in whose name the bill of assurance is made, ys not bounde to specific in the same whether the goods assured are for his owne or for any other man's acompte. . . And yt any mysfortune chauncethe to the same gooddes in such sort assuryd, the sayde partie, in whose name the byll of assurauce is made, maybe demande and oughte to recover them againste the assurers by vertue of the sayd cusome as his owne propre gooddes, although they perteyne to some other, . . And further he doothe alledge that commonly merchants, by all the type above declared, have and don cause ther gooddes to be assured from porte to porte by their factors and other ther frends havinge noo interest or propretie in the gooddes assured, and yet thassurause goodd, and thassurers bounte tanswere the losse of such gooddes yf any happen."

The Italian origin of insurance law is clear on the face of the policies which we find in the records of the court of Admiralty.1 The earliest policy which appears there is, as we have seen, written in Italian;2 and in form they are very similar to the Italian policies of this period. A comparison between some of them, and the form of policy prescribed by the Florentine legislation of 1523,3 will make this quite clear. They are not of course precisely similar. They are not drawn up in one stereotyped form, and they therefore vary both in length and in contents. Some are quite short, while others contain larger and more elaborate clauses. Two policies contain a "sue and labour" clause;4 and a Dutch policy of 1638 contains a remunication of the Antwerp Insurance Orders, and an agreement to submit to arbitration in the case of any disagreement.5 But the clause which nearly all the English policies of this period contain--which in a modified form our modern policies of marine insurance still retain--to the effect that this policy shall be of as much force and effect as the surest writing or policy heretofore made in Lombard Street,6 probably had the result of producing a uniformity in the legal effect of all these

## 6 Contract of Marine Insurance 285

policies. It showed that the parties intended to incorporate into their contracts the rules of the law merchant generally understood to be applicable to them;1 and it therefore enabled the parties to appeal to, and the court to apply, these rules in any litigation which might arise.

Footnote 1: Thus the Council tell the Lord Mayor, whom they had directed to write down the rules and orders relating to insurance, to follow the customs of other countries as the fees payable.

The growth of England's foreign trade in the latter part of the sixteenth century increased the importance of insurance law; and, from 1574 onwards, the Council began to consider the expediency of putting this new business under some form of regulation, and of providing some means by which the rights of the parties under insurance contracts could be quickly and easily enforced. That the Council might be informed as to the actual rules observed, an order was sent ir. 1574 to the Lord Mayor of London to collect and certify the orders made and the rules applied by the merchants in matters of insurance.2 But nothing was done that year, although the order was repeated.3 In 1575 the Lord Mayor was further directed to fix the prices for making and registering policies of insurance.4 But apparently nothing was done, as later in the same year he was again directed to summon experienced merchants and civilians, and, with their help, to collect this information and reduce it to writing;5 and it was necessary to repeat the order in 1575.6

Footnote 2: Dasent viii 321.

Footnote 4: Ibid 337.

Footnote 5: Ibid 163--." Whereas letters have been often written to him and his predecessours to consider for some order to be made for matters of assurance, the wante whereed both dailie brede grete trolbles, he is now required to sende unto their Lordships without delaie that hath been done in that behalf, and also the perfect note of the rates that hath ben set downe for the registering of assuvances, and therein to use the more expedicion for that, upon the certificate knowledge thereof, their Lordships are to procede therein to the furtherance of he' Majesties service."

In the meantime the Council had resolved to act upon its own knowledge, and to adopt two measures, which may well have been suggested by the practice of other commercial nations. In the first place, they proposed to regulate the business of insurance by setting up an office for the making and registering of insurances. In the second place, they proposed to create a special commission, consisting of merchants and civilians, for the speedy trial of these cases, in order that the merchants might, " the better followe their trades without incomberaunc or mclestinge the one the other by suites at lawe, bothe to the hinderance of traffick and of her Majesty's customers."7The

## 6 Contract of Marine Insurance 287

that the rates found by the commissioners were accepted as fair by the government. On the other hand, the government insisted upon all insurances being registered at the Office, and perhaps upon the sole right of making them, conferred upon Candler or his deputies.1 As it was said in a marginal note on Candler's petition, it was on these provisions in the patent that the government relied for the redress of " deceipt in Assewraunces";2 and, though the notaries and brokers remained unsatisfied, there is no evidence that the merchants seriously objected.3 After all, similar regulations were in force in continental countries.

Footnote 1: The author was supported by the National Science Foundation of China under the grant No. 1The Law Merchant?

satisfactory on the Continent, this tribunal set up by the Council was not a success. In 16ci the merchants "that use to assure goodes," stated, in a petition to the Council, that the orders made by the merchants and confirmed by the Council were not obeyed ; and that some refused "to submytte and conforme them selves to the order of Commyssoners appointed to hear those causes, being chosen of skillfull merchantes and sworne by the order of the Lord Maior to deale indifferently and uprightlie, to the great trouble of honest traders and the incuradgement of soch merchantes as have no meanynge to performe their bergaines."1

Footnote 1: The author is grateful to the anonymous referee for his comments on the manuscript.

The reason for the failure of the insurance commissioners is probably to be found in the fact that both the court of Admiralty and the courts of common law continued to exercise a competing jurisdiction; and that both were eager to retain and to enlarge it. In 1547 the Admiralty proceeded against a plaintiff for contempt because he had sued in the city of London court;2 and in 1556 it proceeded against another plaintiff because he had sued before a commission appointed by the Chancellor.3 In the common law courts there is, it is true, only one reported case during this century of an action upon a policy of insurance.4 But the action of assumpsit, as developed in the latter part of this century, was quite capable of affording a remedy upon these policies; and Malynes 5 tells us that many such actions were brought. It is clear that these competing jurisdictions afforded many opportunities to the dishonest and the litigious. Such persons could put pressure on their opponents by a refusal to submit to the summary jurisdiction of the commissioners, which would compel them to have recourse to a formal trial before a law court.6 And, even if the case were brought before the commissioners, it would seem that they sometimes declined to obey their orders, perhaps under the plea that legal proceedings were pending in the Admiralty or at common law. The fact that the Council had not given, and indeed could not give, exclusive jurisdiction to these commissioners was fatal to their efficiency.

Footnote 1: The author is grateful to the anonymous referee for his comments on the manuscript.

Footnote 2: The author is grateful to the anonymous referee for his comments on the manuscript.

Footnote 3: The author is grateful to the anonymous referee for his comments on the manuscript.

Footnote 4: The author is grateful to the anonymous referee for his comments on the manuscript.

Footnote 5: The author is grateful to the anonymous referee for his comments on the manuscript.

Footnote 6: The author is grateful to the anonymous referee for his comments on the manuscript.

Footnote 7: The author is grateful to the anonymous referee for his comments on the manuscript.

## 6 Contract of Marine Insurance 289

In consequence of the petition of the merchants to the Council in IGOI,1 the chief justice of the King's Bench and the judge of the Admiralty were directed to hold an enquiry;2 and the result of this enquiry was a resolution to strengthen the jurisdiction of the commissioners, by giving it statutory authority. The statute of IGOI, which was passed with some difficulty through Parliament,3 evidently intended to set up for London a commercial court of the ordinary continental type, for the hearing of actions upon policies of marine insurance. The preamble sets out the antiquity, the prevalence, and the advantages of the custom of marine insurance, and recites the measures taken to decide the controversies arising by the arbitration of commissioners. The statute then enacts that the Lord Chancellor shall be empowered to appoint a standing commission to hear all cases arising upon all policies of insurance entered in the London Office of Insurances. This commission was to consist of the judge of the Admiralty, the recorder of London, two doctors of the civil law, two common lawyers, and eight "grave and discrete merchants." These commissioners, or any five of them, were to adjudicate upon insurance cases "in a briefe and summarize course, as to their discretion shall seeme meete withoute formalities of pleadinges or proceedings."4 They were given power to examine on oath, or to commit to prison those who disobeyed their final decrees.5 An appeal from their decision could be brought to the court of Chancery; but execution was not to be suspended pending an appeal.6 The commissioners were :o be sworn to act honestly, and no commissioner interested in any case could take any part in the decision of that case.7

Footnote 1: Above 288.

Footnote 2: Dasent xxxi 252, 253.

Footnote 3: Malynes, op. cit. r06.

Footnote 4: SS 3.--the sentence must be satisfied or the money deposited with the Commissioners.

Footnote 7: SS 4.

Thus a commercial tribunal of the continental type 8 was for the first time established in England by statutory authority. But it suffered from two grave defects. Firstly, its jurisdiction was confined to policies registered in the London Office of Insurances, so that it did not extend to insurances made in other seaport towns. Secondly, it did not exclude specifically the jurisdiction of the courts of common law and the court of Admiralty. It is possible that, if the king and Council had continued to exercise the control over the courts which they exercised in the Tudor period, these defects might have been remedied. But the constitutional controversies of the seventeenth century were fatal to institutions which depended upon the prerogative. The Office of

### 290 The Law Merchant

Insurances seems to have disappeared ; and the new court was left to wage an unequal contest with the victorious common law. There was indeed an attempt in 1662 to remedy certain minor defects in the Act.1 For instance, the necessary quorum was reduced from five to three ;1 and power was given to punish parties or witnesses who refused to appear,3 to make orders against the person or goods of a defendant,4 and to issue commissioners to examine witnesses beyond the sea.5 But these amendments were wholly ineffectual in the face of the determined opposition of the common lawyers. They held that a judgment of the court was no bar to subsequent proceedings at law ;6 that it could hear disputes only as to policies of marine insurance;7 and that, even in these cases, it could act only when it was the insured who was plaintiff.8

Footnote 1: 13, 14 Charles II. c. 23. 2 SS 2. I. 5 SS 2, 2, 4 SS 8 SS 3, 2, 5 SS 1. 5 SS 3- 1. 5 SS 7 Denoyr V. Oyle (1649) Style v165-167--There was however a doubt whether the court might not have jurisdiction on a life policy if the assured was going to sea " on merchants affairs."

Footnote 8: Delbye v. Proudfoot (1693) I show. 396. 9 Select Pleas of the Admiralty (S.S.) ii 149 (1573), Lopez, an insurer, gets recaptured goods, paying salvage.

Footnote 10: Cavalchannel c. Mayward (154) ibid ii 45--in a defence to an action on a policy it is stated that, "if any of the goods so assured shulde within the type of assurance ... fall to any wrack ... and yet sume parts of the same happen to be savyd that parte ... which shulde be savved ... ougtte to be devoted equally before unshearsars ... according to every assurers proportion ... before any assurance can be demanded of them ; Broke c. Mayward (1547) ibid ii 47; cp. ibid ii lxx (1573) action for freight on wine brought to London by insurers after the ship had been wrecked.

Footnote 11: Ibid ii 56--a French policy of r565; SS8--a Dutch policy of r5638; in the former policy the clause runs, "And we give to him ... ample power to helpe and give order for to save them said shippes and marchandises or part of the same to sell and distribute them yf ned be aswell to our proufytte as dommage withdrew asking us leave or license. And we shall paye all charges averedge and expenses whiche shall beren at the sewe and saving of them said shippes and merchaundisses be yt that there be anything recovered or not."

The natural result was that, during the sixteenth and seventeenth centuries, the law of insurance was in a very backward state. Neither in the court of Admiralty in the earlier part of this period, nor in the courts of common law and equity in the latter part, were any very general or certain rules evolved. This fact is proved by some of the decisions of these tribunals.

In the court of Admiralty it is assumed in several cases that the contract of insurance is a contract of indemnity. It follows that the insurer who has paid is entitled to the goods salved, on paying salvage for them;9 and that, if goods salved were not made over to the insurers, they were not liable to pay the sum assured.10 It was in order to induce the insured to do their utmost to save the goods for the benefit of the insurers that the "sue and labour" clause was inserted in these policies.11 It is fairly clear

## 2 Contract of Marine Insurance 291

that deviation was a defence to an action on a policy ;1 and that no news of a ship for a year was presumptive evidence of its loss.2 We can see the influence of the continental rules in the assumption that a reassurance is invalid;3 but apparently an insurance upon the goods of alien enemies was at this period valid4--though, after some conflict of opinion, such insurances have been finally decided to be invalid.5 It is clear too that the benefit of a policy could be assigned.6

Footnote 1: Broke c. Maynard (1547) Select Pleas of the Admiralty (S.S.) ii 47.

Footnote 2: De Salizar c. Blackman (1555) ibid ii 49; cp. ibid lxviii (1562-1563)--a year and a day is the period stated; it was to obviate questions of this kind that the clause " lost or not lost " was inserted in insurances, Malynes, op. cit. 107.

Footnote 3: Ravens C. Hopton (1561) Select Pleas of the Admiralty (S.S.) ii 1zo.

Footnote 4: Ibid ii, xv, lxviii (1562-1563); lxx (1569-1570); cp. Park, Marine Insurance (ist ed.) 15, 16; and see above 281-283 for the earlier continental rules.

Footnote 5: Fundado v. Rogers (1602) 3 B. and P. rg1, overruling Lord Mansfield's view in Planche v. Fletcher (1779) 1 Doubl. 251.

Footnote 6: Duckett c. Barne (1570) Select Pleas of the Admiralty (S.S.) ii 43.

Footnote 7: Green v. Young (1702) 2 Salk: 444; this decision is really the converse to earlier cases which held that loss after a deviation enabled the holder of a bottomy bill to sue, Western v. Wildy (1684) Skin. rs2; cp Williams v. Steadman (r694) Holt, K.B 1z6.

Footnote 8: Green v. Young (1702) 2 Salk: 444.

Footnote 9: Pickering v. Barkley (1672) 2 Rolle Ab. 248--the merchants gave evidence that this was the view held by the court for assurance cases; s.c. reported by Style 132; cp. Barton v. Wolliford (1688) Comb. 56.

Footnote 10: (1659) 2 Vern. 176. 11 "non. (1655) Skin. 243.

Footnote 12: Above 280. 12 "non. (1642) March N.R. Ito.

Footnote 14: Anon. (1699) 1 Ld. Raym. 724.

Footnote 15: Assisevedo v. Cambridge (1712) 10 Mod. 77--a report of the arguments of the civilians; on this argument the court inclined in favour of the insurer, but the point was ordered to be argued by the common lawyers in the following term; cp. Park, op. cit. 87-82.

### 292 The Law Merchant

ship was " warranted to depert with convoy." It seems to have been settled that the stipulation was satisfied if she so departed, even though she was afterwards separated by tempest, and captured.\[1\] The question of the possibility of parol variations of a policy gave rise to two decisions.\[2\] It was settled both at law and in equity that if the risk was not run the premium could be demanded back.\[3\] The court of Chancery \[4\] differing from the courts of law,\[5\] held that if the insured had no interest the policy was void. Whether the fact of having advanced money on bottomry was a sufficient interest was not perfectly clear.

It is obvious that these few cases cover very little ground. It is also obvious that it was owing to the defects of the procedure of the common law courts and the court of Chancery that the cases were so few. At common law it was necessary to bring a separate action against each of the underwriters; and either the underwriters or the insured could compel their opponent to proceed to trial on all these actions.\[6\] If a case was reserved, counsel were left to draw it up at their leisure.\[7\] These cases were often argued in private, so that the decision could never be a guide to any future case.\[8\] In fact not much guidance could be expected from such of these cases as were heard in open court, since both judges and counsel were ignorant even of the meaning of the ordinary technical terms used by merchants and seamen;\[9\] and the judge consequently left the case to the jury without any explanation of the principles applicable.\[10\] It was apparently the custom always to hear two arguments;\[11\] and in these, as in other

## 6 Contract of marine Insurance 293

cases, it was always possible to delay the proceedings at law by filing a bill in equity.1 Nor was the court of equity any more satisfactory. Its delays were notorious.2 It was out of touch with commercial life and ways of thought. The somewhat over-fine standards of morality, which it was beginning to require, were hardly suited to the world of trade. A court, for instance, which could decide that it would not assist the holder of a bottomry bond because it carried unreasonable interest,3 which refused to accept the value set upon the goods in a valued policy,4 was obviously out of touch with the elementary principles of commercial and maritime law applicable to these transactions.

Footnote 1: Vol. i 465 and n. 4; Thus in Harman v. Vanhatton (r716) 2 Vern, 716, a plaintiff, having recovered on an insurance, brought an action on a bottomry bond, alleging that, though the ship was lost, there had been a deviation; a bill was then filed in equity to stay this action, which was dismissed.

Footnote 2: Vol. i 423-424, 426, 437-439.

Footnote 3: Dandy v. Turner (1701) 1 Eq. Cas. Abr. j72; cp. the remarks on this case made by Park, op. cit. 477, 478.

Footnote 4: Le Pypre v. Farr (1716) 2 Vern. 716.

Footnote 5: Op. cit. chaps. xxv, xxviii, xxviii.

If we compare the state of the law of insurance at the end of the seventeenth century with its state at the end of the sixteenth century, we can see that it has made no appreciable progress. At neither period had there been any 'egislation, comparable to that of continental states, directed against obvious abuses, such as the practice of cloaking mere wagers under policies of insurance. At neither period had much progress teen made in the work of converting those mercantile customs and that continental jurisprudence, which Malynes describes,5 into ascertained rules of English law. In one respect indeed there had been retrogression. The business of underwriting was subject to some sort of control in the sixteenth century; but in the seventeenth century, that control ceased with the disappearance of the Office of Assurances,6 It was not till the early part of the folowing century that the Legislature attempted to repress some of the abuses which were disfiguring the law; and it was not 'ill later in that century that Lord Mansfield evolved from mercantile custom and foreign precedents the principles of our modern law. Similarly we must look to the same period for the humble beginnings, at Lloyd's coffee house, of the voluntary association which has supplied, far more efficiently than any governmental institution, that measure of control over the business of underwriting which had been attempted by the Council in the sixteenth century.

The _Origins of Other Forms of Insurance_

I have dealt so far only with marine insurance. During the whole of this period it was by far the most important branch of insurance law. It was the only branch which the Council attempted to regulate; and it was the only branch which the Legislature noticed.

Analogous to insurances against the risks of transport by sea are insurances against the risks of transport by land. We have seen that this species of insurance was known abroad;1 and perhaps it was known in England2--though there is not much evidence as to this.3 Gradually, in addition to these insurances of property against the risks of transport, insurances against other dangers to property developed. But, during the sixteenth and seventeenth centuries, the only other danger to property which could be insured against was danger by fire; and as yet it was only houses that could be insured.4 As early as i 59i a system of fire insurance was in operation in Hamburg; and proposals to establish this kind of insurance in England had been made in i 635 and i 638.5 But it was not till after the Great Fire that it was actually established. In i 667 Barbon established an office which, in i 680, was transferred to a company.6 In 1682 the City of London started a rival undertaking.7 About the same time two partners established a mutual society, known as the Friendly Society; and in 1696 another mutual society, known as the Hand in Hand, was started.8

Footnote 1: Above 276 n. 7:

Footnote 2: Malynes, op. cit. i 707--" other assurances are made upon goods and merchandises sent by land from one place to another, by the conductors or carriers to Venice, Frankford, or any other places, wherein the goods commonly are declared, and the mark also : and this manner of assurance is especially performed by the conductors, who take for the charges a certain allowance for every pound weight that the goods do weigh, and moreover, 2, 3 or 4 upon the hundred pounds in value that the said goods are esteemed to be worth : and he didn appoint a sufficient guard of soldiers to convey the same by land and rivers to the places intended, which nevertheless by a stronger power have many times been taken by the freebooters."

Footnote 3: Scott, Joint Stock Companies iii 374 n. 2, cites the Merchant's Dayly Companion (i 684) 355, in which mention is made of insurances of goods " sent by wagon or cart etc. by land from all robbers or thieves."

Footnote 4: It was not till i 706 that Charles Povey founded an office to insure against losses of goods and merchandise by fire, Scott, Joint Stock Companies iii 374:

Footnote 5: Ibid iii 372.

Footnote 6: Ibid. 7' Ibid 373; Luttrell's Diary i 735.

Footnote 8: Scott, Joint Stock Companies iii 373; it is there pointed out that there was a difference between the Joint Stock and the Mutual Societies-- the former, through the security deposited in the names of 'waves,' were in a position to pay claims, even although the sums, received from premiums, had already been exhausted. A mutual society on the other hand was constituted on the basis of exacting less for premiums, and making up any deficit, when required, by a levy upon its members."

But, before fire insurance had developed, insurances against risks, not to property, but to the person, were known both on the

## Other forms of Insurance 295

continent and in England. Of the early history of this form of insurance I must say a few words.

In modern times the contract of insurance against risks to the person takes the form either of life or accident insurance; and both are very different in character from the insurances against risks to property. Life insurance is a contract of indemnity in so far as it enables the insured to make provision against death or the incapacities of old age. But it is also both in England1 and elsewhere2 a method of investment; and it is this aspect of the contract which is the most important, and causes it to differ essentially from insurances against risks to property. Insurance against risks to property are, as we have seen,3 simply contracts of indemnity. The result is that, if the loss occurring from the happening of the risk is otherwise made good, the insurer is not liable, because the loss has not been incurred. On the other hand, the contract of life insurance is not simply a contract of indemnity. It is an absolute promise to pay at the death of the insured a fixed sum of money, in consideration for the payment of certain premiums during life, the amount of which is calculated by reference to the probable duration of the life insured.4 The amount insured is payable whether or not any loss is incurred as a result of the death; and in this important respect the contract of accident insurance resembles the contract of life insurance.5

Footnote 1: Below n. 4.

Footnote 2: Bensa, op. cit. 89-""L'assurance sur la vie, telle qu'on la concoit aujourd'hui, n'est, a proprement parler, un veritable contrat d'indemnite. Au fond, cet acte de prevoyance revient a n'etre que l'accumulation des epargnes qu'il est loisible a tout particulier de faire selon sa condition de fortune, le role de la Compagnie qui assure se bornant a parantir a l'assure qu'une mort premature ne viendra pas empecher la formation du capital qui'a entrepris de constituur par ses eonomies."

Footnote 3: Above 278, 296.

Footnote 4: This is clearly explained by Page Wood, V.C., in Law v. London Indisputable Life Policy Co. (1855) I Kay and J. at p. 225; he said: " policies of insurance against fire or marine risk are contracts to recouple the loss which parties may sustain from particular causes. When such loss is made good _diunide_, the companies are not liable for a loss which has not occurred; but in a life policy there is no such provision. The policy never refers to the reason for effecting it. It is simply a contract that in consideration of a certain annual payment, the company will pay at a future time a fixed sum, calculated by them with reference to the value of the premiums which are to be paid, in order to purchase the postponed payments'; e.g. Dalby v. India and London Life Assurance Co. (1854) 15 C.B. at p. 387; "life assurance," said Parke, B., " is a mere contract to pay a certain sum of money on the death of a person, in consideration of due payment of a certain annuity for his life, the amount of the annuity being calculated in the first instance according to the probable duration of his life."

During this period we can see nothing resembling the modern contracts of life or accident insurance. The statistical knowledge, which has rendered those contracts possible in modern times, was wholly wanting;6 and even if it had been available, it is probableThe Law Merchant

that the dangers and uncertainties of life in a comparatively turbulent age would have made these contracts commercially impossible. But we do see in Italy in the Middle Ages, and in England during the sixteenth and seventeenth centuries, a few insurances against certain risks to the person, which we can regard as the germs from which our modern life and accident insurances have grown up.

M. Bensa has shown that in Italy in the Middle Ages there are instances of contracts of insurance against certain kinds of risks to the person.1 There are insurances against risks of pregnancy,2 against death by the plague,1 or against death generally for a certain limited period.4 It is interesting to note that in some of these policies, as in modern life policies, there are stipulations as to the parts of the world to which the insured may travel. But it is probable that these insurances were never very frequent--the definition of the contract of insurance given by Straccha in the sixteenth century does not cover them.5 And, when they began to develop, they were so often made a disguise for mere wagers, that they were prohibited in Italy, Spain, and the Netherlands.6 Consequently they never developed, as marine insurance developed, into an independent form of contract. The specimens which developed in Italy because the progress made in mathematical studies gave insurers some basis for the calculation of risks; but, as Bensa, op. cit. 47-8, says, as yet no proof of the truth of this conjecture has appeared. The fact that it was marine insurance that was principally developed, and the fact that the risks were pretty constant and well known, would seem to point o the fact that the risk was calculated by the practical insinct of the parties to the contract; as Bagehot says, Economic Studies 9, " men of business have a solid judgment--a wonderful guessing power of what is going to happen--each in his own trade."

Footnote 1: The author is grateful to the anonymous referee for the support of the National Science Foundation.

Footnote 2: Bensa, op. cit. 90-94 ; at Genoa a person accused of illicit connection with another's slave was presumed to be the father of the child, if the slave, and her master and minstress (being persons of good repre) sworse to their belief in his guilt, and there was any other corroborating fact; such a person was liable to a heavy fine, which was doubled if the slave died; it was this risk which was frequently the subject of insurance.

Footnote 3: Ibid 97.

Footnote 4: Ibid 95.

Footnote 5: De Assecuracting, Introd. 46--"Assecuratio est alienarum rerum, sive mari, sive terra exportadarum periuliscutico, retro constituito pretico,"

Footnote 6: Valery, Les Origines de L'Assurance sur la Vie 5; a good illustration of this legislation is to be found in SS 8xxixi of an Ordonnance of Philip II., which was published by the Duke of Alva while he was governor of the Netherlands; it runs as follows : "et pour empecher les abus, faudes, dols, et crimes commis a l'occasion des assurances sur lavie des personnes, et les gageures sur voyages et autres inventions semblables, nous les avons probibees et defendues, les prohibons et defendons comme nuisibles et contraires au bienetre general et comme de mauvais example," Pardessus, op. cit. iv ii6.

## Other forms of Insurance 297

M. Bensa has collected are in the form of a sale. The insurer declares that he has bought a certain amount of property from the insured, and that he has promised to pay a fixed price for this property by a certain date--the date being that on which the risk terminates. The fixed price represents the amount of the insurance. It is then declared that if a certain event--the risk insured against--does not happen, the money is not to be payable.

There is some evidence that contracts of this kind were known in England during this period.1 In the only two cases on the subject which have got into the bocks we have an insurance upon the life of one who was going abroad,2 and an insurance upon the life of a certain person for one year;3 and Rolle says that the latter form of insurance was in common use both among merchants and others.4 In other words, we get, as in the Middle Ages, insurances in view of certain definite risks, or for a definite period. But, it would seem from Rolle's statement, that these insurances were beginning to be used more extensively than in the Middle Ages; and Rolle's statement is corroborated by Malynes. Malynes says: 5 "Other Assurances are made upon the lives of men, for divers respects, some because their estate is meerly for term of life, and if they have children or friends to leave some part of their estate unto, they value their life at so many hundred pounds, for one or more years, and cause that value to be assured at five, six, ten, or more for every hundred pounds, and if he do depart this life within that time, the assurors pay the money; as it happened of late, that one being ingested for Sir Richard Martin knight, Master of the Mint, caused $300 to be assured upon the life of the said Sir Richard, being some ninety years of age, and therefore gave twenty and five _pro centum_ to the assurors: the ancient knight died within the year, and the said assurors did pay the money. Also one Master Kidermaster having bought an office of the six clerks of the Charcery, and taken up money of others, caused for their assurance for many years together two thousand pounds to be assured upon his life after four and five inthe hundred, until he had paid that money ; which is very commodious. Likewise a traveller undertaking a voyage to Jerusalem or Babylon, delivering out money payable at his return, will providently assure a sum of money upon his life, either to secure some men that do furnish him with money to perform his voyage, and to put forth the greater sum, or to leave some means unto his friends, if he should die and never return."

Malynes makes it clear that these kinds of insurances against personal risk were beginning to be used somewhat as they are used in modern times. It was beginning to be discovered that " men cannot invent or imagine anything but the value of it may be assured."1 But as yet this discovery was a new thing. It is not till the eighteenth and nineteenth centuries that the legal incidents and consequences of these new forms of insurances, whether against personal risks or against risks to property other than risks of transport, begin to be defined.

Footnote 1: Malynes, op. cit. t07; this is illustrated by a tale about a lottery told by Pepys' Diary iv t92; in this lottery each ticket cost $\\zeta$ro and there was only one blank, and, says Pepys, " the wisest man I met with was Mr, Chol:nley, who insured as many as would, from drawing of the one blank for rad; in which case there was the whole number of persons to one, which I think was three or four hundred. And he so insured about 2oo for 2oo shillings, so that he could not have lost if one of them had drawn it, for there was enough to pay the $\\zeta$ro; but it happened another drew it, and so he got all the money he took"; in the case of Davenant v, Midy (t695-t696) House of Lords MSS. (N.S.) ii p. t96 no. tooo there is mention in t095-t096 of an appeal to the House (which never came to a hearing) which turned on " policies of insurance concerning the taking or not taking of towns."

The developments of legal doctrine described in this chapter show that, by the end of the seventeenth century, the foundations of English commercial and maritime law had been laid. Commercial law, and large parts of maritime law, had ceased to be separate bodies of law, and were being absorbed into the system of English law. It was only those parts of maritime law, which were still administered by the court of Admiralty, which as yet remained to some extent outside that system. The accomplishment of this result had necessarily involved a large reception of foreign principles; but those principles had been modified by contact with a common law which, as the result of the political controversies of the seventeenth century, had won a position of supremacy in the state ; and they were being adapted to a legal system in which the law was supplemented by a system of equity administered in a distinct tribunal. As I have already pointed out, the need for this modification and adaptation caused the development of English commercial and maritime law to be slower than in states where they were administered in separate tribunals, which applied

## Conclusions

the principles which civilians and canonists had for centuries been developing from a basis of Roman law.1 But, from the point of view of the common law, the absorption of this new domain of commercial law was absolutely necessary to the consolidation of its position of supremacy in the state. It did for that part of the common law which was concerned with private relations, what the results of the political controversies of the seventeenth century had done for that part of it which was concerned with public law. For just as the results of those political controversies had made it the supreme law in the state, so this absorption of the domain of commercial law gave it its continued supremacy over the private law of the future.

Footnote 1: Vol. v 153-154; vol. vi 522.

Down to the seventeenth century the land law had been by far the most important branch of the common law. The common law possessed a body of principles applicable to this part of the law, which were both more numerous and worked out into greater detail, than the principles applicable to any other part of the law. The broad result of the developments related in this chapter was to establish commercial law as a rival to the land law--a rival which will in the succeeding centuries out the land law from its old position. But this result will not be accomplished immediately. The immediate results were a broadening of the horizon of the common lawyers, and a consequent willingness to receive new ideas and new points of view, which were conditions precedent to the continued supremacy of a law which claimed to guide the legal development of a progressive state. Nor are these results surprising. This commercial law which had been thus received into the common law was just sentium; and its reception had the same results upon the mediaeval fabric of the older parts of the common law, as the reception of the Roman jus gentium of the peregrine preactor had long ago had upon the jus civile.

Already at the end of the seventeenth century these results had begun to be apparent. We cannot, it is true, say that they produced much direct effect upon the land law. That law, as we have seen, continued to be very mediaeval right down to the reforms of the nineteenth century and, in spite of those reforms, it still bears many marks of the fact that it is a branch of our private law which dates from that feudal period when it was much more than merely private law. But we have seen that the new needs and new ideas of this age had left their marks even on the land law, and that its rules were being adapted to the new needs of landowners. On all other branches of the common law the effect of the ideas which came with this new commercial jurisdiction is beginning to be directly apparent. We have seen that the

### 300 The law merchant

result of Holt's controversy with the merchants over the negotiability of promissory notes, was to make it clear that the lawyers must adapt their technical rules to the needs and usages of commerce ; \[1\] and the manner in which other branches of the common law were developing show that the lawyers were alive to this necessity. We have already seen that the development of the law of bailment,\[2\] of the conception of a chose in action,\[3\] and of many branches of the law of contract,\[4\] illustrate this fact; and that it is to a small extent reflected in the statutory developments of the criminal law as to forgery,\[5\] larceny,\[9\] and shipping.\[6\] We shall see in the following chapter that it is also reflected in the dcyclopments made in the law both as to specific torts, and in the principles of liability for tort.

${}^{1}$Above 176.

${}^{2}$Vol., /ii 432-433, 450-455, 461-463; above 259.

${}^{3}$Vol., vi 515 seqq.

${}^{4}$See above chap. iii SS 2.

${}^{6}$Vol., vi 400-401.

## Chapter 5 Crime and Tort

THREE sets of influences have shaped the technical development of this branch of the law during this period--the Legislature, the new ideas introduced by the Council and the Star Chamber, and the doctrines of the common law. I have given some account of the first1 and second 2 of these influences in the first Part of this Book. In this chapter I shall deal mainly with the third of these influences--the doctrines of the common law--and show how these doctrines, as both expanded and modified by the first two of these influences, have created our modern law of crime and tort.

Footnote 1: Vol. iv 492-532 ; vol. vi. 399-407.

In this, as in the medieval period,3 the influence of the Legislature upon the growth of the criminal law has been great. We see it in the creation of new statutory treasons either to meet particular political emergencies, or to supplement the deficiencies of Edward III.'s Statute of Treason. We see it no less in the creation of various new felonies. Some of these were intended to supplement the law of treason by providing a more severe punishment for such offences as riots, seditious libels, or conspiracies. Others were directed to an object which, at this period, was considered to be closely cognate to the suppression of offences akin to treason--the penalizing of dissent from the national church, whether the dissenter was a Roman Catholic, a Protestant, or an atheist. Others created new or extended old offences against person or property. Others were connected with that long series of statutes in which the state had prescribed its policy in relation to industry and commerce.4 Others were passed to penalize certain forms of immorality, which the weakness of the ecclesiastical courts made it expedient to hand over to the common law. And the activity of the Legislature was not exhausted by the creation of these new treasons and felonies. We have seen that this period is marked by the creation of many new crimes below the degree of felony. These " risidemeanours " are definitely criminal offences, and become gracually quite distinct from thosequasi-criminal trespasses which are so striking a feature of the medieval common law.\[1\] They are either less serious forms of similar offences which rank as felonies, or they are minor forms of wrongdoing, which are, for the most part, matters to be dealt with by the justices of the peace sitting in their petty or quarter sessions. It was the creation of these misdemeanours which won back to the field of crimina. law many forms of wrongdoing, which the emphasis laid in the Middle Ages on the civil aspect of trespass had tended to annex to the field of tort.

But this enlargement of the field of criminal law was not due entirely to the Legislature. It owed at least as much to the new ideas introduced by the Council and the Star Chamber. We have seen that it was through the influence of the procedure of the Star Chamber that the criminal procedure of the common law tended to acquire rules, which, by giving many advantages to the Crown, increased the strength of the criminal law.\[2\] The Star Chamber also materially helped the development of the law as to riot, and created the law as to the illegality of attempts to commit crimes. It added important new elements to the crime of conspiracy, and it created the crime of libel. I: helped to enlarge the ideas of the common law as to fraud ; and by its firm action in regard to such offences as maintenance, chanperty, and embracery, it helped to make them less serious menaces to the proper administration of the law, and thus to reduce them to the comparatively unimportant position which they hold in modern law.\[3\]

Both the enlargement of the criminal law by the Legislature, and the new doctrines of the court of Star Chamber, necessarily exercised important effects upon the development of many common law doctrines in the sphere of crime and tort. But in both spheres the common law contributed something of its own. In the sphere of treason we shall see that it added to the law the doctrine of constructive treascn ; and that this addition, to a large extent, rendered unnecessary those statutory extensions of Edward III.'s statute, which were so frequently made during the sixteenth and seventeenth centuries.\[4\] In the sphere of felony it developed and filled up the somewhat bare outlines of the medieval common law as to the essentials of the common law felonies. One or two illustrations of this process will indicate the manner in which the rules of this branch of the modern criminal law were built up on the basis of medieval principles.

The readiness with which all classes resorted to lethal weapons to assert their rights, or to avange any insult real or fancied, gave abundant opportunity for elaborating the distinctions between the

**COMMON LAW FEIONIES 303**

various kinds of _homicide_, and, in particular, the distinction between murder and manslaughter.1 Thus it was ruled in 15532 that, if A set on B intending to kill him, and C suddenly intervened in the combat, and B was killed, though it was murder in A, it was only manslaughter in C; and, it would seem from Plowden's comment, that this ruling settled a point of law which had long been doubtful.3 In 1612 it was ruled that if a man, being provoked, in hot blood beat another with a weapon not likely to cause death, and it did cause death, he was only guilty of manslaughter;4 but it was held in 1666 that the fact that there was provocation would not reduce the crime from murder to manslaughter, if the accused had used a weapon likely to cause death,3 a decision which was approved by Holt, C.J., in 1698.6 On the question what would amount to a provocation, it was ruled in 1666 that mere words would not be an adequate provocation for homicide;" but if upon ill words both parties suddenly fight, and one kill the other, this is but manslaughter, for it is a combat between two upon sudden heat."7 But other cases show that this question gave rise to many difficult questions and divisions of judicial opinion.8 In cases where the death had nct followed immediately upon, and was not solely occasioned by, the stroke, the law was inclining to the view that the person who gave the stroke was guilty of homicide;9 but that a person who, without using physical violence, had occasioned a death by " working on the fancy of another," or by unkind or harsh usage, which was not ordinarily calculated to have this effect, was not guilty.10 The rules as to

### Crime and Tort

what facts would prove that a man had killed another by misadventure \[1\] or se defendendo \[2\] were being elaborated. Similarly the cases in which homicide was justifiable were restated \[3\]; and the construction of the statute of 1532 \[4\], which excused from guilt those who killed persons attempting robbery or murder in or near the highway, or in manison houses, gave rise to a number of decisions as to the cases which fell within its protection \[5\]. The suicide of Hales, J., in 1554 gave rise to a restatement of the rule that this form of homicide was murder, because it was of malice propense \[6\]; but we shall see that it was during this period that the lawyers were beginning to develop certain constructive extensions of this requirement of malce, which in many cases gave it a very artificial meaning, and tended to render very technical the distinctions between the different forms of homicide \[7\].

The inconvenience caused by the very narrow ground covered by _larceny_\[8\], led the judges to widen it as far as possible, by holding that a very small physical interference with the property would amount to an asportation \[9\]. The differences of judicial opinion as to whether the appropriation of the bed linen by a lodger in furnished apartments was llaceny \[10\], led, as we have seen, to a statute which declared that in such a case larceny had been committed; \[11\] and the relations both of husband and wife, and of the co-owners of property, led to some difficulties where goods were appropriated by a wife or a co-owner \[12\]. In the case of _robbery_ the law was inclined to construe somewhat liberally both the acts which amounted to the taking of property by "'putting in fear," and the acts which amounted to "'a taking from the person " \[3\]; but the view was strictly adhered to that there must have been a taking, and that the taking must have been effected by violence or putting in fear \[14\]. It was during this period that the essentials of the offence of _burgfary_ were precisely ascertained \[15\]. It was settled, after some conflict of opinion, that there must be an actual break

**MISDECEMOUR AND TORT 305**

ing, and that a mere breaking in law 1 was not sufficient.2 On the other hand, an entry gained under false pretences in order to commit a colony, was a sufficient breaking,3 and so was the breaking of an inner door by one who had come in through an open door or window.4 In the case of _arson_ we have seen that it was settled in this period that a man who had burned his own house was not guilty of this crime.5

Footnote 1: "Everyone that enters into another's house against his will or to commit a felony, tho' the doors be open, doth in law break the house," Hale, P.C. i 551.

Footnote 2: "And altho' in the remembrance of some yet alive Sir Nicholas Hide chief justice did hold that a breaking in law was sufficient to make a burglary ... yet the law is that a bare breaking in law ... is not sufficient to make a burglary without an actual breaking," ibid i 551-552.

Footnote 3: "Kelyng 42-43; cp. R. V. Cassy and Cotter (t666) ibid 62-63.

Footnote 4: R. v. Cassy and Cotter, Kelyng g2-63; R. v. Johnson (t666) ibid 68-59; it was held in the last cited case that if no door had been broken, but only a trunk or box, the offence did not amount to burglary.

Footnote 5: Vol. iii 370 n. 7.

Footnote 6: (1553) Plowden 97-98; Kelyng 52-53; Hale, P.C. i 613-618; vol. iii 307-310.

Footnote 7: Below 433-446.

Footnote 8: Vol. iv 512-521; vol. vi 402-405.

Footnote 9: Vol. v 197-214.

Footnote 10: (1635) Cro. Car. 376.

Footnote 11: Vol. iii 378, 370-371.

Footnote 12: Ibid 406-407, 407-411.

Footnote 13: Vol. vi 408-411.

Footnote 14: Vol. vi 412-405.

Footnote 15: Vol. vi 408-411.

Footnote 16: (1635) Cro. Car. 376.

Footnote 17: Vol. iii 378, 370-371.

Footnote 18: Vol. vi 512-521; vol. vi 402-405.

Footnote 19: Vol. v 197-214.

Footnote 10: (1635) Cro. Car. 376.

Footnote 11: Vol. iii 378, 370-371.

Footnote 12: Ibid 406-407, 407-411.

Footnote 13: Vol. vi 408-411.

Footnote 14: Vol. vi 408-411.

Footnote 15: Vol. vi 408-411.

Footnote 16: (1635) Cro. Car. 376.

Footnote 17: Vol. vi 408-411.

Footnote 18: Vol. vi 408-411.

Footnote 19: Vol. vi 408-411.

Footnote 20: (1635) Cro. Car. 376.

Footnote 21: Vol. vi 408-411.

Footnote 23: Vol. vi 408-411.

Footnote 24: Vol. vi 408-411.

Footnote 25: Vol. vi 408-411.

Footnote 26: Vol. vi 408-411.

Footnote 27: Vol. vi 408-411.

Footnote 28: Vol. vi 408-411.

Footnote 29: Vol. vi 408-411.

Footnote 20: (1635) Cro. Car. 376.

Footnote 21: Vol. vi 408-411.

Footnote 22: Vol. vi 408-411.

Footnote 23: Vol. vi 408-411.

Footnote 24: Vol. vi 408-411.

Footnote 25: Vol. vi 408-411.

Footnote 26: Vol. vi 408-411.

Footnote 27: Vol. vi 408-411.

Footnote 28: Vol. vi

### 306 Crime and Tort

But, in certain cases, the development of the law relating to those wrongs, which hover on the border line of crime and tort, was complicated by the two somewhat different streams of doctrine, which originated in the courts of common law and in the Star Chamber. When the jurisdiction of the Star Chamber was abolished, many of the doctrines which it had developed were taken over by the common law courts. These courts were therefore obliged to co-ordinate and reconcile these divergent streams of doctrine. No doubt the common law was enriched by the reception of these new ideas. But they tended to produce a development of the law which was not altogether harmonious, or altogether convenient; and we shall see that its results are plainly visible to-day in such branches of the law as defamation1 and conspiracy.2 In particular, it tended to obscure still further the line between crime and tort. In the Middle Ages and later, the double nature of, and the wide field covered by trespass and its offshoots, effectually prevented any real distinction between tort and crime, based upon the nature of the act done.3 In this period, the fact that the Star Chamber treated certain acts as criminal, while the common law courts remedied the same or similar acts by a civil action on the case for damages, made it more impossible than ever to draw any distinction on these lines. " If," says Professor Kenny,4 " we know any particular occurrence to be a crime, it is easy to ascertain whether or not it is also a tort, by asking if it damages any assignable individual. But there is no corresponding test whereby, when we know an occurrence to be a tort, we can readily ascertain whether or not it is also a crime. We cannot go beyond the rough historical generalization that torts have been erected into crimes, whenever the law-making power had come to regard the mere civil remedy for them as being inadequate."

Footnote 1: Below 36r-367, 2 Below 379-384, 392-394.

Footnote 2: Vol. iii 37r-37k, 370-37r.

Footnote 3: See the classification of the various kinds of proceedings which may be taken against wrongdoers in Kenny, op. cit. 16-17.

The only certain lines of distinction are to be found in the nature of the remedy given, and the nature of the procedure to enforce that remedy. If the remedy given is compensation, damages, or a penalty enforced by a civil action, the wrong so redressed is a civil wrong. If the remedy given is the punishment of the accused, which is enforced by a prosecution at the suit of the crown, the wrong so redressed is a crime or criminal in its nature.6 Even this test sometimes fails to establish a clear line of difference.6

Footnote 6: See Attorney-General v. Bradlaugh (1885) 14 Q.B.D. 667.

The need to adjust the doctrines of the medieval criminal

**CONSTRUCTIVE TREASON** **307**

law to their new environment in the modern state; the need to modify, to enlarge, and to elaborate the law of tort and the principles of civil liability, to meet the new demands caused by the more varied and complex life of such a state; and the need to adjust and to harmonize the two similar yet divergent lines of doctrine, which, during the sixteenth and seventeenth centuries, were being simultaneously developed by the common law courts and the Star Chamber--all had their influence on the technical development of many of the rules of the law of crime and tort. One or other of these causes is historically at the root of the most salient of these developments during this period. With these developments I shall deal in this chapter under the following heads:--$ t. Constructive Treason and other Cognate Offences; SS 2. Defamation; SS 3. Conspiracy, Malicious Prosecution, and Maintenance; SS 4. Legal Doctrines Resulting from the Laws against Religious Nonconformity; SS 5. Lines of Future Development; SS 6. The principles of Liability.

**SS 1. Constructive Treason and other Cognate Offences**

_Constructive Treason_

The three clauses of Edward III.'s Statute of Treason which are designed to protect the safety of the state, are the clauses which make it treason to compass or imagine the king's death, to levy war against the king, and to adhere to his enemies.1

Footnote 1: For this statute see vol. ii 449-450; vol. iii 287-293.

The last of these clauses can be briefly dismissed. It has not been extended by construction in the same way as the first two clauses. The only difficulty which has arisen in connection with it has been the difficulty of deciding whether adherence to the king's enemies out of the realm is included in it.2 This difficulty arises solely from the wording of the clause, which enacts that it shall be treason, "if a man do levy war against our Lord the King in his realm or be adherent to the king's enemies in his realm giving to them aid and comfort in the realm or elsewhere." This clause might be construed to mean that the words " or elsewhere " govern only the words " giving to them aid or comfort," so that adhering to the king's enemies outside the realm is not treason; or it might be construed to mean that the words " orelsewhere " govern the whole clause, so that adhering to the king's enemies, and it would seem also the levying of war,1 outside the kingdom are treasm.2 It would seem from the precedents cited by Hale that, before the statute, adhering to the king's enemies outside the kingdom was treason; 3 and it seems to have been assumed that :he statute had not altered the law. This is reasonably clear from a dictum in a case of 1382, in which it was laid down that, if a man adhered to the king's enemies in France, " his adherence shall be tried where his land is, as has been often done of adherents to the enemies of the king in Scotland." 4 If he had no land, Hale thought that he might be tried in any county in England, which is by no means improbablc.5 No doubt there was some difficulty as to the trial of persons who had thus committed treason out of the kingdom, owing to the difficulties arising from the rules of venue.6 But we have seen that this difficulty was removed by the statute of 1543-1544; 7 and the wording of that statute makes it clear enough that, in the opinion of the Legislature, acts committed abroad might amount to treason.8 It follows, therefore, that Coke,9 Hale,10 and Hawkins11 were well warranted in holding that adhering to the king's enemies outside the kingdom was an offence which came within the scope of Edward III.'s statute. Later cases have all laid down the law in the same way; 12 and, after an elaborate review of the authorities, this interpretation was finally established as correct in 1916 in the case of _R. v. Casement._

Footnote 1: There seems to be no authority on the question whether levying of war out of the realm is treason; but the reasoning of R, v. Casement \[197\] I K.B. 98, and the authorities on which that decision is based, clearly apply; on the other hand, Coke, Third Instit, 9, and Hale, P.C. 130, 154-158, seem to say that the levying of war must be in the realm; and Kenny, Criminal Law 260, takes this view.

Footnote 2: The fact that the taxing of the king's enemies is not a taxing,

**CONSTRUCTIVE TREASON 309**

or imagining the king's death, secondly with the clause as to levying of war against the king, and thirdly with the later history of this branch of the law.

1. _Compassing or imagining the king's death._ The act made treason by the statute of Edward III. is not the killing of the king, but the compessing or imagining his death--the intention to kill him.1 Therefore in 1660 the judges resolved that the regicides should be indicted for compassing ; and that the actual murder of the king " should be made use of as one of the overt acts to prove the compassing of his death." 2 Even in the medieval period, the judges had seen that the fact that the gist of the offence was an intention to kill the king, could be used to extend its scope ; for they had held that the mere speaking of words might be an overt act which evidenced such an intention.3 They had seen as clearly as their successors that such an intention can be proved only by overt acts, " for the thought of man is not triable "; and that the statute could be extended by inferring an intention to kill from overt acts which were only remotely connected, if they were connected at all, with a formed intention to kill the king. But these cases were not followed. The modern construction of this clause, though it started from somewhat similar premises, was elaborated under a different set of legal and political conditions, and, unlike these medieval constructions, it resulted in the establishment of a definite body of legal doctrine.

Footnote 1: Vol. iii 292-293.

Footnote 2: "It was resolved that the indictments should be for compassing the death of the late king (the very compassing and imagining the king's death, being the treason within the stat. 25 Ed. 3) and then that we might't lay as many overt acts as we would, to prove the compassing of his death ; but it was agreed, the actual murder of the king should be precisely laid in the indictment, with the special circumstances as it was done, and should be made use of as one of the overt acts, to prove the compassing of his death," Kelyng 8.

Footnote 3: Vol. iii 293.

The Tudor kings respected the law ; and they were well aware that nothing could be more dangerous to the security of their none too secure throne than any attempt to pervert it. It was for this reason that, during the first sixty or seventy years of the sixteenth century, many statutes were passed to extend the scope of treason,4 and that very little is heard of any constructive extension of this clause of Edward III.'s statute. Hale, commenting on the statute of 1540-1541, which made certain riots treason, remarks that it shows, "how careful they were in this time not to be overhasty in introducing constructive treasons, and to shew how the opinions of the parliaments of Edward VI., queen Mary, queen Elizabeth went, as to the point of constructive treason, and how careful they were not to go far in extending the statute of 25 E. 3 beyond the letter

### Crime and tort

thereof."1 The repeal of the new treasons created by Henry VIII, on the accession of Edward VI., and the repeal of Edward VI.'s statutes on the accession of Mary,2 show that the creation of new treasons, even by Parliament, was not a popular exploit. It could hardly be expected, therefore, that the courts would undertake their manufacture.

Footnote 1: P.C. i 293. - 2 Vol. iv 495. - 3 Ibid. 4 H.C.L. ii 263. - 5 **That tho generally it be a fair topical argument, that when offences are made treasons by new and temporary Acts, they were not, treasons, within the statue of 25 E. 3, for if they were, they needed not to have been enacted to be treason by new statutes, as introductive of new laws in such cases, yet that both not hold universally true, for some things are enacted to be treason by new, yea, and temporary laws, respectively.**

But, though there was always a tendency to revert to the statute of Edward III., it was abundantly clear that that statute was wholly inadequate to protect the state. The Legislatures which repealed Henry VIII's and Edward VI.'s statutes were always obliged to re-enact some of the provisions of those statutes.3 The result was that, by Elizabeth's reign, the nation had begun to grow accustomed to the necessity for an extended law of treason, and to acquiesce in it. This changed attitude was due, not only to the existence of these statutes, but also to two other causes. In the first place, the modern territorial state was now well established. It was coming to be generally recognized that allegiance to the state ought to override all other ties. Hence it was realized that the statute was, as Stephen has said, " worded too narrowly if it was to be construed literally."4 In the second place, the dangers to the queen's life from the constant Roman Catholic plots, and the certainty that possibly the existence of the English state, and certainly its orderly development, were bound up with her safety, led the nation to acquiesce in any measures that could be devised to preserve it. Hence the constructive extensions of this clause of the statute came to be not only acquiesced in, but even approved as necessary means of defence in a time of national emergency. Under these circumstances, it is not surprising to find that it was in the latter part of the sixteenth century, that the constructive extension of this clause of the statute began to be made.

Footnote 1: P.C. i 293. - 2 Vol. iv 495. - 3 Ibid. 4 H.C.L. ii 263. - 5 **That tho generally it be a fair topical argument, that when offences are made treasons by new and temporary Acts, they were not, treasons, within the statue of 25 E. 3, for if they were, they needed not to have been enacted to be treason by new statutes, as introductive of new laws in such cases, yet that both not hold universally true, for some things are enacted to be treason by new, yea, and temporary laws, respectively.**

It would seem that, even before this date, the Legislature was aware that the vagueness of Edward III.'s statute made the exact content of its clauses by no means certain. Hale, while admitting that it was "a fair topical argument," that the offences made treasons by new and temporary Acts were not treasons within Edward III.'s statute, yet ponts out that it is by no means conclusive; for some of these new treasons turned out to be within that statute; and certain statutes which made offences felonies " have this wary clause, ' the same not being treason within the statute of 25 E. 3."5 The vagueness of the statute helped the

## 31 Constructive Treason 311

judges to extend it; but, as I have already pointed out, the fact that it was the intention to kill the sing, and not his murder, which was made treason, was the main reason why this clause could be so extensively construed. As we shall now see, the construction put upon it grew gradually more and more extensive, till it came to include much of the ground covered by the clauses relating to the levying of war against the king and adhering to his enemies.1

Footnote 1: Below 314-318.

It is obvious that an intention to kill the king must be proved from overt acts, which show that the person doing them had such an intention. " This compassing, intent, or imagination," says Coke,2 " though secret is to be discovered by circumstances precedent, concomitant, and subsequent." Now it is clear that it is only from overt acts, which obviously point to a design to kill the king, that an intention to kill him can properly be inferred. But the judges, in considering overt acts alleged to prove this intention, did not limit themselves to overt acts of this kind. They considered the overt acts of the accused " with all endeavour for the safety of the king."3 Therefore they were led to rule that acts which showed an intention, not to kill him, but to put any kind of restraint or force upon him, might be good evidence of an intention to kill him.

Footnote 1: Below 314-318.

We can see the doctrine in its initial stage in Coke's Third Institute. Treason, he says, must be proved by an overt act, " as if divers do conspire the death of the king, and the manner how, and thereupon provide weapons, powder, poison, assay harness, send letters, etc., or the like, for execution of the conspiracy. Also preparation by some overt act to depose the king or to take the king by force and strong hand, and so imprison him till he hath yielded to certain demands, this is a sufficient overt act to prove the compassing and imagination of the death of the king: for this upon the matter is to make the king a subject, and to dispoil him of his kingly office of royal government. And so it was resolved by all the judges of England, Hil. I Jac. Regis, in the case of Ld. Cobham, Lord Gray, and Watson and Clark, seminary priests: And so had it been resolved by the justices Hil. 43 Eliz. in the case of the earls Essex and Southampton, who intended to go to the court where the queen was, and to have taken her into their power, and to have removed divers of her counsel, and for that end did assemble a multitude of people; this being raised to the end aforesaid was a sufficient overt act for compassing the death of the queen. And so by woeful experience in former times it

### Crime and Tort

has fallen out in the cases of Ed. 2, R. 2, H. 6, and E. V. that were taken and imprisoned by their subjects."1 Similarly, "if a subject conspire with a foreign prince beyond the seas to invade the realm by open hostility, and prepare for the same by some overt act, this is a sufficient overt act for the death of the king."2 And, if such overt acts were advocated in a published book, the writing and publication of such a book was an overt act of compassing.3 Further, Coke decided in \_R. v. Owen_4 that saying that the king, being excommunicated by the Pope, may lawfully be deposed and killed by any whatsoever, and that such killing was not murder, was treason. Though, as we shall see, Coke held that nicely speaking scandalous words of the king was not treason, he was of opinion that words which, to use Bacon's phrase, " disabled the king's title,"5 and a fortiori words which incited to his murder, were an overt act which proved the compassing of his death.

Footnote 1: Third Instit. rz.

Footnote 2: Ibid I4.

Footnote 3: " Cardinal Poole .

**CONSTRUCTIVE TREASON 313**

in the opposite direction ; and some lawyers, including Bacon,1 would have liked to follow them. But probably the judges were influenced by the wording of the statutes which had, in the preceding reigns, created new treasons In many cases treasonable words had been made only a misdemeanour for the first offence, which shows, as Hale points out,' that, in the opinion of the Legislature, " words, tho' of an high nature, were not treason, nor an overt act of compassing the king's death." Secondly, though, as we have seen, Coke agreed that treasonable words set down in writing and published were an overt act of treason by compassing the king's death,2 in _Peachkam's Cax'_ neither he, nor many of the other judges, could be persuaded that the writing of treasonable words in a sermon, which was never preached or published, nor intended to be preached or published, was treason.3 No doubt opinion was divided on this point .6 but Peacham, though found guilty, was not executed. It would seem that Coke regarded such an unpublished document as being equivalent to mere words, or perhaps, as they were not published, as even less heinous. Thirdly, Coke laid it down that a mere conspiracy to levy war was " no overt act to or manifest proof of thecompassing of the death of the king within this Act," on the somewhat inconclusive ground that so to hold would confound the several clauses of the statute.7

Footnote 1: Spedding, Letters and Life of Bacon v 129, 120 ; cp, vi 92-93.

Footnote 2: P.C. i 315 ; and cp, his comment on r, 2 Phillip and Mary c. 3 at p. 312.

Footnote 3: Above 312 and n. 3.

Footnote 4: (f15) Cor. Car. i25 ; Spedding, Letters and Life of Bacon v 127.

Footnote 5: (f15) Edward Peacham was indicted of treason for divers treasonable passages in a sermon which was never preached, or intended to be preached, but only set down in writings, and found in his study; he was tiled and found guilty, but not executed. Note, that many of the judges were of opinion that it was not treason," Cro. Car. i25.

Footnote 6: Thus Chamberlain, writing to Carleton Feb. 20, 1614, says, " the king since his coming bath had the opinion of the judges severally in Peacham's Case, and it is said that most of them concur to find it treason. Yet the lord chief justice is for the contrary," cited Spedding, op, cit, v 127 n.; for James's own view that Peacham was guilty of treason see ibid 105-106.

Footnote 7: (f14) One of them (i.e. the different treasons such on the Act) cannot be an overt act for another. As for example : a conspiracy is had to levy war, this (as bath been said and so resolved) is no treason by this Act until it be levied, therefore it is no overt act or manifest proof of the compassing of the death of the king within this Act .

These limitations upon the constructive extension of this clause of the Act were not wholly logical. They were, as I have said, largely the product of the political conditions of the day ; and it is clear that they were distasteful to the crown lawyers of James I.'s reign. Bacon, in his conference with Coke on _Peacham's Case_, contended that " there be four means or manners whereby the death of the king is compassed or imagined. The first by some particular fact or plot. The second by disabling his title ; as by affirming that he is not lawful king, or that another ought to be king, or that he is an usurper or a bastard, or the like. The

### Crime and Tort

third by subjecting his title; as either to pope or people; and thereby making him of an absolute king a conditional king. The fourth by disabling his regiment, and making him appear incapable and indign to reign."1 Coke's view that mere words coming under the fourth head were not treason, unless accompanied by some other overt act, prevailed.2 But some of the more general rules laid down by Bacon were, as we shall now see, destined to prevail in the succeeding centuries; and even unpublished writings and mere words were, at the latter part of the seventeenth century, allowed to have a weight which it is difficult to suppose would have been approved by Coke and his fellow judges.

Footnote 1: Spedding, Letters and Life of Bacon v rog. ${}^{\\

**CONSTRUCTIVE TEASON 315**

and to the killing of the king, was an overt act, which could be used to prove a compassing of his death. This was in conformity with Coke's opinion.1 But in _Algervon Sidney's Case2_ this ruling was extended to cover the case of a writing, in which it was in effect alleged that the king was subject to Parliament, and that kings could be deposed.3 As it was not proved that the paper was published,4 this goes very near to holding, contrary to Coke's view, and in accordance with actual verdict in _Peacham's Case_, that the mere writing of such a paper was an overt act of compassing the king's death.5 This ruling could only be justified in one of two ways--either on the unproved assumption that the writing was intended to be published, or, on the stronger ground, that it was so connected with the other overt acts alleged, that the writing, though not published, was evidence to support and explain them.6 The latter ground was, as we shall see, accepted as good law after the Revolution.7 Thirdly, shortly after _Pine's Case,8_ in which, as we have seen, it had been laid down that merely scandalous words spoken of the king did not amount to treason,9 it had been laid down in \_R. v. Crohagan_10 that. if wo:ds purporting an intention to kill the king were accompanied by an overt act, which seemed to imply an intention to put the intention into execution, this would amount to treason. In that case the accused, being at Lisbon, had said, " I will kill the king if I may come to him." He had then come to England, and, when arrested, had spoken scornfully of the king. It was held that he was rightly convicted for compassing the king's death. This case came near to that.of _R. v. Owen_ ;11 but the court seems to have laid some stress

### Crime and Tort

upon the facts that the words were accompanied by the overt act of coming to England, and that he had used scornful words when arrested ; and this is the manner in which the case was explained and justified by later lawyers.1 It followed that words could give a treasonable colour to an otherwise innocent overt act. It is, therefore, not surprising that, in 1660, the judges showed a tendency to minimize the importance of the difference between written and spoken words. "Words spoken," it was said,2 "'are the same thing if they be proved. Words are the natural way for a man whereby to express the imaginations of the heart. If it be _any way_ declared that a man imagineth the king's death, that is treason within the stat. 25 Edw. 3." $\\Delta$nd this tendency appears in Jeffreys' summing up in _Sidney's Case_.3

Footnote 1: Foster, Crown Law 203. ${}^{2}$ Kelyng 13. ${}^{3}$ Above 315 n, 6.

Footnote 4: Charnock's Case 2 Salk. 631 " the difference (between words and writings) appeared to me to be very great, and it heh here. Seditious writings are permanent things, and if published they scatter the poison far and wide. They are acts of deliberation, capable of satisfactory proof, and not ordinarily liable to misconstruction. ... Words are transent and fleeting as the wind, the poison they scatter is at the worst confined to the narrow circle of a few heaters. They are frequently the effect of a sudden transport, easily misunderstood and often misreported," Foster, Crown Law 204.

The view that there was no difference between written and spoken words was not followed after the Revolution. The rule adopted was in accordance with the cases decided earlier in this century--_R. v. Owen, Pine': Case_, and _R. v. Crohagan._ "Loose words," said Holt, C.J., in 1696,4 " spoken without relation to any act or project are not treason : but words of persuasion to kill the king are overt acts of high treason ; so is a consulting how to kill the king ; so if two men agree together to kill the king, for the bare imagination and compassing makes the treason, and any external act that is a sufficient manifestation of that compassing and imagining is an overt act"; and words, as Foster says,5 " may explain the meaning of an overt act." But it was only under these conditions that words could be an overt act of treason. Similarly, the view that unpublished writings could be given in evidence to prove an overt act of compassing, was rejected. Such writings can only be given in evidence if they are relevant to enforce or explain other overt acts charged in the indictment. Thus, as Foster explains,6 "the papers found in Lord Preston's custody, those found where Mr. Layer had lodged them, the intercepted letters of Dr. Hensey, were all read in evidence as overt acts of the treason respectively charged on them. ... For those letters

## 8 Constructive Treason 317

and papers were written in prosecution of certain determinate purposes which were all treasonable and then in contemplation of the offenders, and were plainly connected with them." The rule as so settled was probably the rule which Hale considered to be the law.1

Footnote 1: Hale, P.C. i i i i8; Foster, Crown Law 19S.

But, except in these two cases, the seventeenth-century decisions, extending the constructive interpretation of this clause, were adopted, and even carried further, after the Revolution. And, here again, the extension was probably inevitable. If a conspiracy to levy war, and the publication of a writing advocating the deposition of the king, or merely arguing that it is lawful to depose him, are overt acts which can be given in evidence to prove the compassing of his death, it will be difficult to draw the line at these acts. It will be difficult to rule out any acts done in preparation for any other act, which, if accomplished, will be an overt act. That no attempt was made to draw the line is clear from the case of Lord Preston.2

Footnote 2: (1691) 12 S.T. 646.

Foster's summary of that case is as follows: 3 "Lord Preston and two other gentlemen had procured a smack to transport them to France, but were stopped before they got out of the river, and their papers seized. Among the papers was found a scheme intended to be laid before the French king or his ministers for invading the kingdom in favour of the late king James II.; with many letters, notes and memoranda, all tending to the same purpose. Lord Preston upon his trial insisted, among other matters, that no overt act was proved upon him in Middlesex, where all the overt acts were laid, for he was taken with the papers in the county of Kent. But the court told the jury, that if upon the whole evidence they did believe that his lordship had an intention of going into France, and to carry those papers thither for the purposes charged in the indictment, his taking boat at Surrey stairs which are in Middlesex, in order tc go on board the smack, was a sufficient overt act in Middlesex. Every step taken for those purposes was an overt act."4 The last sentence contains the gist of the matter. It comes to this--every act, however remotely connected with an overt act of compassing the king's death, is itself an overt act. As the future Lord Eldon contended, when, as

### Crime and Tort

attorney-general, he was prosecuting Hardy in 1794,1 any act which showed that the person doing it intended "to put the king in circumstances in which, according to the ordinary experience of mankind, his life would be ir danger," might be given in evidence as an overt act of compassing his death. It followed that this clause of the statute could be made to cover the ground covered both by the clause against levying war against the king, and by the clause against adhering to his enemies.2

Footnote 1: 24 S.T. at p. z56, cited Stephen H.C.L. ii 276.

Footnote 2: Foster, Crown Law 197$-$'' leyving war is an overt act of compassing . . and so is a reasonable correspondence with the enemy, though it falleth more naturally within the clause of adhering to the king's enemies."

It was attempted in 1794 to apply these doctrines to the activities of the Constitutional and the London Corresponding Societies.3 They were advocating universal suffrage and annual Parliamcnts ; and they carried on their propaganda through their branches, and through a convention in which their branches were represented. They asserted that they only wished to press for these reforms by constitutional means. The Crown asserted that they were preparing for the deposition of the king and the establishment of a republic. The jury, by acquitting them, showed that they did not believe the cortentions of the crown. But this acquittal by no means meant the end of the doctrine of constructive treason. As Stephen has pointed out, it was applied in 1797 and 1798.4 But the trials of 1754 showed that it was an exceedingly unpopular doctrine ; and the acquittals may have been partly due to that fact.5 However :hat may be, it was in 17956 that we got the first of those statutory interferences with the doctrine, which have ended by putting the law on a different basis. But with this legislation I cannot deal till I have considered the constructive extension of the cause as to levying war against the king.

Footnote 3: 24 S.T. 199 (Trial of Hardy); z5 S.T. x (Trial of Hoaxe Teoke); Stephen, H.C.L., ii 274-277.

Footnote 4: H.C.L., ii 278-279. 5 Ibid 277. 6 36 George III, c. 7.

(2) _Levying war against the king._

The offence declared to be treason by Edward III.'s statute was the actual levying of war, and not a conspiracy to levy war. A conspiracy to levy war was not made treason by the statute ; and this defect was, as we have seen, cured at first by statute,7 and eventually by the constructive extension of the clause directed against the compassing or imagining the king's death.8 Thus, the wording of the clause against levying war, shows that its constructive extension was bound to follow a line very different from that followed in the case of the clause which has just been

## 11 Constructive Treason 319

considered. In fact it proceeded upon the line of giving a greatly extended meaning to the phrase " levying war."

It is probable that the extensive construction put upon this clause began at an earlier date than that put upon the clause as to the compassing of the king's death; and that it was suggested by the distinction, drawn in the statute itself, between levying war against the king, and a mere private war.1 Coke tells us that " it was resolved by all the judges of England in the reign of king H. 8 that an insurrection against the statute of Labourers, for the in-hansing of salaries and wages, was a levying of war against the king, because it was generally against the king's law, and the offenders took upon them the reformation thereof, which subjects by gathering of power ought not to do."2 This, Hale tells us, is the first instance that he had seen of "'this interpretative levying of war."3 But it is clear that the judges, who came to this resolution, had arrived at the principe upon which the constructive extension of this clause proceeded--the distinction between the use of force for a merely private end which was a mere riot, and the use of force for a public object which was treason; and it is clear that this distinction is directly suggested by the statute.4

Footnote 1: Vol. iii 2gr ; Coke cites these words of the statute, and then says, " whereby it appeareth that bearing of arms in war-like manner, for a private revenge or end, is no levying of war against the king within this statute. So that every gathering of force is not high treason," Third Instit., to.

Footnote 2: Third Instit., to.

Footnote 3: P.C. i r32.

Footnote 4: Above n. I.,

Footnote 5: Third Instit. 9, to.

Footnote 6: Vol. iv 497.

This distinction was applied in many cases in the sixteenth and seventeenth centuries. Thus in 1597, in the case of _R. v Bradshaw and Others_, it was resolved that a rising to put down all enclosures was a levying of war within the statute; 5 and no doubt the judges were encouraged to give this wide construction to the statute by the Legislature, which had shown a readiness to extend it by making a conspiracy to levy war, and occasionally even a mere riot, treason.6 But it is obvious that it was sometimes difficult to draw the line between a riot raised to gratify a merely private quarrel, and a riot raised to effect some public general object. Thus, in the case of a riot of weavers in 1675, for the purpose of destroying engine looms, the judges were equally divided as to whether it was treason or not. Those who held that it was treason emphasized the fact that the design was to destroy all engine looms. Those who held that it was not, regarded it as being "only a particular quarrel and grievance between men of the same trade against a particular engine that they thought a grievance to them."7 And the manner in which the provisions of the statutes already referred to, had extended this clause, sometimes caused a difference of opinion. Thus, in 1668,

### Crime and Tort

in the case of _R. v Messenger_, _Basely and Others_, Hale refused to agree with the other judges that a riot to pull down bawdy houses, and to release prisoners, was treason, on the ground that a statute of Mary had enacted that such offences were felony.1 It was, however, agreed on all hands that there must be clear evidence that the intention was to effect a purpose by warlike violence;2 and that, if several persons had agreed to levy war, and some had proceeded with their warlike design, and others had not actually appeared in arms, the latter were equally guilty of treason, because there are no accessories in treason.3

Footnote 1: Kellyng 75; P.C. i 134-135.

Footnote 2: Hale, P.C. i 150; below 328.

Footnote 3: Kellyng 19.

As in the case of the constructive extension of the clause directed against the compassing or imagining the king's death, so in the case of this clause, the Revolution did not stop the development of the law. The law laid down by Coke and Hale was re-stated and applied in 1710 in the case of _Dammaree and Purchase_,4 who were convicted of treason for raising a riot to destroy all dissenting meeting-houses. In Stephen's opinion, their conviction was a more severe application of the law than any of the previous decisions5--indeed he almost questions its correctness.6 But it is difficult to see what other conclusion could have been reached, without disregarding established authority; and Foster does not question its correctness.7 The provisions of the Riot Act of 17148 have generally prevented a recourse to the doctrine applied in that case. But it was always possible to have recourse to it; and in 1781 Lord George Gordon was indicted for treason for helping to excite the riots, which raged between June 2nd and June 6th in that year, in consequence of the passing of the Act which had mitigated the penalties to which Roman Catholica were liable.9 In his charge to the jury Lord Mansfield laid down the law exactly as it had been laid down by Coke, Hale, and Foster.10 Lord George Gordon was acquitted, partly because the jury took

**CONSTRUCTIVE TREASON** **321**

the view, strongly urged upon them by Erskine,1 his counsel, that he had had nothing to do with the riots ; and partly perhaps because they disliked the doctrine of constructive treason.2 This case, therefore, like the cases of Hardy and Horne Tooke,3 effected no modification in the legal doctrine of constructive treason ; but, like those cases, it showed that some change in the law was needed. But, though, as we shall now see, important changes have been made, these changes have not affected this part of the doctrine of constructive treason.

Footnote 1: 21 S.T. 587-621; see especially pp. 591-592, cited Stephen, H.C.L., ii 273, and the perotation at pp. 616-621.

Footnote 2: Dr. Johnson's saying (cited Stephen, H.C.L, ii 272 n.) that " he was glad Lord George Gordon had escaped rather than a precedent should be established of hanging a man for constructive treason," is well known.

Footnote 3: Above 3$\\fs$.

Footnote 4: 36 George III. c. 7 SS i; made perpetual by 57 George III. c. 6 SS x.

Footnote 5: 17, i2 Victoria c. 12 SS i; the object of the Act was, by diminishing the penalty, to render it easier " to prosecute these crimes with success," Kenny, Criminal Law 274.

(3) _The later history._

In 1795 4 a statute was passed which, in effect, gave statutory force to the constructions which had been put upon the clause of Edward III.'s statute relating to the compassing of the king's death. It provided that it should be treason to compass : (i) not only the death, but also the bodily harm, imprisonment, or restraint of the person of the king, or his deposition ; (ii) the levying of war on him either in order to compel him to change his policy, or in order to overawe both or either of the houses of Parliament ; (iii) the stirring up of any foreigner to invade any part of the king's dominions ; such compassing being evidenced by printing, writing or other overt act. In 1848 5 it was in effect enacted that, such of the treasons set out in the last cited Act as related to the compassing the death or bodily harm, the imprisonment or restraint of the person of the king, should be treason ; and that the other compassings specified in the Act should be felony.6 But nothing in the Act was to affect the statute of Edward III.7 That statute must of course be taken to bear the construction which the judges have put upon it ; for there is nothing in this legislation to negative that construction.8 The result is that the acts made felony by the statute of 1848 could, if the crown wished, be treated as constructive treason by virtue of the Act of Edward III. As Professor Kenny justly says,9 it is " a singular jurprecisely the same action should thus occupy, simultaneously, two different grades in the sphere of crime."

This legislation did not touch the clause relating to the levying of war against the king. The result is that the constructive extension of this clause is in no way affected. Therefore, as Stephen says,1 " a great riot for any public object " could still be treated as treason.

Footnote 1: H.C.L. ii 28o-281.

_Offences Cognate to Treason_

At the time when the statute of Edward III. was passed treason was regarded rather as an offence against the person of the king than as an offence against the state.2 It has never ceased to be an offence against the person of the king. In fact, since the $\\Delta$ct of 1848, it is only offences against the state which take the form of attempts against the person of the king, which must be treated as treason. But it is obvious that, as the conception of the state was more distinctly realized, and as the king came to be conceived as the head and representative cf the state, treason must come to be regarded as essentially an offence, and the most heinous offence, against the state. We have seen that technical expression was given to this transformation in the conception of treason, partly by the Legislature, and partly by the growth of the doctrine of constructive treason. And, as the result of this transformation, we can see the growth of a group of offences cognate to treason. As compared with treason they are minor offences ; but they all have this feature in common with treason that they are either (i) seditious in character or tendency, i.e. they aim directly at the diminution of the authority of the state ; or (ii) if not seditious, they involve serious breaches of the peace, and an interference with the orderly government of the state. I have already dealt with such of these cognate offences as were created by statute during the sixteenth and seventeenth centuries.3 At this point I propose to deal with such of these offences as were mainly shaped by the writings of the lawyers and the decisions of the courts.

Footnote 2: Vol. iv 497, 593 ; vol. vi 399-400.

The offences, directly secitious, which fall under the first of these heads, are, firstly, the publication of seditious words or writings, and, secondly, seditious conspiracies. Of these two matters I shall speak in the two following sections.4 The offences, less directly seditious, which fall under the second of these heads, are misprision of treason, and unlawful assemblies routs and riots. It is with these topics that I shall now deal.

Footnote 4: Below 337:346, 379:384.

(40

**Offerences cognate TO TREASON 323**

felony had been committed, failed to disclose it;1 but that in the sixteenth century it had got an extended meaning.2 When we talk of misprisoning of treason or felony we are using the term in its original sense; and that its original sense was distinct from its secondary sense is clear from the fact that Coke deals with misprison of treason and felony, and with misprisoning generally, in separate chapters.2

Footnote 1: Vol. iii 388-389. 2 Ibid 389 r. I. 3 Third Instit. cap, iii and lvv, 4 "The' some question was antiently, whether bare concealment of high treason were treason (vol, iii 389 n. 1), yet that is settled by the statue of 5, 6 E, 6 cap. 11, and r, 2 P. and M. cap. to, _viz_, that concealment or keeping secret of high treason shall be deemed and taken only misprison of treason, and the offender therein to suffer and forfeit, as in cases of misprisoning of treason, as hath heretofore been used," Hale, P.C. i 371.

Footnote 3: footnotemark:

When Coke wrote, the offence had, as a result of statutes of Edward VI. and Mary's reigns, been distinguished from treason; and, even before that time, its punishment had been definitely fixed.4 Its punishment was imprisonment for life, forfeiture of goods, and forfeiture of the profits of land for life.5 MISPRION of felony bore the same relation to felony as misprisoning of treason bore to treason. It differed only in the fact that its punishment--fine and imprisonment 6--was less severe. But, though by the middle of the sixteenth century misprisoning of treason had been distinguished from treason, it was not till the middle of the seventeenth century that the two offenses were clearly differentiated, by the definition of the extent of the knowledge, the concealment of which would amount to misprison. Firstly, in 1662 it was resolved by the judges,7 " that whe:e a person knowing of the design does meet with them, and hear them discourse of their traitorous designs, and say or act nothing; this is high treason in that party, for it is more than a bare concealment, which is _misprison_, because it sheweth his liking and approving of their design; but if a person not knowing of their design before, come into their company, and hear their discourses, and say nothing, and never meet with them again at their consultations, that concealment is only misprisoning of high treason. But if he meet with them again, and hear their consultations, and then conceal it, this is high treason. For it sheweth a liking and an approving of their design." Secondly, in 1663 it was resolved 8 that "to make a misprisoning of treason, there must be a knowledge of the design, and of the persons or some of them; for a man cannot be said to conceal what he cloth not know; and therefore if one tell J. S. in general, that there will be a rising without acquain

### Crime and tort

who are to rise or with the nature of the plot, if J. S. conceal this, this is no misprison of treason, because he hath no knowledge of the treason."

Certain statutes of Elizabeth's reign made misprison of treason "a kind of substantive offence, and not consequential upon the making of treason."1 For instance those who counterfeited foreign gold coin,2 or who failed to disclose any offer of reconciliation to the Roman Catholic religion,3 or who aided or maintained any person who tried to pervert any of the queen's subjects from their allegiance to the church as by law established,4 were declared to be guilty of this offence.

## 2 Offences cognate to Treason 325

have seen that certain kinds of acts, which are included in the definition of these two offences, had been the subject of important statutes of Edward VI., Mary and Elizabeth's reigns ;1 and, during the whole of this period, both offences were becoming the centres of important bodies of legal doctrine. I shall deal with the development of this body of legal doctrine under the following heads : (i) The definition of these offences ; (ii) the relation between the repeal of the earlier legislation on the subject of riot to the distinction between riot and treason ; and (iii) the liabilities of rioters, and the measures which may or ought to be taken for the suppression of riots, and the dispersal of unlawful assemblies.

Footnote 1: Vol. iv 497: Vol. v 198. 3 I Ld. Raym. 484.

Footnote 4: It was pointed out that, "if the indicment had been that the defendant, with divers other disturbers of the peace etc., had committed this riot and battery, and the verdict had been as in this case, the King might have had judgment," 'bid.

Footnote 5: " An unlawful assembly is when ther or more assemble themselves together to commit a riot or trout, and do it not," Coke, Third Instit. 176; Hawkins, P.C. Bk. i, c, 65 SS 9; vol. v 198.

(i) The definition of these offences.

(ii) The relation between the repeal of the earlier legislation on the subject of riot to the distinction between riot and treason ; and (iii) the liabilities of rioters, and the measures which may or ought to be taken for the suppression of riots, and the dispersal of unlawful assemblies.

(i) The definition of these offences.

The view recognized by the court of Star Chamber,2 that it takes at least three persons to commit the offence of riot or unlawful assembly, was acted upon in the case of _R. v. Sudbury_ in 1700.3 In that case three persons having been indicted for an unlawful assembly a rout and a riot, one was acquitted and two found guilty ; and judgment was arrested because two could not be guilty of these offences.4 It is obvious that to constitute a riot the element of violence must be present ; and as it is clear that the offence of unlawful assembly has, from the first, been regarded as an offence which is preparatory to or contemplates a riot,5 it cannot be committed unless both the purpose of the assembly is illegal,6 and there is an element of violence in the illegal purposes for which the assembly is gathered together. It follows that a definition of this offence, which makes it include an assembly which contemplates the commission of any illegal act, is not historically sound ; and it is the better opinion that it is not good law.7 Moreover, there must be an element of deliberate purpose ; for if the members

### Crime and Tort

of a lawful assembly suddenly fall out and come to blows, it was settled, as early as 1503, that those falling out are guilty of an affray, and that no guilt attaches to the other persons attending the assembly.1

Footnote 1: 1

## 2 Offences cognate to Treason 327

of strangers to the meeting, will not make the meeting an unlawful assembly.1

Footnote 1: Dicy, Law of the Constitution (7th ed.) 500-504.

The suggestion that a meeting is an unlawful assembly, if it meets with intent to incite disafflection to the government as by law established, does not seem to have been made in England till nearly the middle of the nineteenth century.2 Generally, it would seem, the members of such an assembly would be indictable for conspiracy; but, as Dicey suggests, they might be indicted for this offence "if the circumstances of the time were such that the seditious proceedings at the meeting would be likely to endanger the public peace."3

Footnote 2: 4: Any meeting of her Majesty's subjets which a party procures to assemble for the purpose of addressing a seditious speech ... a meeting called for that purpose and used for that purpose is an unlawful meeting," R, v. Ernest Jones (r848) 6 S.T.N.S. at p. 816 _for_ Wilde, C.J.; a similar ruling by the same judge was given in R, v. Fussell (r848) ibid at p. 764.

Footnote 3: Law of the Constitution (7th ed.) 500 n, 1.

The growth of the law as to the offence of unlawful assembly has thus been a comparatively late development. We may perhaps find a reason for this in the history of that aspect of the law as to riot with which I am about to deal.

(ii) The relation between the repeal of the earlier legislation on the subject of riot to the distinction between riot and treason.

We have seen that a statute of r549-504 provided that, if twelve or more persons assembled together to make a riot with the object of killing or imprisoning a Priy Councilor, or of unlawfully altering the laws established by Parliament; and if they remained together for one hour after a summons to disperse, all so remaining should be guilty of treason; and the same provision was made for assemblies of forty persons or more, who remained together for two hours and upwards, for purpose of committing certain other traitorous rebellious or felonious acts. It was also provided that those taking part in certain other riotous assemblies, and not dispersing after due notice, should be guilty of felony; and that those who summoned, procured, moved, or stirred any such assemblies should be guilty of the same offence. We have seen that in r5535 the offences which were made treason under this Act were reduced to felony; that this enactment was renewed in r558;6 and that it remained in force till the end of Elizabeth's reign, when it expired.7

Footnote 3: 3, 4 Edward VI. C. 5; vol. iv 497.

Footnote 4: I Elizabeth c. 16.

It is clear that these Acts hit most cases of riot and unlawful assembly. While they were in force, therefore, there was not much need to invoke the assistance of the common law. Moroever, any other cases could be and generally were dealt with by the Star

### Crime and Tort

Chamber. When these Acts expired, political conditions made it very unlikely that Parliament would pass any Act giving to the crown powers which might easily be used against its political opponents ; and the Star Chamber was fully competent to deal with any ordinary case of riot or unlawful assembly. But at the Restoration the courts were faced with a new set of political conditions. The Star Chamber had been abolished, and the courts were therefore obliged to use their common law powers. It was no doubt because their powers were inadequate, that we see in this period a development of the constructive extension of the clause of Edward III.'s statute of treasons, which made the levying of war against the king treason.1 Fo: if a riot could be brought within the sphere of treason, not only was the punishment much more severe, but also, as we shall see,2 the common law powers of magistrates soldiers and others to suppress it were greater. But the consideration of these cases necessarily involved a closer definition of the essential features of the offence of riot. And it is therefore, in this period, that the modern definition of this offence is ascertained. In the first place, the object of the riot must be merely a private object. " A recovers possession against B of a house etc. in a real action or in an ejectione firme, and a writ of seisin or possession goes to the sheriff. B holds his house against the sheriff, with force, and assembles persons with weapons for that purpose, who keep the house with a strong hand against the sheriff, tho' assisted with the posse comitatus. This is no treason either in B or his accomplices, but only a great riot and misdemeanour." 3 In the second place, if the aspect of the assembly was not warlike, it could only be a riotous assembly, and its acts of violence could only amount to a riot. To make the acts of a riotous assembly treasonable, " it must be such an assembly as carries with it speciem belli, as if they ride or march vexilis explicatis, or if they be formed into companies, or furnished with military officers, or if they are armed with military weapons, ... and are so circumstanced that it may reasonably be concluded they are in a posture of war, which circumstances are so various, that it is hard to define them all particularly." 4

Footnote 1: Above 319-320, 2 Below 330-331, 2 Hale, P.C. i 146, 4 Ibid r50, 4 Above 319-320, 6 I George I, st, z c 5 ; Bl, Comm, iv 143.

It is clear from this passage that the line between a mere riot and a constructive levying of war was fine. As we have seen, it caused differences of judicial opinion; 5 and as, in many cases, the penalty was out of all proportion to the offence with which individual rioters were charged, it shocked the public conscience. It was for this reason that in 17146 the present Riot Act was passed, which re-enacted in a modified form the provisions of the

## 5 Offences cognate to Treason 329

Acts which had been in force during Mary and Elizabeth's reigns ; and we have seen that it was due tc this enactment that the government generally avoided recourse to this species of constructive treason \[1\]. This statute in effect provides that, if twelve or more persons are unlawfully assembled to the disturbance of the peace, and a mayor, sheriff, or justice of the peace command them to disperse, and they continue together for one hour after such command, all so continuing are guilty of felony ; and those who afterwards disperse the assembly are indemnified for the consequences of any violence which they may employ.

This Act has generally been found sufficient to deal with unlawful assemblies, the demeanour of which is obviously threatening, and with actual riots. It was the large increase in meetings held to advocate public objects, which occurred at the end of the eighteenth and the beginning of the nineteenth centuries, which has led to the development of the law as to unlawful assembly, which I have already noticed \[2\]. Their demeanour was generally not obviously threatening ; and they were not assembled with the direct object of committing a riot. In many cases, however, it was fairly clear that a riot might easily result from their meeting. But to them the provisions of the Riot Act were not immediately applicable ; and therefore they have caused not only a development of the law relating to unlawful assemblies, but also some reconsideration of the law as to powers of the authorities in dealing with these assemblies \[3\].

The liabilities of rioters, and the measures which may or ought to be taken for the suppression of riots, or the dispersal of unlawful assemblies.

The law as to the liability of rioters who, in the course of their riotous conduct, committed a felony, was strict and satisfactory. It was established, as early as Edward III.'s reign, that all were equally liable for the felony \[4\]. "Note also," says Dalton \[5\], "that if divers persons come in one company to do any unlawful thing, as to kill, rob or beat a man, or to commit a riot, or to do any other trespass, and one of them thereof kill a man, this shall be adjudged murder in them all, that are present of that party abetting him, and consenting to the act, or ready to aid him, altho' they did but look on.' Hale quotes this passage from Dalton with approval, and cites a case of 1675 in which this rule of law was restated \[6\]. But, if no felony was committed, the law was not equallysatisfactory. Each individual rioter was only liable for a misdemeanour, whatever damage he did; and thus the technical distinction between felony and misdemeanour tended sometimes to lighten unduly the liability of the rioters.

The same cause tended also to hamper the authorities in suppressing riots, or in dispersing unlawful assemblies; and to render the position of the ordinary citizen, who helped to suppress or disperse them, somewhat dubious. It was largely for this reason that the provisions of the Rio Act1 were needed. This will be clear if we look at the rules on this matter, some of which, though elaborated and extended in this period, originated in the Middle Ages.

Footnote 1: I George I. st. 2 c. 5.

In the sixteenth century every citizen was justified in taking all reasonable means to put a stop to breaches of the peace committed in his presence.2 He was therefore justified in intervening to help to suppress a riot or to disperse an unlawful assembly. But, if no felony had been committed, he could only use reasonable force for this purpose; and to-day8 as in the thirteenth century,4 he must at his peril hit the mean between excess and defect.5 On the other hand, if a felony has been committed, all the rioters are, as we have seen,6 guilty of felony; and it is the duty of every citizen to apprehend the felon.7 If, therefore, in such a case a rioter is killed in resisting apprehension, the homicide is justifiable.8 A fotiori, the same rule applies if some duly constituted officer of the law has raised the posses comitatus, or has called for assistance to suppress a riot or to disperse an unlawful assembly, and a private person goes to his help, and kills

## Offences cognate to Treason 331

a rioter who resists the attempt to apprehend him.1 And in this case it would seem that the homicide of those resisting dispersal or arrest would, prima facie at any rate, be justifiable, even though no felony had been committed.2

Footnote 1: Hale, P.C. i 495.

Footnote 2: \*\*'And it seems, as to this manner of killing rioters, that resist the ministers of justice in their apprehending, it is no other but what the common law allows, or at least what the statue of r3 H. 4 cap, 7 implicitly allows to two justices of the peace with the sheriff or undersheifif of the county, yy giving them power to raise the posse comitatus, if need be, and to arrest the rioters ... And it seems the same law is for the constable of a vill in case a riot happen within the vill," Hale, P.C. i 495; according to Marowe, Putnam, Oxford Studies, vii 33-339 the sheriff had, apart from this and other statutes, no power to call for assistance--"Quar per le comen ley null put commander les homez del conte de aler ove buy up est est cas forque le Roie tantum; quar cest commandement fut entendue une sequestracion de luere liberte."

Since an ordinary citizen might be made liable if he did not help to suppress a riot or disperse an unlawful assembly when called upon to do so, a fortiori an official could be made liable if he neglected this duty. And just as statutes had added to the powers of officials to take measures to arrest rioters,3 so other statutes had rendered them liable to special penalties if they failed in their duties.4 But these statutes only rendered more explicit the common law principles; and it is these principles upon which the modern common law rests.5 The erroneous idea that the Riot Act had somehow modified these principles, led to the failure of the authorities to check the Lord George Gordon riots in their initial stage, and to the authoritative correction of this error.6

Footnote 3: **'A Edward III. c. r; 17 Richard II. c, 8; r3 Henry IV. c. 7; Hawkins, P.C. Bk. i c. 65 SS5-29.**

Footnote 4: r3 Henry IV. c. 7; 2 Henry V. c. 8; r9 Henry VII. c. 13.\*\*

Footnote 5: See Tindal C.J.'s charge to the grand jury at the opening of the special commission to try the Bristol riors in r332, 3 S.T.N.S. 4-6.

Footnote 6: **'Kenny, Criminal Law 335.**

The development of the law of treason during this period, and of offences cognate thereto, represents the contribution made by the common law to the maintenance of the authority of the state and its law. Professor Kenny has said that the severity of the law on these matters was largely due to the inadequacy of its powers for the prevention of crime--an inadequacy which was due to the absence of efficient police. " The law felt its parish constabulary to be comparatively powerless to prevent any offence that involved the presence of a plurality of offenders. It consequently attempted to supply the defect by very comprehensive prohibitions of all such crimes."7 This is true, but not I think the whole truth. It explains, I think, the rules which have just been discussed as to the measures which may or ought to be taken by officials and others for the suppression of riots; and, tosome small extent, it perhaps explains the severity of the rules as to these and other offences cognate to treason. But, it seems to me, the severity of these rules admits not merely of explanation, but of a justification, which is as much applicable to the present age as to the age in which they were evolved.

However efficient the police system may be, a neglect to deal severely with these and the like offences of a seditious kind will speedily undermine the authority of the state and the law ; and, as the history of the criminal law in this period shows, firm measures of suppression will, even in the absence of an adequate police system, vastly diminish their power for evil. More really depends on the spirit which animates the rulers of the state than upon the material means of coercion at their disposal. If a state allows its subjects too large a freedom to express opinions directly hostile to its authority, and too large a power to combine ; and, if, in addition, it puts the most formidable of these combinations above the law ; it will soon sink back to the condition in which the English state found itself at the time of the Wars of the Roses. It will soon find that its authority is small in comparison with that of its over nighty subjects, and that the duty of allegiance to it is held to be of small account, when it conflicts with the allegiance exacted by these usurpers of its authority.

In fact, the history of the law of treason and of the offences cognate thereto, shows that the creation and preservation of a law-abiding instinct is as difficult to maintain as it is easy to undermine. This work can only be successfully accomplished by a firm, a far seeing, and an intelligent administration of the rules designed to safeguard the state against those who attempt, from whatever motives, to set up rivals to its authority,--an administration of these rules which, on adequata grounds, is not afraid to be cruel. As I have already pointed out,1 the more firmly the law is administered on these lines, the less need there will be for cruelty ; for the state will cease to fear its criminals, and will consequently feel itself able to be generous. It was largely due to the fact that the criminal law was administered on these lines during these two centuries, that, at the end of this period, the state and its law had emerged supreme. It is true that all through this period lawlessness was rampant. But the measure of the success which had been achieved in dealing with this lawlessness, and especially with lawlessness of the seditious variety, can be best measured by the contrast between the state of England in 1500 with its state in 1700. At the latter date life and property were far more secure, and the foundations of the future commercial prosperity of the country had been laid.

**DEFAMATION**

That this result had been attained was also due to the fact that the common law had been careful to guard against many other offences, which were almost as much cognate to treason as those which have just been described. We shall see in the ensuing sections that its rules as to the treatment of seditious speeches and writings, as to conspiracy, and, to some extent, the rules which imposed legal disabilities upon religious nonconformists, all helped towards the attainment of this result ; for they all helped to form a consistent public opinion upon such fundamental matters as the sanctity of the law, the protection of property, and the sacredness of contract. Both the experience of the Commonwealth period, and the experience of our own days, prove that the unlimited tolerance of all opinions tends to undermine all these fundamental principles upon which the stability of the state, and, therefore, of civilization itself, depend.

## 2. Defamation .

The wrong of defamation is sometimes a crime pure and simple, sometimes a tort pure and simple, and sometimes it can be treated either as a crime or a tort at the option of the injured person. Defamation is a crime when it consists of the publication seditious obscene or blasphemous speeches, or the publication of of seditious obscene or blasphemous writings, or the utterance of writings or the utterance of speeches which directly incite to a breach of the peace. Defamation is a tort when it consists of the publication of writings, or the utterance of speeches, which hold another person up to hatred content or ridicule, provided, in the case of speeches, special damage can be proved or is presumed. Defamation can be treated either as a crime or tort at the option of the injured person, if it consists of the publication of writings which hold him up to hatred content or ridicule.1

Footnote 1: Kenny, Criminal Law 305-314.

There is nothing anomalous in the fact that defamation is thus treated sometimes as a crime, sometimes as a tort, and sometimes as either a crime or a tort; for it is obvious that defamatory writings or speeches may, according to their contents, either (i) affect the stability or the peace of the state or the morals of its subjects, or (ii) cause loss of reputation or pecuniary loss to an individual, or (iii) be both dangerous to the peace of the state and harmful to an individual. In Roman law some forms of defamation could be regarded either as delicts or as crimes ;2 and, if no

### Crime and Tort

specific person was defamed, the defamation could only be criminally prosecuted.1 Nor is there anything anomalous in the manner in which English law treats seditious obscene or blasphemous writings or speeches, or writings or speeches which directly incite to breaches of the peace. What is anomalous is the manner in which it treats defamation, when it consists of writings or speeches which hold up another person to hatred contempt or ridicule. In this part of the law a sharp line is drawn between written and spoker defamation, which puts them into two very different categories Other systems of law sometimes provide that the penalty shall be increased if the defamation is written.9 No other system treats what is essentially the same offence in two essentially different ways.

Footnote 1: "Quad senatus-consultum necessarium est, cum nomen adjectum non est ejus, in quem factum est: tunc ei, quia difficilis probatio est, voluit senatus publica quaestione rem vindicari. Cetermum si nomen adjectum est, et jure communi injurarium agi poteri! nec enim probibendus est pivato agre judicio, quod publico judicialo pracjudicatur, quia ad privatura causam petinet," Dig. 47. to 6; cp. Code g. 36.

Footnote 2: "See e.g. the provisions of the German law cited L.Q.R. x 160; and the Scotch law follows the same rule, ibid 161.

Footnote 3: "Veder, The History of Defamaion, Essays, A.A.L.H. iii 446.

Footnote 4: "Below 351:352.

Footnote 5: Below 352.

Footnote 6: "Vol, ii 360, 382-383; vol, iii 409-411; vol, v 205-212.

Footnote 7: "Vol, ii 382 n. ii.

In English law the written defamation of another is a libel which is actionable per se, and can be treated at the option of the injured person as either a crime or a tort. On the other hand, spoken defamation of another can only be a tort, and will only be a tort if the words fall into a limited class of cases in which words are actionable per se, or if they cause temporal loss. The result is, as it has been well said, " absurd in theory, and very often mischievous in its practical operation."3 It is only partially remedied by the growth of the specific tort of slander of title,4 and of the analogous tort of maliciously uttering falsehoods which damage a plaintiff's business.8 It is clear that this anomalous state of the law can only be explained by the history of the way in which the law on this, and other branches of the law of defamation, has grown up.

Footnote 4: "See e.g. the provisions of the German law cited L.Q.R. x 160; and the Scotch law follows the same rule, ibid 161.

Some of the leading principles and characteristics of the modern law of defamation began to take shape during the last half of the seventeenth century. The shape which they took is the product of the earlier development of this branch of the law. Of that earlier development 1 have already said something.6 But in order to understand its modern development, a brief recapitulation is necessary.

Footnote 3: "Veder, The History of Defamaion, Essays, A.A.L.H. iii 446.

Footnote 4: "Below 351:352.

Footnote 6: "Below 352.

Footnote 6: "Vol, ii 360, 382-383; vol, iii 409-411; vol, v 205-212.

Footnote 7: "Vol, ii 382 n. ii.

## 12 Deformation

races,1 like the primitive code of the Twelve Tables,2 punished defamatory words; and in later days the manorial and other local courts gave remedies for this offence.3 But the provisions of the Anglo-Saxon laws on this matter have no continuous history; and the jurisdiction of the manorial and other local courts decayed. Unless the defamation was of a sort which came within the statutes which created the offence of scandalum magnatum,4 the medieval common law gave no remedy. For all other defamation the suitor was obliged to go to the ecclesiastical courts. It was not till the beginning of the sixteenth century that the common - law courts began to compete with the ecclesiastical courts in this field of jurisdiction, by allowing an action on the case for defamation.5 As usually happened when the common law courts and the ecclesiastical courts came into conflict, the common law courts soon deprived the ecclesiastical courts of the greater part of their jurisdiction. This was due partly to the fact that the common law courts prohibited the ecclesiastical courts from entertaining any suit for defamation, unless the defamatory words had charged the plaintiff with some offence of exclusively ecclesiastical cognisance; and partly to the popularity of the common law remedy of damages, as compared with the merely ecclesiastical penalty which the ecclesiastical courts could inflict.6 In fact, so popular was the common law remedy, that the common law courts found themselves obliged to take measures to diminish the flood of litigation which threatened to overwhelm them.7

Footnote 1: "Even the rude Lex Salica decrees that if one calls a man ' wolf' or * hare' one must pay him three shillings, while if one calls a woman ' harlot,' and cannot prove the truth of the charge, one must pay her forty-five shillings. ... In the Norman custumal it is written that the man who has falsely called another 'thief' or ' man-slayer' must pay damages, and, holding his nose with his fingers, must publicly confess himself a liar,' P. and M. ii 536.

Footnote 2: "Nostrae contra xi tab, cum peneucas res capite sanvissent, in his hanc quoque sancidam putaverunt: si quis occuractivsset sive carmen condidisset, quod infami faceter figatiumve alteri," Cicero De Rep. iv to, iz.

Footnote 3: Vol. ii 38z-383. * Vol. iii 409-410. * Ibid 411 ; vol. v 205-208, * Ibid 200. * Ibid 353 seqq. * Torts (izth ed.) 324.

Since the common law remedy was an action on the case, damage was the gist of the action And damage was construed in a narrow proprietary sense. As Sir F. Pollock has said,8 " the law went wrong from the beginning in making the damage and not the insult the cause of the action." But this defect was inherent in the form of action by which alone redress could be given; and there is no doubt that the inherent defect of this way of looking at this wrong was aggravated by the measures which the courts took to stem this tide o: litigation. We shall see that, in order to discourage litigants, they insisted on construing words, whenever possible, as innocent; and that, in their endeavours to give them a "mitior sensus," they construed them with the same

### Crime and Tort

strictness as they were accustomed to construe writs or pleadings, with results which were often absurd and sometimes unjust.1

But, while the development of the tort of defamation was thus being warped by the action of the common law courts, a wholly new conception of this offence was being developed in the court of Star Chamber. We have seen that the Council and the Star Chamber had, in the interests of the peace and security of the state, assumed a strict control over the press.2 Naturally the Star Chamber assumed jurisdiction in all cases in which its rules on this matter had been infringed; and this led it to regard defamation as a crime. Borrowing perhaps from the Roman law as to Libella Fannosa,3 it treated libels both upon officials and private persons as crimes. The former were seditious libels, and directly affected the security of the state. The latter obviously led to breaches of the peace. On the same principle it dealt with seditious words.4 But we have seen that in this case its practice was not always consistent; for, at any rate in the case of words which were not seditious, thei: truth was allowed to be pleaded as a defence--a defence which is, as we have seen, wholly out of place if defamation is regarded as a crime.6

Footnote 1: Below 355-356; vol. v 206,

Footnote 2: Ibid 211. 5 Ibid 211-212,

Footnote 3: Vol. v 208,

When the Star Chamber was abolished, the law of defamation thus consisted of two very divergent parts. In the first place, there was the body of law developed in the Star Chamber, which regarded defamation as a crime; and, in the second place, there was the body of law developed round the common law action on the case, which regarded defamation as a tort. The common law judges after the Restoration took over the law as developed by the Star Chamber, and further developed it on similar lines. They also further developed the conception of the tort of defamation. Naturally these cognate bodies of law, being developed by the same tribunals, exercised a reciprocal influence on one another; and our modern law is the result. The history of its construction during this period I shall trace under the two heads of Defamation as a Crime, and Defamaton as a Tort.

### Defamation as a Crime

The two main varieties of the crime of defamation were distinguished by Coke in the case _De Libellis Fannosa.6_ It can be committed either against a private person, or against a magistrate or other public person; and the latter is the much more serious offence, " for it concerns not only the breach of the peace but the scandal of Government." The first variety can be quickly

## 13 Deformation as a crime 337

disposed of. It was defined by the common law courts and punished, just as the Star Chamber had defined and punished it.1 The chief addition made by the common law courts to the earlier law was the definite settlement of the rule, foreshadowed in the earlier law,2 that mere spoken words defamatory to a private person cannot be treated as a crime.3 We shall see that this decision is important in the history of defamation as a tort; for it probably had a good deal to do with creating the unfortunate distinction between the torts of libel and slander.4 It is the second variety of libels which is the most important, and it is the law as to these libels which was the most developed during this period. Naturally, as we shall see, some of the principles thus developed helped to elucidate some of the incidents of the first variety of the crime of libel.

Footnote 1: See R. v. Beare (t699) r Ld. Raym. 44; S.C. 2 Salk. 417.

Footnote 2: Vol. v 211-212, 3 R. v. Penny (t697) r Ld. Raym. 153.

Footnote 4: Below 364.

Footnote 7: R. v. Read (t708) Fortscue 98; in that case Powell, J., said, "this is for printing badly stuff, but reflects on no person, and a libel must be against some particular person or persons, or against the Government. It is stuff not fit to be mentioned publicly; if there should be no remedy in the Spiritual Court, it does not follow there must be a remedy here. There is no law to punish it, I wish there were, but we cannot make law."

The crime of publishing defamatory statements against the government falls under several heads. It may be committed by publishing seditious writings or by speaking seditious words, or by publishing blasphemous or obscene writings, or by speaking blasphemous or obscene words, or by uttering words which incite directly to a breach of the peace.5

Footnote 5: I727) 2 Stra. 788; cp. R. v. Hicklin (t868) L.R. 3 Q.B. 36o.

With the history of the law as to blasphemous writings and speeches I shall deal later.6 With regard to obscene writings and speeches, Holt, C.J., seemed to think that this was matter for the ecclesiastical courts, and was not remediable by indictment;7 but a few years later this opinion was reversed, and the law was placed on its modern basis by the decision in \_R. v. Curl.\_8 With regard to words which tend to a breach of the peace, Holt, C.J., ruled in \_R. v. Langley_9 that "words that directly tend to breach of the peace may be indictable; but otherwise to encourage indictments for words would make them as uncertain as actions for words are."10 It is the history of the law as to seditious writings and words which is the most important. The history of the manner in which it was shaped by the common law courts, after they had taken over this jurisdiction from the Star Chamber, I must now relate.

Footnote 7: R. v. Read (t708) Fortscue 98; in that case Powell, J., said, "this is for printing badly stuff, but reflects on no person, and a libel must be against some particular person or persons, or against the Government. It is stuff not fit to be mentioned publicly; if there should be no remedy in the Spiritual Court, it does not follow there must be a remedy here. There is no law to punish it, I wish there were, but we cannot make law."

Footnote 8: (t727) 2 Stra. 788; cp. R. v. Hicklin (t868) L.R. 3 Q.B. 36o.

Footnote 9: (t704) 6 Mod. r24.

Footnote 10: Ibid at p. t25.

Stephen has pointed out 11 that the view which the law takes

### Crime and tort

of the offence of publishing seditious writings or uttering seditious words, will depend upon the view held as to the relation of rulers to their subjects. "Two different views may be taken of the relation between rulers and their subjects. If the ruler is regarded as the superior of the subject, as being by the nature of his position presumably wise and good . it must necessarily follow that it is wrong to ensure him openly, that even if he is mistaken his mistakes should be pointed out: with the utmost respect, and that whether mistaken or not, no censure should be cast upon him likely or designed to diminish his authority. If, on the other hand, the ruler is regarded as the agent and servant, and the subject as the wise and good master, who is obliged to delegate his power to the so-called ruler . it is obvious that this sentiment must be reversed. Every member of the public who censures the ruler for the time being exercises in his own person the right which belongs to the whole of which he forms part. He is finding fault with a servant. To those who hold this view fully, and carry it out to all its consequences, there can be no such offence as sedition. There may indeed be breaches of the peace which may destroy or endanger life limb or property, and there may be incitements to such offences. But no imaginable censure of the government, short of a censure which has an immediate tendency to produce such a breach of the peace, ought to be regarded as criminal." The first of these two views was the accepted view in the seventeenth century. The second was gathering strength during the latter part of the eighteenth century, and is now the accepted view.1 It is the history of the development of the law under the influence of the first of these views that I must here describe. The modifications effected by the growth of the second will be dealt with in a subsequent Book of this History.

Footnote 1: R, v. Lovett (1839) 9 C, and P. at p. 466 _fer_ Littledale, J.; R, v. Sullivan (1868) 11 Cox C.C, at p. 58.

We have seen that both the rules relating to the censorship of the press,2 and the manner in which the Star Chamber administered the law of defamation,3 show that, during this period, the first of these two views was that taken by the law. After the Restoration the principles upon which the Star Chamber had acted were taken over by the common law courts ; and it was inevitable that this should be so. We have seen that statutory force had been given to a set of rules for the regulation of the press, which were in substance not dissimilar to those which had been made by the Star Chamber.4 The principles applied by the Star Chamber to seditious writings had been embodied by

## 1 Deformation as a crime 339

Coke in the case _De Libellis Fanniss_ \[1\]; and he had affirmed that these offences could be punished either by indictment at common law or by proceedings in the Star Chamber \[2\]. The view held by the king and the judges as to the relation between rulers and their subjects, were the same as those held by the king and his judges in the earlier part of the century. Hence we find that the judges accepted the rules that truth was no defence to an indictment \[3\], that publication was not necessary \[4\]; and that the death of the person libelled was not necessarily \[5\]; a bar to a prosecution \[5\]. They also accepted the rules that the contriver the procurer and the publisher were all equally guilty \[6\]; and Holt, C.J. made it quite clear that both the writing and the copying of a libel, without just cause or excuse, amounted to the contriving of a libel \[7\]. Similarly, the common law courts had shown, in the earlier part of the seventeenth century, that they were prepared to follow the lead of the Star Chamber \[8\], and treat seditious words in substantially the same manner as seditious writings. Part of the charge against Eliot Hlles and Valentine was the uttering of seditious words \[9\]; and other cases show that the common law courts treated as criminal seditious words not only against the king \[10\], but also against his government \[11\], the judges \[12\], or the established church \[13\].

### 1 (1606) 5 Co. Rep. Izga.

At ff. Izga, Izgb.

### Crime and Tort1

That this view of the criminality of seditious words was comparatively new law, derived from the practice of the Star Chamber, is probable from a case of 1558, in which it was held that slander spoken of the queen was punishable under Edward I.'s statute of scandalum magnatum.1 However that may be, it is clear that the offence of uttering seditious words was definitely recognised to be a misdemeanour, punishable by the common law courts, in the earlier part of the seventeenth century; and it is fairly clear that, as in the case of publishing seditious writings, this broad rule was derived from the practice of the Star Chamber.

Footnote 1: Oldnoll's Case, Dyer 155a; for this offence see vol. iii 409-410.

It follows, therefore, that the offence was defined as widely by the common law courts as by the court of Star Chamber. This is abundantly clear, both from the resolutions of the judges, and from the numerous cases of "setitious libel" which came before the courts in the latter part of the seventeenth century. Thus in 1663 it was resolved2 that "tho" printing be a trade, and selling of books also, they must use their trade according to law, and not abuse it, by printing and selling of books scandalous to the Government or tending to sedition." Later in the reign the judges made use of the Licensing Acts3 to sharpen the edge of the law. They resolved that it was illegal to publish anything whatever without authority, even though it was not scandalous to the government. It was therefore doubly illegal if that which was published was scandalous. The law was laid down in this way by Scroggs, C.J., in _R. v. Carr_,4 and _R. v. Harris5;_ and Stephen points out that, though the House of Commons impeached Scroggs for many illegal and arbitrary acts, it did not allege that this statement of the law was wrong.6 This view of the law was applied in the case of _R. v. Barnardiston_,7 who was sentenced "to a monstrous fine of _$10,000_ for the mere expression of political opinions to a private friend in a private letter ";8 in the case of _R. v. Baxter_,9 who was thought in his paraphrase of the New Testament to have reflected upon the bishops of the church of England; in the case of _R. v. Johnson_,10 who issued an address to the Protestants in the army not

## 1 Deformation as a Crime 341

to assist Papists illegally enlisted and commissioned; and in the case of _The Seven Bishops_,1 who were put on their trial for asserting that the king's declaration of indulgence was illegal, because it was based on a prerogative to suspend laws which did not exist. These cases are a few illustrations,2 and some are very extreme illustrations, of the prevailing theory that a person who questioned the legality or the policy of any act of the government, even in a respectful manner, committed the offence of seditious libel. The law was severely and brutally applied, especially by Jeffreys, but it is difficult to say; in the then state of the law, that these decisions were wrong.3

Footnote 1: (t688) tz S.T. 183.

Footnote 2: "The great frequency of prosecutions for political libels and seditious words at this time appears ... from a passage in Luukell's Dixay for the year 1684, which enumerates sixteen trials for those ofences between April 30 and November 28 in that year," Stephen, H.C.L. ii 313.

Footnote 3: Ibid ii 313-315. ${}^{\\star}$Vol, vi 375. ${}^{\\star}$(1704) i4 S.T., at p. 1128.

The expiration of the Licensing Act in 1694 made it impossible to say that the mere publication of a writing without authority was illegal. But neither the expiration of that Act, nor the Revolution, materially altered the law as to what constituted a seditious libel. This is clear from the ruling of Holt, C.J., in \_R. v. Tutchin:\_5 " they say nothing is a libel but what reflects upon some particular person. But this is a very strange doctrine to say it is not a libel reflecting on the government, endeavouring to possess the people that the government is maladmiristered by corrupt persons, that are employed in such or such stations either in the navy or army. To say that corrupt officers are appointed to administer affairs is certainly a reflection on the government. If people should not be called to account for possessing the people with an ill opinion of the government, no government can subsist. For it is very necessary for all governments that the people should have a good opinion of it. And nothing can be worse to any government than to endeavour to procure animosities as to the management of it; this has always been looked upon as a crime, and no government can be safe without it."

Footnote 3: ${}^{\\star}$The great frequency of prosecutions for political libels and seditious words at this time appears ... from a passage in Luukell's Dixay for the year 1684, which enumerates sixteen trials for those ofences between April 30 and November 28 in that year," Stephen, H.C.L. ii 313.

It would seem to follow from this view of the nature of seditious libel that the crime of seditious libel was the intentional publication of a writing which reflected on the government; and, similarly, that the crime of libel committed against a private person was the intentional publication of a writing which held him up to hatred contempt or ridicule. But when criminal proceedings were taken for libel, it was always alleged that the accused had published the libel with a whole series of the worst intentions. He was said to have acted falsely, seditiously, maliciously, and factiously. As Stephen has said, "round full mo

### Crime and Tort

offence to the government was thought natural and proper";1 and, as we can see from the indictments for other offences, and even from the declarations in civil actions, it was customary, wherever an accusation of any sort of wrong was made, to exhibit the defendant's conduct in the worst possible light. Naturally the use of these common forms tended to give rise to the view that the crime was, not so much the intentional publication of matter bearing the seditious or defamatory meaning alleged by the prosecution, as its publication with a sediticus or malicious intent. This view of the nature of libel regarded as a criminal offence begins to appear in the eighteenth century; and it has had a large influence on its history. We shall see later, that it has reacted on the views held as to the nature of libel considered as a tort; and that the idea that a malicious intent is a necessary ingredient, both in the crime and in the tort of defamation, has not been finally got rid of till the nineteenth century.2 The reasons for its appearance we must now consider.

Footnote 1: H.C.L. ii 354- Below 373-375.

In the earlier part of the seventeenth century, when the crime of libel, and especially of seditious libel, was chiefly dealt with by the court of Star Chamber, the question whether the offence consisted of intentionally publishing a seditious or a defamatory writing, or whether it consisted of intentionally publishing such writings with a seditious or a malicious intent, was academic. It was academic because the court decided all questions both of fact and of law. If the offence consisted of intentionally publishing a writing with the seditious or defamatory meaning alleged by the prosecution, it decided the questions whether the writing had been intentionally published and whether it meant what the prosecution alleged that it meant, which were questions of fact; and it decided whether what was so published was seditious, defamatory or otherwise malicious, and sc a libel, which was a question of law. Similarly, if the offence consisted of intentionally publishing such a writing with a seditious or a malicious intent, it decided as questions of fact both whether such a writing had been intentionally published with this seditious cr malicious intent, and whether it meant what the prosecution alleged that it meant; and, as a question of law, whether such a writing published with that intent was in law a libel.

But when the jurisdiction over these libels was taken over by the courts of common law, the question ceased to be academic. The courts of common law worked with a jury; and that involved an accurate delimitation of the spheres of fact and law. If the essence of libel was the publicaion with a seditious defamatory or otherwise malicious intent, the finding of that intent was matter of

## 6 Deformation as a Crime 343

fact for the jury. If, on the other hand, its essence was the intentional publication of the document set out in the indictment, all that the jury was concerned with was the fact of such publication, and the question whether it bore the seditious or defamatory meaning alleged by the prosecution 1 Now it is obvious that if the malicious intent was an essential ingredient in the offence, and if, therefore, this was a question for the jury, the jury would have far larger powers than if they were required to decide only the question of intentional publication of a document with the meaning alleged in the indictment. As all these cases of seditious libels were regarded as matters nearly affecting the state, and as, after the decision in _Rushed1P's Case_,2 the control of the government over the judges 3 was far closer than its control over juries, it is not surprising that the courts should have laid it down that the malicious intent was not an essential ingredient in the offence, but that the offence consisted of the intentional publication of a document with the seditious or defamatory meaning alleged by the prosecution. It followed that the function of the jury was limited to finding these two sets of facts ; and that it was for the court to say as a matter of law whether a writing published with this seditious or defamatory meaning was a libel.

Footnote 1: Stephen, H.C.L. ii 350 seqq.

Footnote 2: Vol. vi 503-51i.

Footnote 3: The punctuation has been amended,

Thus in the case of _R. v. Carr_' Scroggs, C.J., directed the jury that, if they found that theaccused had published the book, they must find him guilty. " If you find him guilty and say what he is guilty of, we will judge whether the thing imports malice or not. Sir Francis Winnington hath told you there are some things that do necessarily imply malice in them. If this thing both not imply it, then the judges will go according , to sentence, if it both ;3 so that it concerns not you one farthing, whether malicious or not malicious--that is plain." 6 The same ruling was given, even more plainly, in the case of _R. v. Barnardiston_. It was argued that, as there was no evidence of malice in the publication of the writing, the accused was entitled to be acquitted. To that the reply was given that malice cannot be proved by direct evidence ; but that, just as a killing without provocation proved that the killing was with malice afore thought, so the publication of a seditious writing proved the malicious intent. "In case any person both write libels, or publish any expressions which in themselves carry sedition and faction and ill will towards the government, I cannot tell well how to express it otherwise in his accusation than by such words that he did it seditiously factiously and maliciously. And the proof of the thing itself proves the evil mind it was done

### Crinie and Tort

with. If then, gentlemen, you believe the defendant, Sir Samuel Barnardiston, did write and publish these letters, that is proof enough of the words maliciously, seditously and factiously laid in the information."1 No doubt in the _Case of the Seven Bishops_ the malicious and seditious intent of the writing was left to the jury. But we have seen that in that case all the legal talent of the day was enlisted on the side of the bishops. The bar was altogether too much for a bench of judges approved by James II.;2 so that, as Stephen says, "it is impossible to appeal to that case as a precedent for any legal proposition whatever."3 It is true also that in the case of \_R. v. Tutchin_4 some expressions used by Holt, C.J., may be taken to mean that the intention with which the writing was composed was to be left to the jury.5 But probably Stephen and Lord Mansfield, C.J., are right in thinking that his words do not bear this construction, and that he meant to lay down the law substantially as it had been laid down in the seventeenth century.6 At any rate this was the the sense in which the law was understood by Raymond, C.J. In the case of _R. v. Francklin_ 7 he said, "in this information for libel there are three things to be considered, whereof two by you the jury, and one by the court. The first thing under your consideration is whether the defendant Mr. Francklin is guilty of the publication of this Craftsman or not? The second is, whether the expressions in that letter refer to his present majesty and his principal officers and ministers of state, and are applicable to them o: not? But then there is a third thing, to wit, whether those defamatory expressions amount to a libel or not? This does not belong to the office of the jury, but to the office of the Court; because it is a matter of law, and not of fact; ... and there is redrass to be had at another place if

**DEFAMATION AS A CIME**

either of the parties are not satisfied; for we are not to invade one another's province, as is now of late a notion among some people who ought to know better."

Down to the beginning of the eighteenth century, therefore, the essence of a libel was the intentional publication of a document, bearing the seditious or defamatory meaning alleged by the prosecution. It followed that all the jury had to do was to find the fact of publication of a document bearing the meaning alleged by the prosecution; and that it was for the court to say, as a matter of law, whether what was published was seditious, defamatory, or otherwise malicious and so a libel. This state of the law harmonised admirably with the current views as to the relations of rulers to their subjects. But, when those views changed, it gradually came to be wholly out of touch with current public opinion. The law as to what amounted to a seditious libel, having been formed in the period when the ruler was regarded as the superior of his subjects, assorted badly with the new view that he was their agent or servant. Therefore the desire for greater freedom of speech than the existing law allowed, took the technical form of the contention that the seditious, defamatory or otherwise malicious intention with which a libel was published, was the essence of the offence, and so a matter of fact for the jury. In support of this contention much was made of the fact that the jury were told to find a general verdict of guilty, when, according to the then received view of the nature of a libel, their finding amounted merely to a special verdict that a certain writing with a certain meaning had been published by the accused, which might be ruled to be perfectly innocent.1 The concluding sentence from the passage in Raymond, C.J.'s, summing up in _R. v. Francktin_ cited above, shows that at that date this contention was beginning to be advanced. The eloquence and ability with which Erskine advocated it later in the century, produced a statutory change in the law,2 which has had great effects on the law of libel whether considered as a crime or as a tort.3 But these developments and their effects upon the modern law belong, as I have said, to the legal history of the eighteenth century.

### Crime and Tort

On other questions connected with libel considered as a crime there is as yet but little authority. We hear little, for instance, of the defence of privilege. That is a topic which will, as we shall see,1 be developed mainly in connection with defamation considered as a tort. Similarly, though it was quite clear that the words or writing complained of must be set out in the indictment or information, together with any innuendoes necessary to explain their meaning, it was chiefly in connection with the tort that the learning as to the function of the innuendo was developed.2 On both these matters rules were evolved which were later applied to some or all forms of the criminal offence. On the other hand, some of the rules evolved in the criminal cases have had an equally great influence on the development of the tort. But the reciprocal influence of defaration regarded as a crime, and defamation regarded as a tort, we shall be better able to appreciate when we have examined the history of this latter aspect.

Footnote 1: Below 375-377.

_Defamation as a tort_

Two sets of influences have gone to the making of our modern torts of written defamation (libel), and spoken defamation (slander). Firstly, the rules evolved by the working of the common law action on the case for defamatory words and writings; and secondly, the rules applied by the judges, after the Restoration, to written as distinct from spoken defamation. To the first of these influences we can trace a large number of the principal rules common to both libel and slander; to the second, the original elaboration of the unfortunate distinction between these two closely allied torts. In tracing their history I shall deal with (1) the early history of the common law action for defamation; (2) the origin of the difference between libel and slander; and (3) the origin of some of the essential characteristics of the torts of libel and slander.

(1) The early history of the common law action for defamation.

I shall consider this subject under the two following heads: (i) the nature and scope of the action; and (ii) the methods used by the common law judges in the seventeenth century to discourage this action, and their effects.

(i) _The nature and scope of the action._

Of this I have already said something. We have seen that, because the action was an action on the case, the damage not the

## 34 Deformation as a tort

**348**: **Criime and Tort**

from the period when the action on the case for words was being admitted into the common law; and it seems to have originated in the days when the courts were trying to distinguish the defamatory words which would be actionable in the common law courts, from those which were actionable only in the ecclesiastical courts. The test hit upon was contained in the question whether the offence charged was punishable in the common law courts or in the ecclesiastical courts, If one called another thief or traitor, the offence charged was punishable in the common law courts, and therefore an action for such defamation lay in those courts. If, on the other hand, one called another " heretic and one of the new learning," or adultercr, the offence charged was " mercly spiritual," and no action lay at common law. But if the offence charged was punishable by both laws, the plaintiff could bring his action in either jurisdiction.1 This case presupposes that words imputing a criminal offence are actionable; and it seems to me that, though the court was then merely trying to distinguish spheres of jurisdiction, and not the qualities which would make words actionable per se, it was probably the foundation of the long line of cases which decided that such words were thus actionable. Conversely, it was the origin of the rule that words imputing gross acts of immorality were not thus actionable, because such acts were only cognizable by the ecclesiastical courts--an injustice2 which has only partally been remedied by the Slander of Women Act of 1891.3

Footnote 1: Y.B. 27 Hy, VIII. Mich. pl. 4--see the passage cited vol. iii iii ii n. 2. The principle can, as is pointed out in American Law Rev. vi 593, be traced back to the rule, which is as old as Braxton, that the _accessionum_ must come under the same jurisdiction as the _frinchiale_, see a summary of this argument in Essays, A.A.L.H. iii 460 n; it should be noted that the modern rule that the criminal offence imputed must be one punishable corporally and not merely by fine (see Webb v. Beavan (r883) ir q,b.b. 609) is of later growth; no such distinction is drawn in the Y.B.--indeed it is not really consistent with the principle there laid down; and apparently it was held, in the sixteenth and early seventeenth centuries, that the mere fact that the offence charged was enquirable in the Leet was sufficient to make it actionable per se, Rolle, Ab. i 44 _Action sur Case_ H, pl. 8; but in r642 Bramston, C.J., and Mallet, J., Heath, J , dissenting, laid down the modern rule, March, Actions for Slaunder 59 ; the reason assigned for this limitation was that if the law were otherwise, " it would be a great occasion to increase and multiply actions for words."

Footnote 2: " He (Lord Campbell) laments the unsatisfactory state of our law according to which the imputation of words, however gross, on an occasion however public, upon the chastity of a modest matron or a price virgin, is not actionable without proof that it has actually produced special temporal damage to her. The only difference of opinion which I have with my noble and texxed offered is that instead of the word ' unsatisfactory', I should substitute the word 'barbarous,''' Lynch v. Knight (1861) 9 H.L.C. at p. 594 _de_ Lord Brougham.

Footnote 3: 54, 55 Victoria c. 54.

${}^{1}$ Y.B. 27 Hy, VIII. Mich. pl. 4--see the passage cited vol. iii iii ii n. 2. The principle can, as is pointed out in American Law Rev. vi 593, be traced back to the rule, which is as old as Braxton, that the _accessionum_ must come under the same jurisdiction as the _frinchiale_, see a summary of this argument in Essays, A.A.L.H. iii 460 n; it should be noted that the modern rule that the criminal offence imputed must be one punishable corporally and not merely by fine (see Webb v. Beavan (r883) ir q,b.b. 609) is of later growth; no such distinction is drawn in the Y.B.--indeed it is not really consistent with the principle there laid down; and apparently it was held, in the sixteenth and early seventeenth centuries, that the mere fact that the offence charged was enquirable in the Leet was sufficient to make it actionable per se, Rolle, Ab. i 44 _Action sur Case_ H, pl. 8; but in r642 Bramston, C.J., and Mallet, J., Heath, J , dissenting, laid down the modern rule, March, Actions for Slaunder 59 ; the reason assigned for this limitation was that if the law were otherwise, " it would be a great occasion to increase and multiply actions for words."

${}^{2}$ " He (Lord Campbell) laments the unsatisfactory state of our law according to which the imputation of words, however gross, on an occasion however public, upon the chastity of a modest matron or a price virgin, is not actionable without proof that it has actually produced special temporal damage to her. The only difference of opinion which I have with my noble and texxed offered is that instead of the word ' unsatisfactory', I should substitute the word 'barbarous,''' Lynch v. Knight (1861) 9 H.L.C. at p. 594 _de_ Lord Brougham.

${}^{3}$ 54, 55 Victoria c. 54.

## 34 Deformation as a Tort

suffering from leprosy, the plague,1 or syphilis--the accusation of having contracted the last mentioned disease being much the most common in the reports. It has been suggested that the inclusion in this category of the first two diseases, may have originated in the old rules which required the removal of a leper or a person suffering from the plague.2 Whether this be so or not, it is clear that the imputation of having contracted syphilis was actionable, partly by reason o: the nature of the disease, and partly by reason of the obvious inference as to the sufferer's moral character.3 Imputation of unfitness for a profession trade or calling is obviously calculated to cause temporal loss. There are long lists of cases in the reports o: the sort of opprobvious words which, if used of clergymen,4 attomeys,5 barristers,6 justices of the peace,7 stewards of courts,8 doctors,9 traders,10 and artifcers,11 were actionable per se. On these only two remarks need be made. Firstly, it was very early held that the imputation that a trader was insolvent or bankrupt was actionable;12 and this perhaps illustrates the larger importance which commercial considerations were assuming. Secondly, it mus: be a definite calling recognized by the law, and not merely a temporary employment, or an employment of a menial nature, such as a carrier of post letters13 --a limitation in which we can perhaps trace the medieval idea of the distinctness of the status of persons professing different callings.14 An imputation of misconduct in an office of profit, which would lead to dismissal, is obviously an imputation closely

### Crime and Tort1

analogous to those just discussed. On this ground it was said that, " if I have a bailiff, to whom I commit the buying and selling of my corn and grain, and give him greater wages in respect of that trust and employment, and then a man will charge him to have deceived me in his office by buying and selling by false measure, to my loss and damage, this will bear an action, for this discredits him in his means of living : and this kind of offence may not only be cause to put him cut of that service but to be refused of all others." 1 On the same ground it was held that a charge of unchastity made against a duke's chaplain, whereby he lost his office, was actionable." If, or the other hand, the office was an honorary office, such as a justice of the peace, though a charge of corruption, or of opinions showing that he ought not to be trusted, is actionable, a charge of want only of ability is not.

Footnote 1: Bray v. Hayne (1615) Hob, 76,

Footnote 2: Payne v. Beuwmorris (1668) r Lev. 248; cp. Gallway v. Marshall (1853) 9 Exch. 294.

The last mentioned case savours somewhat of the fine distinctions introduced by the judges who wished to discourage this action. But it is clear that the broad principles, upon which the courts adjudged imputations to be actionable per se, were not in themselves unreasonable. If they had seen supplemented by a somewhat greater latitude in allowing actions where damage could be proved, the law thus developed would not have been wholly unsatisfactory.

_The rule that words or writings, though not actionable per se, were actionable if they caused damage._

Though the words spoken amounted to a slander punishable only in the ecclesiastical courts, yet if it could be proved that temporal loss had been occasioned by them, an action lay. Thus, if one accused a woman of incontinence, whereby she lost a marriage which was being arranged, she had a right of action. " For in this case the ground of the action is temporal, _sc._ that she was to be advanced in marriage, and that she was defeated of it, and the means by which she was defeated was the same slander, which means tending to such end, shall be tried by the common law. So if a divine is to be presented to a benefice, and one to defeat him of it says to the patron 'that he is an heretic, or a bastard, or that he is excommunicated,' by which the patron refuses to present him . and he loses his preferent, he shall have his action on the case for these slanders tending to such end. . And Popham Chief Justice said that if one says of a woman that keeps an inn that she has a great infectious disease by which

## 6 Deformation as a Tort1

she loses her guests, she shall have an action on the case." Similarly, if it was affirmed that a person was a bastard, whereby his title or possibility of a title to land was negatively, and he lost a chance of selling his title or possibility of title, he had a right of action.2 This last illustration comes very near to slander of title which, as we shall now see, became a separate tort in the course of the seventeenth century.

Footnote 2: This is the first one, but it was not the first one, but it was not the first one, but it was not the second one.

_The development of the tort of slander of title and torts analogous thereto._

Cases of the latter part of the sixteenth century established the principle that, if an owner of land was negotiating for its sale or other disposition to another person, and a third person made false statements as to the vendor's title, which prevented the sale or disposition, the vendor could bring an action on the case and get damages for the slander.3 This action on the case is clearly analogous to the ordinary action on the case for defamation; and in the fact that it makes no difference whether the slander is oral or written,4 it preserves the memory of a characteristic which this ordinary action then possessed.5 Both sprang from the same root; but, from an early period, differences between the conditions under which the action for slander of title and the ordinary action lay began to be developed. The action for slander of title did not lie if the third person claimed that he was entitled, though his claim were false;6 and the statement must be made with knowledge of its falsity.7 As early as 1629 it was recognized that the form and incidents of the action were different from those of the ordinary action for defamation 8--though it was probably not till the latter half of the century that these differences were universally recognized.9 In substance it was an action for malicious statements as toFootnote 1: The _Hamiltonians_ are the first and second order differential equations, which are the first and second order differential equations, which are the first and second order differential equations.

Footnote 2: The _Hamiltonians_ are the first and second order

### Crinie and Tort

because, "'he may seek his life lawfully upon just cause," and secondly, "seeking of his life is too general and for seeking _tantum_ no punishment is inflicted by the law."1 To say that a man was detected for perjury in the Star Chamber was not actionable, "'for an honest man may be detected but not convicted ; and every one who has a bill of perjury exhibited against him there is detected."2 To accuse a man of having burnt a barn was held not to be actionable, as this was no felony if the barn was neither parcel of a manson house nor full of corn.3 To impute a mere intention to commit a crime was held not to be actionable, "'for the purpose and intent o: a man without act, is not punishable by law' '; and that was so even though the act charged might be punished in the Star Chamber, "for that is by the absolute power of the Court and not by the ordinary course of the law."4 Similarly, to accuse a man of an impossible crime, as in the well-known case where A said of B, that B, while churchwarden, had stolen the bell-rope, was not actionable.5 Fine distinctions were drawn between cases where subsequent words explained a criminal charge, so as to make it impossible, and cases when they merely added an immaterial detail, so as to leave it possible. To say "'thou at: a thief and hast stolen my trees," was actionable, for the last words were merely an addition ;6 but to say "thou art a thief for thou hast stolen my trees," was not actionable, for the last words, being explanatory, showed that no crime had been committed.7 The absurdity of applying such distinctions to angry wcrds spoken in heat was pointed out by Holt, C.J.,8 and is obvious. As Sir F. Pollock has said,9 it followed that "'minute and copious vituperation was safer than terms of general reproach, such as 'thief,' inasmuch as a layman who enters on details will probably make some impossible combination."

Footnote 1: Hext v. Yeomans (_1g85_) 4 Co. Rep. 15b.

Footnote 2: Weaver v. Cariden (_1595_) 4 Co. Rep. 16a.

Footnote 3: Barham v. Nethesl (_1602_) 4 Co. Rep. 20a.

Footnote 4: Eaton v. Allen (_1598_) 4 Co. Rep. 16b.

Footnote 5: Jackson v. Adams (_1835_) 2 Bing, N.C. 402.

Footnote 6: Rolle, Ab. 1 g1, R. pl. 1.

Footnote 8: "The opinions of later times have been in many instances different from those of former days in relation to words, for formerly there has been a difference taken between saying, 'thou art a thief _and_ hast stolen my wood,' and 'thou art a thief _for_ thou hast stolen my wood '; and judgments have gone both ways; but later opinions make no difference, if the words be spoke at the same time. And these are scrambling things that have gone backwards and forwards," Baker v. Pierce (_1704_) 6 Mod. at pp. 23-24.

Footnote 9: Torts (\_1zth ed.) 242.

The same principles were applied to the other categories of words actionable per se. Thus to say of a man that he was full of the p

## 35 Deformation as a Tort

Smallpox.1 More liberality was shown in the case of words which imputed dishonesty or incapacity in a trade or profession; but even here the distinctions ran very fine. Thus to call an attorney corrupt was actionable,9 but to call him usurer, or to say that, being an executor, he would not perform the will, was not actionable.3 To call a trader bankrupt was actionable;4 but, according to some, to say that he was a bankruptly knave was not, as the words did not mean that he was a bankrupt, but only that he was like a bankrupt.5 As the words must cast an imputation on the plaintiff of unfitness for his particular trade, words which would be defamatory of one person might not be defamatory of another. Thus to call an attorney or a justice of the peace a common barrator was actionable;6 but it was not actionable to apply the same term to a common carrier.7 Obviously a man who knew the trade or profession of the person whom he wished to abuse, could, if he chose his words with care, indulge with impunity in a considerable latitude of vituperation.

Footnote 10: "Lou les parols sont dubious et poient reciever un double interpretacion lun voie que is seront actionable et l'autre nemy, l's seront prise en mitiori sensu," Rolle, Ab. i 7I, Z, pl, t.

Footnote 11: "We have a rule that words, if they admit of a double construction, shall always be taken in the best sense for him that speaks them. ... This I say the law doth when the words are amphibolus, but if the words are clearly actionable, in such case the law will never aid a man," Actions for Slounder 5.

The application of these principles was partly the cause, and partly the effect, of the general doctrine that in these actions the words complained of must be construed, not in their natural sense, but, whenever possible, in "mitio-esn." That is, they must be held not to be defamatory if a non-defamatory sense could be twisted out of them. This principle is taken for granted by Coke;8 and, if it had been limited to the case where the words were really of doubtful meaning, it would have been unobjectionable. The rule was, it is true, stated in this way by Coke,9 Rolle,10 and March,11 in the first half of the seventeenth century. But the judges, in their desire to discourage these actions, did not so limit it. They examined the words in the same manner as

### Crime and Tort

they were accustomed to examine a writ or a pleading, in order to discover, if possible, a non-defamatory sense ; and, as they were experts in this art of critically examining words, it was not difficult to find a non-defamatory sense in the most insulting words. Indeed, it would seem that the result of an action often depended on the comparative ingenuity of the counsel in suggesting interpretations of the words used. Two instances will suffice. "If one man says of another, ' Thou art a prigging pilfering merchant and hast pilfered away my corn and my goods from my wife and my servants and this I will prove,' no action lies for that (as it seems), nor does it appear that he intended that he had taken these goods feloniously, and therefore the words shall be taken in mitori sensu."1 " If a man says of A, ' he was a pick-pocket, and had picked my pocket, and took 12s. of money out of my pocket,"2 no action lies for these words, because it might be done merely as a trespass or in jest and not feloniously."3 A long lina of similar cases are reported in the books ; and in spite of attempts in the latter part of the seventeenth and in the eighteenth centuries to restrict this vicious system of interpretation,4 and to put the law upon a more sensible basis, it still continued. " It is only in comparatively recent times that the perverse subtlety of special pleading, by which this branch of the law was specially encumbered, has altogether disappeared";5 for, as we shall see,6 it is not till comparatively recent times that the Courts have ceased to look a: the cases in order to come to a conclusion as to whether the words used are or are not defamatory.

Footnote 1: Rolle, Ab. i?3, Z. pl. 14.

Footnote 2: Ibid Z. pl. 2o; and see also belov 36o.

Footnote 3: Ibid.

Footnote 4: " And tho' in the old books the rule was to take the words in mitori sensu, yet by Holt, C.J., they would give no favour to words, and should give satisfaction to them whose reputation is hurt; and would take worlds in a common sense according to the vulgar intendment of the bystanders. The rule de mitori sensu is to be understood when the words in their natural import are doubtful, and equally to be understood in the one sense as in the other," Somers v. House (t694) Holt 39; " I have heard my Lord Hale and Justice Twisden say that they knew no set rule for actions for words, but that all words stood upon their own feet," Baker v. Pierce (t704) 6 Mod. at p. 24 _per_ Holt, C.J.; " men's tongues growing more virulent, and irreparable damage arising from words, it has been by experience found, that unless men can get satisfaction by law, they will be apt to take it themselves. The rule therefore that has now prevailed is, that words are to be taken in that sense that is most natural and obvious, and in which those to whom they are spoken will be sure. to understand them," Harrison v. Thewakowski (375A) to Mod. at p. 198; cp. Carpenter v. Tarrent (1737) Cas. t. Hardwicke _per_ Lord Hardwicke, C.J.

Footnote 5: " Clerk and Lindsell, Torts (4th ed.) 563.

Footnote 6: Below 35$-359.

${}^{\\rm 1}$ Rolle, Ab. i?3, Z. pl. 14.

## 6 Deformation as a tort 857

($\\dot{\\theta}$) One effect of the line of cases, which has just been discussed, was to make it unnecessary, in many instances, to consider whether or not the plaintiff had suffered damage. The words were held not to be defamatory, and that was the end of the case.1 But even if the plaintiff could prove that he had been defamed and had suffered damage, his difficulties were not at an end. Firstly, it was laid down by Coke in the \_Earf of Northampton's Case_2 that, "if J.S. publish that he hath heard J.N. say that J.G. was a traitor or thief, in an action of the case, if the truth be such, he may justify. But if J.S. publish that he hath heard generally without a certain author, that J.G. was a traitor or thief, there an action _sur ie case_ lleth against J.S. for this, that he hath not given to the party grieved any cause of action against any, but against himself who published the words, although that in truth he might hear them." This was long regarded as settled law,3 and was not overruled till the beginning of the nineteenth century.4 It is not till then that we begin to get the development of the modern rules as to when a person is liable for slander, when damage has been caused by its repetition by other persons.5 Secondly, the damage must be ascertainable temporal damage. Thus it was held in 16696 that to say of a virgin of good fame, "she was with child by Simons," whereby she lost her parent's favour, was not actionable. This rule was no doubt due in part to the rule that defamation, which alleged offences cognizable only in the ecclesiastical courts, and unaccompanied by temporal damage, was not actionable at common law.7 But, as the case of \_Lynch v. Knight_8 in 1861 shows, the rule long worked hardship; and it has only partially been remedied by the Sander of Women Act 1891,9 in the case of the one particular class of slander in which the rule worked the greatest hardship. Moreover, the existence of the damage must be strictly proved--" when the speaking of the words might be a damage to the plaintiff, yet if the ground of that ramification do not sufficiently appear by the record, the action

### Crime and Tort

will not lie."1 Thirdly, we have seen that, though the defamation imputed only an offence cognizable in the ecclesiastical courts, yet if it was followed by damage, an action lay--e.g. the imputation of unchastity to a woman whereby she lost her marriage.2 Similarly it was held that, where the plaintiff's shepherd falsely and maliciously told the bailiff of the manor that one of the plaintiff's sheep was an estuary, whereupon the bailiff seized it, this damage was attributable to these words, and made them actionable.3 But it was laid down in _Vicars v. Wileocks4_ that, if in consequence of the words spoken, another does an act which would be illegal, even assuming that the words were true, no action lay. It is probable that this decision was based on somewhat the same ground as the decision in the _Earl of Northampton's Case_.5 Just as in that case the person slandered was only allowed to recover against the originator of the slander, and not against the person who had repeated it, so, according to this decision, he was only allowed to recover against the man who had done the illegal act which had damaged him, and not against the person who had uttered the slander, which had caused the illegal act to be done. The law in the one case allowed an action against the originator of the slander, and in the other case against the person who had done the illegal act. It refused to allow any other action, and so the slanderer went free. But it is probable that this hard and fast rule is as obsolete as the rule laid down in the _Earl of Northampton's Case_.6 The true test is, as Sir F. Pollock has pointed out,7 not whether the act done was legal or illegal, but whether the act, whether legal or illegal, was the natural and probable consequence of the slander.

Footnote 1: March, Actions for Slander 49; a fortiori if it appeared by the record that there was no damage--'if one say of a woman that 'she hath murdered her husband'; and she and her husband bring the action, it will not lie, because it doth appear by the record that the slander is not prejudicia,'' ibid., citing a case of 1608.

Footnote 2: Above 35o.

Footnote 3: Newman v. Zachary (r647) Aleyn 3.

Footnote 4: (r806) 8 East $\\longrightarrow$ 'the special damage must be the legal and natural consequence of the words spoken, otherwise it did not sustain the declaration : and here it was an illegal consequence ; a mere wrongful act of the master ; for which the defendant was no more answerable, than if in consequence of the words, other persons had afterwards assembled and seized the plaintiff, and thrown him into a horsepond by way of punishment for his supposed transgression,' _Her_ Lord Ellenborough, C.J.

Footnote 5: (r63) r2 Co. Rep. r32.

Footnote 6: See the remarks of Lord Wensleydale in Lynch v. Knight (r86r) g H.L.C. at p. 6oo.

Footnote 7: Torts (zath ed.) 24o.

All these evil results, which flowed from the attempts of the judges to discourage these actions for defamation, were aggravated by the accumulation of cases in the reports, in which the courts had construed this or that specimen of abuse to be or not to be defamatory. We have seen that the practice of reporting cases, which turned on the construction of particular documents, tended

**DEZAMATION AS A TORI'**

**359**

to create all sorts of arbitrary rules for the interpretation of these documents ; that the status of these rules was often uncertain--it was not clear whether they were rules of law, or rules of construction, or merely inferences of fact as to the interpretation of the particular document before the court; and that the application of these rules often tended to frustrate the intentions of the parties to these documents.1 Similar evil effects followed these numerous reports of actions for defamatory words. A very cursory glance at Rolle's and the later Abridgments, will show that this practice of piling up cases, which turned on the construction of particular words, had a disastrous effect on this branch of the law. Rolle tried to reduce them to some sort of order by grouping them under general headings. Thus he has a long list of cases turning on the imputation of perjury ; on more general words of abuse ; on words which do not impute felony but only minor offences ; on adjective interrogative conditional and disjunctive words, and words in the past tense ; on words which are not directly affirmative ; on words imputing a criminal intention ; on cases in which later words will explain and modify the effect of former words ; on words imputing disgraceful conduct in one's profession office or trade ; on words which will support an action in spite of their uncertainty ; on cases where the words will be taken in mitiore sensu ; on cases where the action lies though the words are repugnant, though the person slandered is not directly described, or though the charge is not quite precisely made ; on cases in which an averment would, and cases in which it would not, render words actionable. A study of those cases makes it quite obvious that so many and such fine distinctions were drawn by the judges as to the actionable quality of words, that it was a mere lottery whether or no any particular words would be held to be defamatory ; and although, as we have seen, protests were made in the late seventeenth and the eighteenth centuries against this vicious system of citing cases to prove that this or that set of words were or were not defamatory,2 it was not till modern times that it was eliminated, by the application to words and writings, which were the subjects of actions for defamaton, of the rule that the meaning of all words and documents is a question of fact to be deduced from the words and the documents themselves.3

Footnote 1: Vol. vii. 392-394: ${}^{,\\

### Crime $\\mathrm{A}$nd Tort

instigated others to attempt to murder the speaker, were held to be actionable by three judges against two.1 Words spoken of a commissioner to examine witnesses, imputing that he had taken bribes to favour one of the parties, were held actionable by four judges against one.2 The statement that a justice of the peace was "a partial justice" was held actionable by the two judges who tried the case.3 To accuse a ran of having robbed the church, and stolen lead from it, was held actionable by three judges against two ; but no action would have lain if the words had been "thou hast robbed the church _for_ thou hast stolen lead," because there could be no larceny of the lead which was fixed to the freehold.4

Footnote 1: Harper v. Beamond (f605) Cro. Jac. 56,

Footnote 2: Moor v. Foster (f1606) ibid 65.

Footnote 3: Kemp v. Housgoe (f606) ibid qo.

Footnote 4: Benson v. Morley (f608) ibid 153.

Footnote 5: Robins v. Hildredon (f608) ibid 65.

Footnote 6: Holt v. Astgrigg (f608) ibid 184.

In the following cases the words were held not to be dofamatory :--It was held by three judges to two that, to say of a magistrate that "he is a rascally villain, and keeps a company of thieves and traitors to do mischief," was not actionable ; 6 and again by three judges to two that it was not actionable to say "thou art a thievish knave and lath stolen my wood," as "stealing of wood may be intended growing wood, and then it is not any felony, and so no cause of action."6 On the same principle it was held not actionable to charge a man with having stolen iron bars from windows, or corn from a field.7 But, perhaps, the most absurd of all these cases is the following ; 8 the words were, " Sir Thomas Holt struck his cook on the head with a cleaver, and cleaved his head ; the one part lay on the one shoulder and the other on the other "--as clear an accusation of homicide, one could think, as could be desired But "it was moved in arrest of judgment that these words were not actionable, for it is not averred that the cook was killed, but _argumentative_. The Court was of that opinion, Fleming, Chief Justice, and Williams _absentibus_ ; for slander ought to be direct, against which there may not be any intendment : but here notwithstanding such wounding the party may yet be living ; and it is then but trespass."

Footnote 8: Kot v. Astgrigg (f608) ibid 184.

It is clear that an action which had given rise to such a body of law as this, gave no adequate remedy for defamation. No doubt in the early part of the seventeenth century its inadequacy was mitigated by the fact that proceedings might be taken in the court of Star Chamber.9 But, when the Star Chamber was abolished, a new and better remedy was imperatively needed. We shall now see that it was mainly for this reason that, after the Restoration, the courts began to treat the tort of libel in a different way from the tort of slander. The old unsatisfactory law

## 12 Deformation as a Tort

was still applied to spoken defamation ; but some very different rules were applied to defamation which was written. These rules eventually reacted on the tort of slander, and effected some improvement in the law ; but the unfortunate distinction between written and spoken defamation, due ultimately to the treatment of the action on the case by the judges of the early years of the seventeenth century, and immediately to the remedy for that treatment adopted by the judges of the latter part of that century, still remains to trouble the law.

The origin of the difference between libel and slander.

The abolition of the jurisdiction of the court of Star Chamber, and the absorption of some parts of it by the common law courts after the Restoration, created a difficult problem in connection with several wrongs or offences which hover on the border line between crime and tort. This problem can be stated as follows : There were several of these wrongs or offences, notably defamation conspiracy and maintenance, as to which the common law, because it had provided a civil or a criminal remedy, had, in the medieval period and later, acquired a certain number of rules.1 But, during the sixteenth and seventeenth centuries, the law as to these wrongs or offences had been further developed by the court of Star Chamber ; and this development had been concerned mainly with their criminal aspect.2 It followed that, when the common law courts took over these parts of the jurisdiction of the Star Chamber, it took over the law relating to the wrongs or offences which had been there developed. They became common law mismeanours ; and the definition of these misdemeanours owed something both to the common law rules and to the rules of the Star Chamber. How much they owed to these two sets of influences varied in each case. In the case of the criminal aspect of defamation3 and conspiracy4 the debt owed to the Star Chamber was large, and that owed to the common law was comparatively small. In the case of the civil aspect of defamation, and of the civil and criminal aspect of maintenance,5 the influence of common law rules was more prominent ; and we shall see that, for a considerable period, the same thing can be said of the civil aspect of conspiracy.6 Now, when all these three wrongs or offences came to be recognized as common law misdemeanours, two questions naturally arose. Firstly, could all these criminal offences be regarded as torts ? and, if so, were the incidents of these offences, regarded as

### Crime and Tort

torts, in all respects the same as the incidents of these offences regarded as crimes? Secondly, were they torts like trespass, which would give rise to an action for nominal damages? or were they tots like negligence, which would only give rise to an action if the plaintiff could show that he had suffered damage? In other words, was the act _per se_ tortious, or was it only tortious if accompanied by damage?

These problems were raised by the historical development of the law on these subjects. But there is no reason to think that the judges realized their precise nature; and it is certain that they did not try to solve them on any general or theoretical grounds. A${}\_{3}$ must necessarily happen under a system of case law, they decided the cases as they arose in the manner which seemed to them most expedient, and for reasons which seemed sufficient to dispose of the case in hand. The result has been that they have left undecided many points which, in later years, have given rise to much difference of professional and judicial opinion. Controversy upon these points has often no: been illuminating, and the decisions arrived at have not always been convincing, mainly because the historical causes, and therefore the real nature of the problem, have not been clearly realized--a fact of which the conflicting decisions in the case of _Neville v. London Express Newspaper Ltd._,1 and the long unsettled question of the nature of the tort of conspiracy,2 are leading illustrations. But, even if the judges of the seventeenth century had realized the true nature of the problem, and had approached it from its theoretical side, it would have been found difficult to solve, because many good reasons could be given for opposite solutions.

Footnote 1: \[rg19\] A.C. 368. ${}^{2}$ Below 394-397-

(i) Could all those criminal offences be regarded as torts? and, if so, were the incidents of these offences, regarded as torts, in all respects the same as the incidents of these offences regarded as crimes?

In favour of the view that all these offences should be regarded as torts, it could be argued that they were all treated by the law as criminal offences; and that, if an act so treated caused damage to another, that other ought to have an action for damages. Moreover, it could be argued that this was the right solution on historical grounds, because, firstly, the common and statute law had recognized, in the case of conspiracy and maintenance, that these offences could give rise to proceedings in the nature of trespass, which, like trespass, were as much civil in their nature as criminal;3 and, secondly, because the court of Star Chamber sometimes gave damages to the person injured by all

## 1 Deformation as a Tort

The first 10 years later, the second 10 years later, the

### Crime and Tort

case of written as opposed to spoken defamation, the first line of reasoning was followed. We shall see that in the case of libel, as distinct from slander, the courts, after the Restoration, held that no special damage need be shown to ground the action \[1\]--that libel was a wrongful act from which damage could be presumed.

If we took a narrow historical view of the development of these torts, we might wonder at the conclusion thus reached. It might be said that the early common law remedies, both in the case of conspiracy and maintenance, showed that, being wrongs in the nature of trespass, they should have been regarded as torts of the nature of trespass, that is as violations of absolute rights ; while dcfamation, spoken or written, being redressible at common law only by an action on the case, should not have been regarded as giving rise to an action in tort in the absence of special damage. But to reason in this way would be to ignore, both the manner in which the Star Chamber had developed all these wrongs in the sixteenth century, and the new conditions which the problem had, in consequence, assumed after the Restoration. The judges, as I have already said, were not fully conscious of the problem in all its bearings ; but, when faced with the question whether, in any particular case, written defamation, or conspiracy, or maintenance should give rise to an action in tort, they answered it in a manner seemed to them to be most expedient.

Now in considering the question whether written defamation should give rise to an action in tort without proof of special damage, the judges had before them the following three facts : firstly, such defamation was a crime ; secondly, the development of the action on the case had made this action a wholly unsatisfactory remedy for the tort of defamation ; thirdly, if the prevalent habit of duelling was to be suppressed, some better remedy must be provided. We know that the last two considerations had induced them to try to improve the conditions under which the action on the case lay ; \[2\] and, though there is no direct evidence as to their reasons for deciding ;that written, unlike spoken defamation, would give rise to an action without proof of special damage, I cannot help thinking that it was the combined weight of all these three reasons which induced them to reform the law by drawing this distinction. However that may be, the cases make it quite clear that this distinction was drawn in the latter half of the seventeenth century.

The earliest decision is the case of _King v. Lake_ in 1670.\[3\] Hale, C.B., held that, "although general words spoken once without writing or publishing them would not be actionable ; yet

## 12 Deformation as a tort 365

here, they being writ and published, which contains more malice, than if they had been once spoken, they are actionable "; and this decision was affirmed on a writ of error.1 It was followed in 1683 in the case of _Austin v. Culpeper.2_ In the eighteenth century these decisions were followed in the cases of _Harman v. Delany_,3 and _Villers v. Monsley_,4 though one of the judges in the latter case seemed to think that the authority for the distinction between written and spoken defamation was somewhat slender.5 The rule was finally settled in 1812, after a full consideration of the cases, by the decision of the Exchequer Chamber in the case of _Thorley v. Kerry.6_ Mansfield, C.J., held with regret that the distinction between spoken and written defamation, though indefensible in principle,7 was too well established to be repudiated.

Footnote 1: Skinner at p. 124.

Footnote 2: "And t'was said that to say of any body that he is a dishonest man is not actionable, but to publish so, or to put it up upon posts is actionable," Skin. at p. 124 ; S.C. 2 Show, 313.

Footnote 3: (1731) Fitz-Gibbon at p. 254.

Footnote 4: (1769) 2 Wils, 403.

Footnote 5: "I repeat it that I wish there was some more solemn determination that the writing and publishing anything which tends to make a man ridiculous or infamous ought to be punished," ibid at p. 404 _for_ Buthurst, J.

Footnote 6: 4 Taunt, 355.

Footnote 7: Below 365.

Footnote 8: Above 335.

Footnote 9: 1 Ld. Raym, 486 at p. 490 _fer_ Gould, J. ; cp. Ratcliffe v. Evans \[1892\] 2 Q.B. at pp. 528-532 _fer_ Bowen, L.J.

It cannot be doubted that this decision of the judges of the latter part of the seventeenth century to treat libel as an independent tort, for which a plaintiff could recover damages without the need for proving special damage, had the results which were intended. In the first place, though the damage and not the insult was still the gist of the action the fact that the publication of written defamation was regarded as a wrong to reputation from which damage could be presumed, naturally tended to make the insult a more prominent element in the tort than the damage ; and so tended to put the tort upon a more satisfactory footing.8 In the second place, once the libel was proved, the defendant was shown to be a wrongdoer, and the plaintiff could recover damages because the commission of such a wrong implies damage. There was no need, as in the case of slander, to allege the special damage suffered with particularity, and prove that it had been suffered. This difference between an act which was in itself wrongful, and an act which was only wrongful if it caused damage, was recognized in the case of _Iveson v. Moore_ in 1700;9 and it gave rise to one of the most beneficial effects of thus treating libel as a wrong in itself --the emancipation of the court from that long series of cases, in which the question whether or not temporal damage could be said to have flowed from the words spoken, had been discussed with so much misplaced subtlety. In the :third place, it followed also that

### Crime and Tort

the courts were also relieved from considering whether the case fell within one of the categories of words actionable _per se_. This meant that another of the longest and most unsatisfactory series of these older decisions on the action on the case could be disregarded. For these three reasons, therefore, the invention of the separate tort of libel for the first time put the most important branch of the law of defamation on a satisfactory footing ; and it cannot be doubted that the principles applied to this tort helped the judges to improve the tort of slander, by enabling them to disregard many of those unprofitable rules, such as the doctrine of the mitior sensu,1 which their predecessors had laid down in order to discourage the action on the case.

Footnote 1: Above 355.

At the same time this improvement had been effected at the expense of imposing upon the law the unfortunate distinction between the torts of libel and slander. At the latter part of the seventeenth century this may well have seemed not too high a price to pay for the rescue of the tort of defamation from the wholly unsatisfactory condition to which it had sunk. But, when the law had been reformed, and some of the more rational rules of libel were being applied to slander ; when the real reasons for the decision of the judges to trea: libel as an independent tort had been forgotten, and unsatisfying a priori reasons were being invented ;2 the absurdity of the distinction began to appear. How completely the original reason for the establishment of the distinction had been forgotten appears from Mansfield, C.J.'s judgment in _Thorley v. Kerry.3_ He would have liked to assimilate libel to slander, by ruling that "no action could be maintained for written scandal which could not be maintained for words if they had been spoken."4 This would no doubt have got rid of the separation of the two torts ; but it would have got rid of it at the expense of undoing most of the good effects of the recognition of libel as a separate tort, and of throwing the law back into the state in which it was before that recognition had taken place. The converse solution would have been infinitely preferable. Fortunately the current of authority was too strong to be overruled in this way ;5 and so it may be said that the case affords a striking

## 36 Deformation as a Tort

illustration of the salutary principle that settled rules should not be lightly overruled on a priori grounds.

In fact, the modern torts of sander and libel represent two different strata of legal development. Slander represents the tort developed in the sixteenth and early seventeenth centuries in and through the action on the case. Libel represents the tort created by the judges of the latter part of the seventeenth century, in order to remedy those defects of the tort developed in the earlier period, which had been caused largely by the efforts of the judges to discourage the action on the case. Their action put the tort of libel on the right lines ; and if ever an assimilation between the two torts is effected by the Legislature, it will be taken as the model. At the same time, the tort developed in and through the action on the case in the earlier period has influenced in many ways the later development of the law. We shall now see that some of the rules, which originated in the action on the case for defamation, were applied to the tort of libel ; and, similarly, that some of the rules applicable to libel as a crime have both influenced, and been influenced by, the development of the torts of libel and slander.

(3) The origin of some of the essential characteristics of the torts of libel and slander.

During the sixteenth and seventeenth centuries we can see the origins of some of the essential characteristics of the tort of defamation. Many of them originated in the rules applied by the common law courts to the action on the case, and were applied both to slander and libel. Some of them, notably the rules as to the innuendo and privilege, were applied both to the crime and to the tort of defamation, and illustrate the manner in which the tort influenced the crime. On the other hand, in the rule, which long prevailed, that the statement must have been made maliciously we can trace one way in which the crime influenced the tort. I shall deal with these rules under the following heads :--(i) the words or writing must be defamatory, and they must be proved to have been spoken or written in the manner alleged by the plaintiff ; (ii) they must be proved to have been spoken or written of and concerning the plaintiff ; (iii) they must have been published to some third person ; (iv) they must have been published maliciously ; and (v) they must not admit of justification nor have been written or spoken on a privileged occasion.

(i) _The words or writing must be defamatory, and they must be proved to have been spoken or written in the manner alleged by the plaintiff._

So soon as the courts allowed an action on the case for defamation, the question, what statements could be regarded as defamatory,

### Crime and Tort

arose. It soon became clear that though, as to some statements, there could be no question, as to others the context and circumstances made all the difference. It was necessary, therefore, to lay down rules as to the manner in which a plaintiff, who complained of one of these ambiguous statements, must frame his pleading. Partly by reason of the growing elaboration of the rules of pleading, and partly by reason of the desire of the judges to discourage these actions, the rules on this matter were strict. They are contained in the mass of pleading rules which grew up round the "innuendo " and the "colloquium."

If words were obviously defamatory of the plaintiff, no innuendo was needed; and if they were obviously not defamatory, an innuendo could not make them actionable. An innuendo, therefore, could only be of use where the statement was apparently defamatory, but where the person or thing alluded to in it was not described with sufficient clearness. It could not add to the statement any additional fact needed to remedy an uncertainty in the person defamed, or in the charge made against that person. It could only indicate with greater clearness a person already mentioned, or a charge already made. These rules are clearly illustrated in a case reported by Coke.1 Dealing with the rule that an innuendo could only indicate with greater clearness a person already mentioned, he says, " If one says without any precedent communication that one of the servants of J. S. (he having many) is a notorious felon or traitor, here, for the uncertainty of the person, no action lies; and an innuendo cannot make it certain. . . . But when a person is once named in certain, as if two speaking together of J. S. one says, ' he is a notorious thief,' then J. S. in his declaration may show that there was speech of him between the two, and that one said 'of him, ' he (innuendo predictum J. S.) is a notorious thief.' For the office of an innuendo is to contain and design the same person who was named in certain before, and in effect stands in lieu of a predict', but an innuendo cannot make a person certain who was uncertain before." Dealing with the rule that it could only indicate with greater clearness a charge already made, he says, " An innuendo cannot alter the matter or sense of the words themselves; and therefore when the defendant in the case at bar said of the plaintiff, ' that he was full of the pox (innuendo the French pox),' this innuendo both not do its proper office, for it endeavours to

## 6 Deformation as a tort

extend the general words, the pos, to the French pox, by imagination of an intent which is not apparent by any precedent words, to which the innuendo should refer."

These illustrations indicate the function of the colloquium. As the innuendo could only clear up doubts as to persons or matters already referred to, it was necessary to set out all these persons and matters very carefully in the introductory averments.1 These introductory averments were known as the colloquium, and this colloquium must contain a careful narrative of all the circumstances which were necessary to be stated, in order to prove that the words, with the appropriate innuendoes, were defamatory. Unless these circumstances,were stated with the utmost care, it would be possible to arrest judgment, on the ground that the statement and the innuendoes gave no cause of action.2 It was not till the Common Law Procedure Act of 18523 that the need for this colloquium was removed, and that plaintiffs, in actions for libel or slander, were allowed "to aver that the words or matter complained of were used in a defamatory sense, specifying such defamatory sense, without any prefatory averment to show how such words or matter were used in that sense."

Footnote 1: "That in all cases for words, where there is anything that is the cause or ground of the action, or tends necessarily to the maintenance of it, in such case the action will not lie, without that thing be expressly averted to be, or not to be, as the case requiret," March, Actions for Slounder (ed. 1647) I42.

Footnote 2: Johnson v. Aylmer (1666) Cro. Jac. 126; Scutt v. Hawkins (1623) z Rolle Rep. 243; cp. Dacy v. Clinch (1661) r Sid. 52 for a case in which a motion to arrest judgment on this ground failed.

It was at first necessary for the plaintiff to prove that the words had been spoken exactly as he alleged them.4 During the eighteenth century this strictness was somewhat relaxed,5 but not wholly removed.6 And, wherever a colloquium was necessary to ground the action, the averments in the colloquium must also be strictly proved. Thus, if words were only actionable if spoken of the plaintiff in his trade, there must be a colloquium alleging this, and the facts there set out must be proved.7

**Crime and Tort**

(ii) _The words or writing must be proved to have been spoken or written of and concerning the plaintiff._

Just as the law required strict proof that the statement was defamatory, and that it had been written or spoken as alleged, so it required strict proof that it was written or spoken of and concerning the plaintiff. Unless it was alleged in the plaintiff's declaration that the statement was made of and concerning him, the declaration was bad. Thus, in the case of _Johnson v. Aytmer_,1 the plaintiff declared that the defendant spoke and published the following false and scandalous words : "Mr. Price, you do my Lord Burleigh wrong, that you do not apprehend Jeremy Johnson, innuendo the plaintiff, for a leun, and seize his goods; for le, innuendo the plaintiff, hath stelen a sheep from Wright of Rirsly, innuendo John Wright." After verdict for the plaintiff, it was successfully moved in arrest of judgment, " that the words are too generally laid to maintain the action ; for they are not alleged to be spoken of the plaintiff in the writ or count; but only in reciting the words he saih, innuendo the plaintiff; and the innuendo, without expressly a.leging the words to be spoken of the plaintiff, will not maintain the action." This principle was rigidly applied in later law both to actions and to indictments, as is made abundantly clear by the luminous judgment of Fletcher-Moulton, L.J., in _Jones v. Hulton_.2 But the decision of the majority of the court of Appeal and the House of Lords 3 in that case, has, in effect, placed a new 4 and important limitation on the generality of this rule. If a person publishes a libellous statement of a fictitious person, whom he christens by a name of his own choosing, and neither knows nor cares whether or not his statement can be taken as referring to an existing person of that name ; and if in fact the jury is satisfied that it has been taken to refer to an existing person; that person can recover damages.

Footnote 1: (1606) Cro. Jac. 1z6,

Footnote 2: (1909) 2 K. B, at pp. 459-465 ; cp. L.Q.R. xxv 341-342.

Footnote 3: (1909) 2 K. B, at pp. 480-482 _for_ Farwell, L.J.

Footnote 4: That this limitation is new is I think clear ; on this I agree with what is said L.Q.R. xxvi 1q3-1q4, " All the learning and subtlety of the Lord Justice (Farwell, L.J.), backed by the agreement of the _make_ and _learned_. Lords, still fail to convince us that this is not very new law. It may be said, however, and no doubt will be, that the law is new only because the question had never risen in such a form."

Footnote 5: (1909) 2 K. B, at pp. 480-482 _for_ Farwell, L.J.

Recent developments in modern journalism make this modification of the strictness of the old principle clearly necessary ; and the technical reasoning by which the law has been thus modified in the interests of substantial justice, is a good instance of the flexibility which our system of case law imparts to our legal system. In effect, it is based on an analysis of the nature of the intention to libel the plaintiff which the law requires.5 The

## 12 Deformation as a tort

law will impute intention to do an act, not only if the defendant actually meant to do it, but also if he acts recklessly, that is without any care whether he does it or not. Just as an intention to deceive can be imputed, both where a person makes a false statement of fact with knowledge of its falsity, and also where he makes such a statement reckless.y, that is neither knowing nor caring whether it be true or false; so an intention to libel the plaintiff can be imputed from either of these two states of mind. "The element of intention, which is as essential to an action for defamation as to an action for deceit, can be proved in the same way in both actions."1

Footnote 1: \[160\] 2 K.B. at p. 48T.

(iii) _The words or writings must have been published to some third person._

We have seen that this rule was always applied to the action on the case, because it followed from the fact that the damage to the person, arising from the defanatory statement, was the gist of the action.2 Therefore the plaintiff must always allege such publication in his declaration;3 and if the words were in a foreign language, he must further allege that they were understood by those who heard them.4 This rule as to the necessity of publication to a third person was naturally followed in the case of libel; but in the case of a libel written in a foreign language, and published to the world at large, though the words must be set out, both in the original and in a translated form in the plaintiff's declaration,5 the allegation that they were understood would be obviously unnecessary.

Footnote 2: \[160\] 2 K.B. at p. 48T.

(iv) _The words or writings must have been published maliciously._

At the present day it would hardly be correct, and it would certainly be misleading, to state the rule in this form. When it is said that the words or writings must have been published maliciously, all that is meant is that they must have been published without just cause or excuse.6 We shall see that this was all that the earlier cases upon the tort of defamation meant; and we have seen that the same thing is true of the crime of defamation.7 But, when it became customary to allege malice both in declarations in civil cases and in indictments in criminal cases, it naturally came to be thought that malice was an essentialingredient both of the tort and crime. Defamatory statements, it was said, must have been published maliciously. It was however admitted that, from the fact that a false and defamatory statement had been published without just cause or excuse, the law implied malice. But when it is said that the law 'implies' anything, it is generally the case that the thing implied is not really present. Hence, in modern times, the law as to this part of the subject has been considerably clarified, by the recognition of the principle that malice is not a necessary ingredient either in the crime or in the tort of defamation; and that it is only important in those cases in which the defence of qualified privilege is set up. Thus the history of this rule is the history of its gradual introduction into, and final elimination from, the law.

It is clear from the conditions under which the action on the case lay that malice was not the gist of the action; and this was recognized in some of the cases decided in the sixteenth and early seventeenth centuries. It was held in 1597 that it was not necessary in an action on the case to allege that the words were spoken "malitiose."1 But, in the earlier case of _Mercer v. Sparks_,2 we can see a hint of the manner in which the idea that malice is a necessary ingredient in the tort will be introduced. In that case it was held that it was no error not to allege that the words were spoken maliciously, " because the words themselves were malicious and slanderous." Clearly this comes very near to the rule that malice is implied. It is not therefore surprising to find that in other cases it is laid down that the malice or intention to slander was of the essence of the cause of action.3 Moreover, no very clear distinction was as yet drawn between the malice which the law implies from the speaking of slanderouswords, and the express malice which will rebut a defence of qualified privilege, because, as we shall see, the conception of qualified privilege had not as yet been attained.4

Footnote 1: Anon, Moore 459 -- " Auter error asigne quia ne fuit alledge que les parols fuerunt parlies malitiose, et uncore auxi bone en action sur le cas pour parols."

Footnote 2: (t586) Owen 5t.

Footnote 3: This point comes out clearly enough in Brook v. Montague (t566) Cro, Jac. go, and in the ruling of Wray, C.J., in the case cited ibid at p. g1.

Footnote 4: Below 377.

Footnote 5: " And he said that in an endictment a thing must be expressed to be done lalso et malitiose, because that is the usual form, but in a declaration those words are not necessary," Anon, Style 392.

In 1652 Rolle, C.J., restaied the rule that, in an action for slander, there was no need to allege that scandalous words were spoken malitiose; but he added that, in an indictment, such an allegation must be made, because that was the usual form.6 In this statement we can see an indication of the manner in which the idea that malice was an essential ingredient in the tort of defamation was introduced into the law. We have seen that, when the

## 6 Deformation as a tort 373

criminal jurisdiction formerly exercised by the Star Chamber in libel cases was taken over by the courts of common law, the allegation that the statement was made maliciously was always made.1 It is true that the judges tried to neutralize the effect of this conception of the crime, by holding that the legal effect of the words published, and therefore their malice, were matters of law for the court, and not matters of fact for the jury.2 But they obviously thought that malice must be regarded as a necessary ingredient of the crime. As we have seen, they would have greatly strengthened their position at the expense of the jury, if they could have ruled that malice was not a necessary ingredient; for in that case it would have been quite clear that all the jury had to find was the publication of a writing bearing the meaning alleged by the prosecution. No room would have been left for the contention that, as malice was the gist of the offence, the jury must be convinced that the publication was malicious, before they found the accused guilty of libel, just as they must be convinced that a homicide was malicious, before they found the accused guilty of murder.3 It is not surprising that it became more and more usual for plaintiffs who were suing in tcrt for libel or slander, to allege malice; and that, in spite of the earlier precedents to the contrary, it gradually came to be though: that malice was as essential an element of the tort as of the crime. In a case of 1632, reported by March, the plaintiff had alleged that the words were spoken "'falso et malitiose," and the jury found that they were spoken "'falso et injuries." Judgment was given against the plaintiff, because the jury did not find malice--" for if the words were not spoken maliciously, no action will lie."4 This statement of the law no doubt confirmed the existing practice of always alleging malice. Thus in 1737 it was said "that words are always laid to be spoken falso et malitiose, and that therefore any evidence proving them not to be so ought to be admitted." To this proposition the court seems to have assented, for, " it was agreed that malice is the gist of this action and that therefore evidence proving the manner and occasion of speaking the words to show that they were not spoken with malice has always been admitted."5 And the law was stated in the same way by Comyns6 and Blackstone.7

### Crime and tort

But, in the first quarter of the nineteenth century, it began to be perceived that malice was not an essential ingredient in either the crime or the tort of defamation. This new view of the law rested in substance on a distinction between what was called " legal " malice or malice implied by law, and " actual " malice. As long ago as 1713 this distinction had been recognized by Parker, C.J., who had pointed out that the former variety of malice meant nothing more than that the thing, said to be maliciously done, was done without just cause or excuse.1 But it was not till the beginning of the nineteenth century that this doctrine was applied to defamation, because it was not till then that the disturbing effects of the controversy, as to the rights of juries in cases of libel, had been quieted by Fox's Libel Act.2 As the result of that Act, it was possible to approach the question as a pure matter of law ; for, however libel was defined, the jury could now return a general verdict on the whole question. The manner in which this new view of the law was put forward and reconciled with the older view, will appear from the following cases : In 1823, in the case of _R. v. Harvey_, Holroyd, J., said that, " It is not necessary to aver in such an indictment any direct malice, because the doing of such an act without any excuse is indictable. . If the matter published was in itself mischievous to the public, the very act of publishing is prima facie eviderc to show that it was done malo animo ; for when a publication having such an injurious tendency is proved, it is intended to have been done with a malicious intention ; because the principle of law is that a party must always be taken to intend those things and those effects which naturally grow out of the thing done."3 In 1825, in the case of _Bromage v. Proisser_,4 this rule was applied to actions for tort ; and it was actionable : neither are words spoken in a friendly manner, as by way of advice, admontion, or concern, without any tincture or circumstance of ill will; for in both these cases they are not _maliciously_ spoken, which is part of the definition of slander. ... What was said with regard to words spoken, will also hold in every particular with regard to tibels by writing or printing, and the civil actions consequent meteupon," Bl. Comm. iii 125-126; dealing with the criminal law, he defines libels as " malicious defamations of any person, and especially a magistrate, made public by either printing writing signs or pictures in order to pro/oke him to wrath, or expose him to public hatted content and ridicule," ibid 175.

Footnote 1: " Malice in common accceptation is a desire of revenge, or a settled anger against a particular person. ... This is by the vulgar use of the words in English. But (it) is not the legal sense taking them as law terms. ... In short malice and maliciously I take to be terms of law which in the legal sense always exclude a just cause. So in case of murder, the statutes take away clergy in case of wilful murder of malice precise, when wilful stands in opposition to accidental, and of malice to cases of reasonable provocation, such as might move an honest and good man ; and the Court and not the jury have ever determined of malice. And the question has always been with or without cause or excuse, and therefore that which is only malice implied by law, perhaps would be expressed more intelligibly, at least more familiarly, if it were called malice in a legal sense," Jones v. Givin (1713) Gilb. Cas. at pp. 190-193.

Footnote 2: Above 345. ${}^{\\circ}$ a B, and C, at pp. 266-267. ${}^{\\circ}$ 4 B, and C, 247.

### Crime and tort

But, in the first quarter of the nineteenth century, it began to be perceived that malice was not an essential ingredient in either the crime or the tort of defamation. This new view of the law rested in substance on a distinction between what was called " legal " malice or malice implied by law, and " actual " malice. As long ago as 1713 this distinction had been recognized by Parker, C.J., who had pointed out that the former variety of malice meant nothing more than that the thing, said to be maliciously done, was done without just cause or excuse.1 But it was not till the beginning of the nineteenth century that this doctrine was applied to defamation, because it was not till then that the disturbing effects of the controversy, as to the rights of juries in cases of libel, had been quieted by Fox's Libel Act.2 As the result of that Act, it was possible to approach the question as a pure matter of law ; for, however libel was defined, the jury could now return a general verdict on the whole question. The manner in which this new view of the law was put forward and reconciled with the older view, will appear from the following cases : In 1823, in the case of _R. v. Harvey_, Holroyd, J., said that, " It is not necessary to aver in such an indictment any direct malice, because the doing of such an act without any excuse is indictable. ... If the matter published was in itself mischievous to the public, the very act of publishing is prima facie eviderc to show that it was done malo animo ; for when a publication having such an injurious tendency is proved, it is intended to have been done with a malicious intention ; because the principle of law is that a party must always be taken to intend those things and those effects which naturally grow out of the thing done."3 In 1825, in the case of _Bromage v. Proisser_,4 this rule was applied to actions for tort ; and it was actionable : neither are words spoken in a friendly manner, as by way of advice, admontion, or concern, without any tincture or circumstance of ill will; for in both these cases they are not _maliciously_ spoken, which is part of the definition of sl

## 12 Deformation as a tort 375

clearly laid down that, except as an answer to the defence of privilege, the allegation of malice was unnecessary. "Malice," it was said, " in common acceptation means ill will against a person, but in its legal sense it means a wrongful act done intentionally without just cause or excuse."1 Except when malice is alleged as an answer to the defence of privilege, the term is used in its legal sense. Hence it is not necessary to aver it, as the law implies it from the fact that a defamatory statement has been made.2 But, in the course of the nineteenth century, it was admitted that the general rules of pleading were the same in criminal and in civil cases.3 These two cases were therefore held, in _R. v. Munslow_\* in 1895, to show that malice was not an essential ingredient, either in the crime or the tort of defamation.

Footnote 1: At p. 255 _for_ Bayley, J.

Footnote 3: "If I traduce a man, whether I know him or not, and whether I intend to do him an injury or not, I apprehend the law considers it as done of malice, because it is wrongful and intentional. It equally works an injury, whether I meant to produce an injury or not, and if I had no legal excuse for the slander, why is he not to have a remedy against me for the injury it produces? And I apprehend the law recognises the distinction between these two descriptions of malice, malice in fact and malice in law, in actions of slander. In an ordinary action for words, it is sufficient to charge that the defendant spoke them falsely, ... But in actions for such slander as is prima facie excusable on account of the cause of speaking or writing it, as in the case of servants' characters ..., malice in fact must be proved by the plaintiff," 4 B, and C. at p. 255.

Footnote 4: "If I traduce a man, whether I know him or not, and whether I intend to do him an injury or not, I apprehend the law considers it as done of malice, because it is wrongful and intentional. It equally works an injury, whether I meant to produce an injury or not, and if I had no legal excuse for the slander, why is he not to have a remedy against me for the injury it produces? And I apprehend the law recognises the distinction between these two descriptions of malice, malice in fact and malice in law, in actions of slander. In an ordinary action for words, it is sufficient to charge that the defendant spoke them falsely, ... But in actions for such slander as is prima facie excusable on account of the cause of speaking or writing it, as in the case of servants' characters ..., malice in fact must be proved by the plaintiff," 4 B, and C. at p. 255.

Footnote 5: "How many of the consequences of the defendant are that they are not, in the sense of the defendant, but I am sure that I know him or not, and whether I intend to do him an injury or not, I apprehend the law considers it as done of malice, because it is wrongful and intentional. It equally works an injury, whether I meant to produce an injury or not, and if I had no legal excuse for the slander, why is he not to have a remedy against me for the injury it produces? And I apprehend the law recognises the distinction between these two descriptions of malice, malice in fact and malice in law, in actions of slander. In an ordinary action for words, it is sufficient to charge that the defendant spoke them falsely, ... But in actions for such slander as is prima facie excusable on account of the cause of speaking or writing it, as in the case of servants' characters ..., malice in fact must be proved by the plaintiff," 4 B, and C. at p. 255.

3: 3: 4: 5:

### Crime and Tort

that the statement " was true as a whole and in every material part thereof."1 In addition to this narrower sense of the term justification, it is sometimes used in a larger sense to mean a defence which otherwise justifies, i.e. renders legal, the making of a defamatory statement. In other words, it covers the defence of privilege; for privilege, like : truth, is a defence to an action for libel or slander; and, unlike truth, it is also a defence to a criminal prosecution.2

Footnote 1: Pollock, Torts (righth ed.) 26r,

Footnote 2: Lord Beauchamp v. Croft Dyer 285a,

During this period the law as to privilege was meagre, and the modern distinction between absolute and qualified privilege had not arisen. Most of the cases are cases of what we should now call absolute privilege. The earliest cases all turn upon documents written with a view to, or in the course of, judicial proceedings, or upon words spoken by persons concerned in litigation. Thus, it was held in 1569, that to sue out a writ for forgery of deeds could not be made the basis of an action for scandalum magnatum; 3 and the same rule was applied in 1585 to matter alleged in articles of the peace, exhibited to the justices.4 It was settled, by the first quarter of the seventeenth century, that no action lay against judges, witnesses, or counsel for defamatory statements made in the conduct of litigation; 5 and it was settled by the case of _Lake v, King_ in 1668,6 after considerable debate and conflict of judicial opinion, that a similar rule must be applied to documents, circulated to the members of a committee of the House of Commons, and dealing with the matters which that committee was appointed to consider.7 This case settled, in substance, that documents connected with Parliamentary proceedings, and published to members of Parliament, had the same privilege as had already been accorded to judicial proceedings. A little later it was settled there was no privilege for those who published documents connected with these proceedings to the world at large.8

Footnote 3: Kenny, Criminal Law, 309-310.

Footnote 4: Cutler v, Dixon 4 Co, Rep. 14b--\*! If actions should be permitted in such cases, those who have just cause for complaint, would not dare to complain for fear of infinite vexation."

Footnote 5: Brook v, Montague (r606) Cro. Jac. go; Weston v, Dobniet (r618) ibid 432; Harding v, Bodman (r618) Hutton ir; Ram v, Lamley (r633) ibid r13; cp, Floyd v, Barker (r608) r2 Co. Rep. 23 where the judicial immunity from all actions arising out of things done in a judicial capacity is laid down in very wide terms; for the history of these rules see vol, vi 234-240.

Footnote 6: I Wms, Sanders 131.

Footnote 7: Kelyng, C.J., held that, though the exhibiting of the petition was lawful, " the printing of it was a publication to all the world, which is not lawful," ibid at p. 132; but, " after this case had depended twelve terms, now this term judgment was given for the defendant by Hale, Chief Justice, "Twysden, and Kainsford, upon mis point, namely, that it was the order and course of proceedings in Parliament to print and deliver copies etc., whereof they ought to take judicial notice," ibid at p. 133.

Footnote 8: R, v, Salisbury (r699) I Ld, Raym. 341.

## 1 Deformation as a tort 377

The idea that there could be any privilege for those who published true reports of judicial or Parliamentry proceedings had not as yet arisen.1 In fact it could not arise, till the courts had arrived at the modern distinction between absolute and qualified privilege, and had ascertained the true meaning of the latter kind of privilege ; for the privilege accorded to these reports at the present day is essentially qualified privilege, in as much as it can be rebutted, if the report can be shown to be garbled or unfair.2 During this period, we can only see faint traces of the ideas which underlie the conception of qualified privilege ; and the notion that privilege could be divided into these two classes had not as yet arisen. In a case of the year 1597, it was ruled that defamatory words spoken by the defendant of the plaintiff, in order to advise a third person upon a matter in which he had an interest, were not actionable.3 We can see here the germ of the idea which will cover most of the cases of qualified privilege in later law ; and it would seem that the law had not advanced very far beyond this stage when Blackstone wrote.4 In a case of the year 1606, we can see the germ of the idea that a statement, prima facie privileged, will lose its privilege if spoken with malice.5 But this was said of a statement which would, at the present day, be absolutely privileged, so that it is clear that the courts had as yet no idea of the modern distinction. No doubt the very wide terms in which the privilege accorded to judicial and Parliamentary proceedings was being laid down by the courts, helped to give rise to the modern conception of absolute privilege. But probably the uncertainty which, as we have seen,6 long prevailed as to the part played by malice in the tort and crime of defamation, helped to retard the recognition of the conception of qualified privilege.

Footnote 1: See Wason v. Walter (1868) L.R. 4 Q.E. at pp. 93-94 _fer_ Cockburn, C.J.; and ep. Curry v. Walter (1796) x B. and P. 525.

Footnote 2: "It is to be observed that the analogy between the case of reports of proceedings of courts of justice and those of procedings in Parliament being complete, all the limitations placed on the one to prevent injustice to individuals will necessarily attach on the other : a garbled or partial report, or of detached parts of proceedings, published with intent to injure individuals, will equally be disentitled to protection," Wason v. Walter at p. 94.

3 The plaintiff alleged that he was a merchant, and that the defendant, to discredit him, said to D, "Doth Vanspike (the plaintiff) owe you any money "? and that on D saying that he did, the defendant said, " you had best call for it ; take heed how you trust him " ; judgment was given for the defendant, " for it is not any slander to the plaintiff, but good counsel to D," Vanspike v. Cleyson, Cro, Eliza, S41.

4 Bl. Comm. iii z5, cited above 373 n. 7; but it was just about this period that the modern law was beginning to be developed by Lord Mansfield, see Weatherston v. Hawkins (1786) x T.R. ito.

5 Brook v. Montague Cro. Jac. go--'' if he (cyswest) g give in evidence anything nor, material to the issue, which is scandalous, he ought to aver it to be true, otherwise he is punishable ; for it shall be intended as spoken maliciously and without cause "; and the law so stated by March, Actions for Slaunder (ed. 16:47) 179-120.

**CIME AND TORT**

In the law of defamation, as in many other branches of the common law, the outlines of the modern law emerged during the sixteenth and seventeenth centuries. But, owing principally to the great changes effected by the introduction of printing, and to some extent to the desire of the common law courts to expand their jurisdiction, this branch of the law is, perhaps, more distinctly than any other, the creation of these two centuries. At the beginning of the period the ecclesiastical courts still retained the lion's share of this jurisdiction; and it was only in cases involving the exercise of the statutory jurisdiction over the defamation of magnates, that the common law regularly interfered. At the end of this period the criminal law of defamation, which had been created by the Star Chamber, had been taken over by the common law; and the torts of libel and slander had been established on substantially their modern basis. The law as thus settled has not been found to be wholly satisfactory in later periods in the history of the law. In the eighteenth century, political developments necessitated important changes in the criminal law; and the division of the tort of defamation into libel and slander--a division due historically to the need for finding some remedy for the mistakes made by the common law in the initial stages of the development of the tort--still disfigures the law. But the definition of the tort of libel was on the whole satisfactory; and it has formed a good starting point for the development of, and a sufficient framework, for the many detailed rules which the modern expansion of literature and journalism has necessitated. If the rules applicable to libel were applied to all kinds of defamation, and the fact that the detonation was oral, was only allowed to weigh in considering the measure of damages, no serious complaint could be made against our modern law.

\*\*SS 3.\*\*Conspiracy, Malicious Prosecution, and Maintenance

_Conspiracy and Malicious Prosecution_

We have seen that two divergent streams of doctrine have gone to the making of the law of conspiracy. (i) Statutes of the thirteenth century had provided a writ of conspiracy, which lay against two or more persons who had combined to indict or appeal another of colony, if that other had been acquitted by verdict of the jury.1 In addition, the medieval common law had developed an action on the case in the nature of conspiracy, which was generally brought for a combination to defraud the plaintiff by the

## The Modern Crime of Conspiracy 379

fraudulent use of the machinery of the courts ; and the damage, and not the conspiracy, being the gist of this, as of other actions on the case, it differed from the statutory writ in that it lay against one defendant only.1 (ii) The court of Star Chamber had enlarged the scope of the offence of conspiracy. It punished criminally, not only conspiracies to abuse the process of the courts, but also conspiracies to commit any wrongful act ;2 and we have seen that the jurisdiction which it assumed in these cases, tended to shade off into the very salutary jurisdiction which it exercised over attempts to commit crimes.3 Moreover, though it treated these conspiracies as criminal offences, it adopted, somewhat illogically, the rule applied by the common law to the action on the case, and punished a single person who had made a false accusation.4

Footnote 1: Vol. iii 405-407.

Footnote 2: Vol. v 204-205.

When the common law courts took over the jurisdiction of the Star Chamber, they found it necessary to construct a law of conspiracy on these foundations. The result of their efforts can be summed up as follows : Firstly, they adopted the wide definition of conspiracy which had grown up in the court of Star Chamber, and so created the modern crime of conspiracy ; but, as the gist of the crime was the conspiracy, they held that it could not be committed by a single person. Secondly, from the statutory writ of conspiracy and the action on the case, they developed the tort of malicious prosecution. Thirdly, at a later date it came to be thought that acts which would amount to the crime of conspiracy, would also give rise to an action in tort for conspiracy at the suit of an individual damaged thereby ; and, as the gist of this action was not the conspiracy, but the resulting damage, it followed that it would lie against a single defendant. But whether in such a case the cause of action is the conspiracy, or whether it is not rather the unlawful acts done in pursuance thereof--whether, in other words, there is any such thing as a separate tort of conspiracy, is a controverted question which has given rise to much difference of opinion.

With the history of these de:velopments I propose to deal under the following heads : (1) The modern crime of conspiracy ; (2) Malicious prosecution ; and (3) The modern tort of conspiracy.

1. _The modern crime of conspiracy._ The modern crime of conspiracy is almost entirely the result of the manner in which conspiracy was treated by the court of Star Chamber. Almost the only icea which it has borrowed from the common law is the rule, taken from the statutory writ of conspiracy, that the crime (like the crime of riot) cannot be committed by one person, though the other persons need not be specified,and may indeed be unknown.1 The other two essential features of the crime--(i) the fact that the gist of the offence is the conspiracy and not acts done in pursuance thereof, and (ii) the fact that the crime is committed if persons conspire to commit any unlawful act, or any lawful act by unlawful means--are derived ultimately from the practice of the Star Chamber.2 But these two essential features were developed by the common law courts after the Restoration; and it is of the beginnings of this development that I must speak at this point.

Footnote 1: The author is grateful to the anonymous referee for his comments on the manuscript.

Footnote 2: The author is grateful to the anonymous referee for his comments on the manuscript.

Footnote 3: The author is grateful to the anonymous referee for his comments on the manuscript.

Footnote 4: The author is grateful to the anonymous referee for his comments on the manuscript.

Footnote 5: The author is grateful to the anonymous referee for his comments on the manuscript.

Footnote 6: "A conspiracy consists not merely in the intention of two or more, but in the agreement of two or more to do an unlawful act, or to do a lawful act by unlawful means. So long as such a design rests in intention only it is not indicitable. When two agree to carry it into effect, the very plot is an act in itself, and the act of each of the parties, promise against promise, _actins contraactum_, capable of being enforced if lawful, punishable if for a criminal object or for the use of criminal means," Mulcahy v. R. (r868) L.R. 3 H, of L, at p. 317.

## The Modern Crime of Conspiracy 381

of these essential features, emphasized in the statement of Willes J., I must now say a few words.

(ii) It is well established law at the present day that the crime is committed by an agreement to do an unlawful act, or to do a lawful act by unlawful means If the act agreed to be done is a crime or a tort--at any rate a malicious tort,1 or if means are to be adopted to secure a lawful object, which involve the commission of a crime or a tort, there is no difficulty. The chief difficulty, to which the definition of the crime has given rise, consists in the fact that an act may be sufficiently unlawful to render an agreement to do it a criminal conspiracy, though it cannot be brought under any of the recognized categories of crime or tort. That this was so, was clearly recognized by the common law courts after the Restoration. In addition to conspiracies to indict maliciously, which fell under the statutory writ of conspiracy,2 and to do acts which amounted to a crime or a tort,3 conspiracies to do acts, which were neither crimes nor torts, were held to be indictable. Thus, the brewers of London were held to be guilty of conspiracy, because they had conspired to carry on their trade in such a way that the revenue was defrauded;4 and the journeyman tailors of Cambridge were likewise held to have committed this offence, because they had conspired to raise their wages.5 In the last mentioned case the court expressly laid it down that "a conspiracy of any kind is illegal, although the matter about which they conspired might have been lawful for them or any of them to do, if they had not conspired to do it, as appears in the case of \_The Tubzowen v. The Brewers of London."6 These cases were followed in later law;7 and, as Professor Kenny has pointed out, they have made it possible " for judges to treat all combinations to effect any puppose which happens to be distasteful to them as indictable crimes, by declaring this purpose to be 'unlawful."8

Footnote 8: IRAF is distributed by the National Optical Astronomy Observatory, which is operated by the Association of Universities for Research in Astronomy, Inc., under cooperative agreement with the National Science Foundation.

Footnote 9: IRAF is distributed by the National Optical Astronomy Observatory, which is operated by the Association of Universities for Research in Astronomy, Inc., under cooperative agreement with the National Science Foundation.

Footnote 10: IRAF is distributed by the National Optical Astronomy Observatory, which is operated by the Association of Universities for Research in Astronomy, Inc., under cooperative agreement with the National Science Foundation.

**382**: **Crime and Tort**

There can be little doubt that this wide definition of the crime of conspiracy originates in the criminal equity administered in the Star Chamber. We have seen that Hudson says that the Court acted as " the curious eye of the state and the king's Council, prying into the inconveniences and mischiefs which abound in the Commonwealth,"1 and that, " by the arm of sovereignty it punisheth errors creeping into the Commonwealth, which otherwise might prove dangerous and infectious diseases, or it giveth life to the execution of laws, or the performance of such things as are necessary in the Commonwealth, yea, although no positive law or continued custom of the common law giveth warrant to it."2 Clearly, it is these ideas which the common law adopted, when they held that conspiracies to do acts, which were neither crimes nor torts, were indictable. These acts were contrary to public policy, and therefore a conspiracy to effect them must be treated as a crime. This idea came naturally to the court of Star Chamber, because it was intimately allied to the Council--the governing body in the state in the sixteenth and early seventeenth centuries. It came equally naturally tc the common law courts, when the Star Chamber had been abolished, and when the common law had made good its claim to be the supreme law in the state.

Footnote 1: Star Chamber 126, cited vol. i 504.

Footnote 2: Star Chamber 107, cited vol. i 504.

Footnote 3: Vol. v 201.

It was inevitable that it should be through the law of conspiracy that the common law should apply these ideas. In the first place, it was a far more elastic crime than the older and more precisely defined offences known to the earlier common law. In the second place, the law as to the punishment of attempts to commit crimes was still rudimentary, till it was put on a more satisfactory basis by the adoption of the Star Chamber doctrines on this matter.3 A crimina' conspiracy, as defined by the Star Chamber, and an attempt to commit a crime, are closely allied;4 and an alternative method of dealing with such offences was as valuable to the common law courts as to the Star Chamber. In the third place, a combination of any kind, unless it is very carefully regulated by the state, must always (in spite of the a priori views of political speculators) be dangerous to the authority of the state, and the regular administration of its law;5 and a fortiori a combination formed to effect illegal or questionable purposes. "Leagues of the subjects of one and the same Commonwealth," says Hobbes, " where every one may obtain his right by means of the Sovereign Power, are unnecessary to the maintaining of peace and justice, and (in case the designe of them be evil or unknown

## The modern crime of conspiracy 383 to the Commonwealth) unlawfull.

For all uniting of strength by private men, is if for evill intent unjust; if for intent unknown, dangerous to the Publique, and unjustly concealed."1 And Burke agreed with him--" liberty,' he said, " when men act in bodies is power."2 This danger, inherent in combinations, was increased by the inadequacy of the police system of the seventeenth and eighteenth centuries;3 and, as we can see more clearly than the politicians of the latter half of the nineteenth century, it is not removed by a police system sufficient to guard the state against ordinary criminals.4 This is, in fact, the true reason why such a crime as conspiracy is as essential a part of the criminal law in the twentieth as in the sixteenth century.

Footnote 1: Leviathan Pt. ii c. 22 p. 122.

Footnote 2: French Revolution, g.

Footnote 3: " In days when our police system was ineffective, the law felt itself dangerously threatened by any concert among evil doers; and consequently, in the seventeenth and eighteenth centuries, indictrents against conspirators were held good very readily;" Kenny, op. cit. 290-291.

Footnote 4: " It is not a set number that makes the Assembly unlawfull, but, such a number, as the present officers are not able to suppress and bring to justice," Hobbes, Leviathan Pt. ii c. 22 p. 123.

Footnote 5: Above 54-56.

In fact, just as in the law of contract the courts used the doctrine of public policy to control certain of the activities of the citizen,5 so in the criminal law it used this wide conception of conspiracy for the same purpose. And just as in the law of contract there is a legitimate use for this doctrine, so there is a legitimate use for it in the criminal law. In both cases it is used legitimately to strike at practices and courses of conduct which are contrary to the established principles of the common law, and are obviously dangerous to the state. In both cases, because it is an elastic doctrine, it gives the law a power of so developing its principles that they are kept in touch with the needs and ideas of the age. But, in the criminal law, just as in the law of contract, it may be used illegitimately, and may become merely another name for political expediency ; and there is obviously a greater danger that it will be thus used illegitimately in the criminal law ; for in this branch of the law its action is more direct, and can be made to cover a much wider ground. There is therefore more danger that it will be used to give effect to the political prejudices of the judges; and, as we can see from the legal history of the seventeenth century,6 and from our own experience, to put judges in a position in which they can hardly avoid adjudicating upon political questions, is detrimental, both to the impartial consideration of questions of legal principle, and to their own authority.

Footnote 5: Above 54-56.

Just as it is in relation to contracts in restraint of trade that the doctrine of public policy in contract law has received its most

### 384 Crime and Tort

important application,1 so it is in relation to the freedom of employers and workmen to use their capital and labour as they please, that, in our own times, the criminal law of conspiracy has received its most striking applications. The repeal of the combination laws, and of nearly all the other laws which regulated commerce and industry, under the influence of the doctrine of laissez-faire, gave both to employers and workmen a large liberty, which they used or attempted to use in a manner destructive of liberty. And just as the large powers allowed by law to landowners, and other owners of property, necessitated the creation of a rule against perpetuities, to prevent that liberty being used to its own destruction,2 so the large liberty allowed to employers and workmen, necessitated large developments in the law of conspiracy, to guard against attempted infractions of individual liberty thereby rendered possible. But the history of the manner in which the common law attempted, by the application of the law of conspiracy, to safeguard this liberty, and of the very different solutions of the problem from time to time enforced by the Legislature, belongs to the legal history of the nineteenth and twentieth centuries. Here we need only note that, though the technical weapon was different, the policy pursued by the common law was the same as that which has resulted in the rules as to the invalidity of contracts in restraint of trade, and in the rules against perpetuities. In all these cases the policy aimed at was the removal of the danger of arbitrary restraints on freedom--on the freedom of contract, on the freedom of alienation, and on the freedom to dispose of one's capital or labour at one's will. In all, except the last and the most important of these aims, the ideas of the common law have triumphed, to the manifest advantage of the community. Whether or not it would not have been equally to the advantage of the community, if, in this last case also, the common law had triumphed, will be one of the most interesting problems awaiting the students of the political, economic, and legal history of our own times.

Footnote 1: Above 56-62, 2 Vol, vii 193-194.

The growth of this crime of conspiracy naturally gave rise to the problem whether or not a person injured by an indictable conspiracy had a right of action in tort, and, if so, what was the nature of that right of action. We shall see that this problem did not become acute in this period but, as some of the considerations relevant to its discussion do emerge, I must say a few words about it. But, before it can be profitably discussed, I must deal with the later history of the statutory writ of conspiracy, and the supplementary action on the case, and show how, from these two remedies, the modern torts of malicious prosecution, and malicious abuse of the process of the courts, have emerged.

## 1 Introduction

The discovery of the first two decades has been the first to be made by the discovery of the first 1970s \[1\]. The discovery of the first 1970s \[2\], the first 1970s \[3\], the first 1970s \[4\], the second 1970s \[5\], the second 1970s \[6\], the second 1970s \[7\], the second 1970s \[8\], the third 1970s \[9\], the third 1970s \[10\], the third 1970s \[11\], the third 1970s \[12\], the third 1970s \[13\], the third 1970s \[14\], the third 1970s \[15\], the third 1970s \[16\], the third 1970s \[17\], the third 1970s \[18\], the third 1970s \[19\], the third 1970s \[1

### Crime and tort

'have seen that in other respects they were very different.1 The main points of difference can be summarized as follows : Firstly, the statutory writ applied only to a conspiracy to indict or appeal a man of felony ; but the action on the case applied to conspiracies to accuse a man of other offences, or to harass him by the malicious abuse of the process of the courts. Secondly, a plaintiff could only use the statutory writ if he had been acquitted by verdict. If he had escaped in any other way, e.g. by reason of a defective indictment, he could not make use of the writ. But the action on the case was not fenced about by any such restrictions. Thirdly, \[ as the gist of the offence covered by the statutory writ was the conspiracy, it could not be brought against one person only ; but, as the gist of the action on the case was the resulting damage, it could be brought against one person only. We shall now see that it was the development of these three characteristics of the action on the case which eliminated the element of conspiracy, and created, from these common law remedies for conspiracy, the tort of malicious prosecution, and other torts analogous thereto.

Footnote 1: Vol. iii 405-407.

(i) The extension of the action on the case to cover all kinds of malicious conspiracies to injure another by an abuse of the process of the courts, involved (_a_) its extension to a conspiracy to accuse another of the more serious offence of treason ; (_b_) its extension to a conspiracy to accuse another of some less serious misdemeanour ; and (_c_) its extension to a conspiracy to injure another by other abuses of process.

(_a_) The question whether the statutory writ lay against persons who had maliciously conspired to indict another of treason, had not, as we have seen, been raised in the Middle Ages.2 It seems to have been raised for the first time in 1614, in the case of _Lovel v_, _Faulkner_.3 In that case Coke, C.J., and the whole court were of opinion that no such action would lie. Coke pointed out that there was no precedent for such an action--" all the precedents are pro felonia ";4 and both Coke and the court evidently considered that it would be dangerous to the safety of the state to make a precedent, as it might discourage persons from giving information of treasonable plots.6 No actual

**MALLICIOUS PROSECTION 387**

decision was given. But it is clear that this opinion was based mainly on political grounds ; and in 1623, the court, after a long argument, held, in the case of _Smith v. Cranshaw_,1 that an action would lie. The court pointed out that, though a person might be obliged to reveal treason, he was certainly not bound to accuse others _Gu_ treason falsely and maliciously ; that it would be most unreasonable if a person falsely and maliciously accused had no remedy ; and that there was no warrant in Edward I.'s statute for confining even the statutory writ to false and malicious accusations of felony. Dodderidge, J., cited a case in which such an action had been successfully brought ;2 and, as Dr. Winfield has pointed out, the Star Chamber punished persons who made such accusations falsely and maliciously.3

Footnote 1: W. Jones, 93 ; S.C. z Rolle Rep. 258.

Footnote 2: "Come fut a ore in un case de Cambridgeshire, lou un conspire ove auter pur indicter J.S. de treason, que lis font, apres l'un confesse que le auter ad subome luy, et que lis font sur ceo malice, sur que il aux confesse cpo, et conspiracy port sur ceo vers eux, et l'un est a cest jour imprison pur ceo," z Rolle Rep. at p. 260.

Footnote 3: Op. cit. 59 n. 7.

Footnote 4: "Vo'. iii q66.

Footnote 5: (1603) Cro. Jac. r30 ; cp. Bell v. Fox and Gamble (1610) Cro. Jac. r30--a case on the statutory writ.

Footnote 6: (1633) Cro. Car. 291.

Footnote 7: Thus in Henley v. Burstal (1669) Th. Raym, 18o Serjt. Maynard argued that, " when the indictment is preferred maliciously, and such indictment contains matter of imputation and slander as well as crime ; then the action lies ; but otherwise when the indictment contains crime without slander, as forfolle entry etc. ... and of that opinion was all the court "; see also Low " v. Beasdmore (1665) ibid 135, and Chamberlain v. Prescot (1639) there cited, where this view was apparently upheld by the Exchequer Chamber.

Footnote 8: "The opinion of all the judges in the case of _Sir Andrew Henley_ and _Dr. Burstall_ 1Th, Raym, 18o was, that no action will lie for falsely and maliciously

### 8.8 Crime and tort

(_c_) There are several cases in which the action on the case was brought for miscellaneous abuses of legal proceedings. Thus, it was held that the malicious suing out of a writ of fieri facias,1 or capias ad satisfaciandum,2 was a good ground for an action on the case; and, in the case in which the former point was decided, it was laid down generally that, "if a man sue me in a proper court, yet if his suit be utterly without ground of truth, and certainly known to himself, I may have an action of the case against him for the undue vacation and damage that he putteth me unto by his ill practice, though the suit itself be legal, and I cannot complain of it as it is a suit." 3 It is thus clear that the action was being used to cover many miscellaneous cases of malicious abuse of process. But it would seem that the nature of the wrongs thus redressed was as yet not nicely distinguished. In particular, the case of _Steer v. Scobe4_ shows that no clear line was as yet drawn between the acts which will constitute the tort of malicious prosecution, and those which will constitute the tort of false imprisonment.

Footnote 1: We have not been able to find a correct answer to the question of the \_Cour

**MALICIOUS PROSECTION 389**

in these circumstances. In two cases, one of Charles I.'s1 and the other of Charles II.'s reigns,2 distinction was drawn between the rule laid down in the last cited case, and cases where the indictment was bad on the face of it. In the latter class of cases it was held an action on the case would not lie, so that in these cases the rule applicable to the statutory writ and to the action on the case was the same. Possibly this distinction was drawn with a view of discouraging these actions; but it was clearly a distinction without a difference, and we shall see that it was overruled3 both by Holt, C.J., in _Savile v. Roberts4_ and by Parker, C.J., in _Jones v. Givin.5_ Thus the rule that the action on the case both for malicious indictment and for malicious abuse of legal process would lie, if the proceedings had in any way terminated in the plaintiff's favour, was established. The necessity for showing an acquittal by verdict was confined to the statutory writ, and, like that writ, became in practice absolete.

Footnote 1: Hunt v. Line (tO33), cited Jones v. Givin (t713) Gilbert Cases at p. 212,

Footnote 2: Chamberlain v. Prescot, as reported by Holt, C.J., in Savile v. Roberts (tO8) r Ltd. Raym. at p. 38o.

Footnote 3: Below 391.

Footnote 5: (1713) Gilbert Cases tO5.

Footnote 6: Vol. iii 406-407 ; Skinner v. Gunton (tO69) r Wms, Saunders at pp. 229, 230.

Footnote 7: Cro, Eliza, 7o.

Footnote 8: 'Where two or more conspire together to procure one to be indicted for felony or trespass, and he is afterwards acquitted, it shall be intended by law to be maliciously done, for which conspiracy lies ; but no action lies where one only prefers a bill of indictment; for it would be in hinderance of justice. ... Walmsley doubted thereof; for the declaration supposed it to be _malitios_," Francis Throgmorton's Case Cro. Eliza, at p. 564.

### 390 Crime and Tort

_v. Givin,1_ the struggle "' was strong and late when the prosecution was by the party suffering anc there was no conspiracy," it seems to have been settled in the course of the seventeenth century, perhaps by analogy to the practice of the Star Chamber, that an action would lie if an indictment were preferred by one only.2 Indeed, it was hardly possible to come to any other conclusion, as it was clearly settled that the action lay for malicious accusations of offences under the degree of felony, and for other malicious abuses of the process of the courts, though committed by one person only. In fact, the idea that the conspiracy to indict maliciously was the gist of the oftence had vanished with the disuse of the statutory writ of conspiracy ; and the idea that the conspiracy, as such, was an offence had become associated with the new crime of conspiracy, which, as we have seen,3 rested upon a very different basis. The result was that the wrong had come to consist, not in the conspiracy, which, if present, was only a circumstance of aggravation, but in the act of malicious prosecution, or malicious abuse of process. This fact is very clearly illustrated by the ruling in _Manning v. Fitzherbert_ in 1633,4 that, as the action was brought for the unlawful act causing damage to the plaintiff, it could not be objected to an action for such unlawful act, that different causes of action, i.e. for the unlawful act and for the conspiracy, had been improperly joined.

Footnote 1: (1713) Gilbert Cases at p, 209.

Footnote 2: See Manning v. Fitzherbert (1633) Cro, Car, 271; Carlion v, Mill (1633) Cro, Car, 291; Norris v. Palmer (1675) 2 Mod. 57; cp, Pollard v, Evans (1679) 2 Shower, 50, where the statutory writ is contrasted with the action on the case.

Footnote 3: Above 379-384.

Footnote 4: Cro. Car. 271. This was an action on the case for a false and malicious acusation of felony before a justice of the peace ; on its being moved in arrest of judgment that an action for words, and an action in the nature of a conspiracy, had been joined, the court held that, " it is not in nature of a conspiracy, but an aggravation of the false and malicious accusation."

These developments of the action on the case for conspiracy were giving rise to new varieties of tort. But, though they were all tending in this direction, the cases were neither wholly clear nor wholly consistent. Having regard to the popularity of these actions for malicious prosecution, and the danger to the proper administration of the criminal law of allowing them too freely,5 this new branch of law needed a clear and authoritative statement. This statement was furnished in 1699 by Holt, C.J., in the case of _Savile v. Roberts.6_ That case defined the conditions under which the action on the case could

**MALICIOUS PRODUCTION** **391**

be brought .for a malicious prosecution, and thus put this tort upon its modern basis.

It was in substance laid down that, to succeed in this action, the plaintiff must show, firstly, one of three sorts of damage--damage to his fair fame, damage to his person " as when a man is put in danger to lose his life limit or liberty,"1 or damage to his property "as when he is forced to expend his money in necessary charges to acquit himself of the crime of which he is accused."2 Secondly, he must show " express malice and iniquity in the prosecution."3 Thirdly, the ground of the action is not the conspiracy but the damage, and therefore the action will lie, though the indictment be preferred by a single defendant only.4 Fourthly, no action will, as a rule, lie for bringing a civil action maliciously. Under the old law the amercement of the plaintiff who thus sued was, and under the modern law the costs awarded to a successful defendant are, held to be a sufficient compensation.5 But, fifthly, the bringing of an action maliciously, or a malicious use of the process of the court, may give rise to an action on the case, if special damage be proved.6 Lastly, it was assumed, as it is assumed in all the cases both on the statutory writ of conspiracy and on the action on the case, that the proceedings must have terminated in the plaintiff's favour. All these propositions were affirmed in the elaborate judgment: of Parker, C.J., in 1713 in the case of _Jones v. Givin_," in which an elaborate historical account is given of the growth of this branch of the law.

Footnote 1: I. Ld. Raym. at p. 378.

Footnote 2: Ibid at p. 378.

Footnote 3: "The common law has made provision to hinder malicious frivolous and vexatious suits, that every plaintiff should find pledges, who were amerced if the claim was false. But that method became disused, and then to supply it, the statutes gave costs to the defendants. And though this practice of levying of amerements be disused, yet the Court must judge according to the reason of the law, and not vary their judgments by accidents. But there was no amercement upon indictments, and the party had not any remedy to reimburse himself but by action," ibid at p. 380.

Footnote 4: "If A sues an action against B for mere vacation, in some cases upon particular damage B may have an action ; but it is not enough to say that A sued him falso et maliabies, but he must show the matter of the grievance specially, so that it may appear to the Court to be manifestly vexatious," ibid ; changes in procedure have rendered this cause of action less possible, see Quartz Hill Gold Mining Co. v. Eyre (r83) r Q.B.D. at pp. 639-691 _fer_ Bowen, L.J.; but it is still possible, see Clark and Lindstell, Torts (4th ed.) 659-660.

Thus the common law tort of conspiracy, founded upon the statutory writ and the action upon the case, developed into the torts of malicious prosecution, and other malicious abuses of the process of the court. It remains to enquire whether or not the law has recognized a new tort of conspiracy, corresponding to the new crime of conspiracy which had emerged during this period.

### 392 Crime and Tort

1. _The modern tort of Conspiracy._

The question whether there is such a tort as conspiracy is essentially a modern question. Very little authority can be found on it before the latter half cf the nineteenth century; and the reason for this dearth of authority in the earlier, and its extent in the later period, is to be found in the course of the legislation as to the application of the doctrine of criminal conspiracy to the activities of combinations of employers and workmen. In 1875 the Legislature enacted that a combination to do an act in contemplation or furtherance of a trade dispute, should not be indicitable as a conspiracy, if the act committed by one person would not be a crime.1 But it was held that this enactment did not prevent a person injured by such a conspiracy from bringing a civil action for the damages caused by it.2 Hence the tort of conspiracy was brought into great prominence. But, in spite of frequent discussions and decisions in all the courts from the House of Lords downwards, neither its existence as a specific tort, nor, if it exists, its precise definition was settled till quite recently. Full discussion of the problem would here be out of place, as it is essentially a problem belonging to the legal history of the nineteenth century. But, nevertheless, the legal history of this period suggests one or two considerations, to which perhaps sufficient weight has not been attached in the many discussions to which the problem has given rise.

Footnote 1: 38, 39 Victoria c. 86 SS 3:

Technically this is a problem of the same kind as that to which I have already alluded in dealing with the history of defamation.3 A crime had been developed by the court of Star Chamber, and, on the abolition of that court, the crime as thus developed had become a common law misdemeanour. If that misdemeanour was committed, and a person was damaged thereby, could he bring an action in tort? If he cou d, what was the nature of the tort? What was the connection, if any, between the rules applicable to this tort, and older rules of the common law as to the same or similar wrongs? Were necessarily all the rules applicable to the crime applicable also to the tort?

Footnote 2: Quinn v. Leather \[roor\] A.C. at p. 542 _per_ Lord Lindley.

Footnote 3: Above 361-364:

We have seen that, in the case of defamation, the courts had come to the conclusion that, if the defamation was written, so that the crime of libel had been committed, an action in tort lay at the suit of the injured party, without the need to allege and prove special damage.4 In other words, the development of the crime of libel had given birth to the tort of libel. No doubt this decision was partly due to the extremely unsatisfactory character of the tort which had been developed in and through the action on the

## The modern tort of conspiracy 393 case.

But the technical justification for the invention of the new tort was the fact that written defamation was a crime. It would seem that exactly the same principle is applicable to conspiracy ; and in the case of _Pedro v. Barrett_ in 16971 it seems to be admitted. The report of that case runs as follows :--"A brought case against B for falsely and maliciously procuring him to be indicted for conspiracy to lay a basard child to B, of which indictment upon trial A was acquitted. After verdict for the plaintiff upon not guilty pleaded, adjudged that the action well lay, _for the conspiracy was a thing punishable at common law by fine and imprisonment._" No doubt these words were spoken of the common law action on the case for a conspiracy, which, as we have seen, developed into the tort of malicious prosecution ; but the general principle there laid down is applicable to the new crime of conspiracy, which had been taken over by the common law courts from the Star Chamber.

But, if the common law courts were to recognize a tort of conspiracy corresponding to the crime, had this tort any connection with the older tort of conspiracy remedied by the action on the case ? It would seem, at first sight, that the connection was slender. The element of conspiracy had vanished from the older tort, and that older tort had become the tort of malicious prosecution. But nevertheless the older tort left, it seems to me, one permanent legacy. The gist of the action on the case was the damage suffered ; and it was because this was the gist of the action that the element of conspiracy had been eliminated. In _Savile v, Roberts2_ it was argued that conspiracy, being "of an odious nature," was "sufficient ground for an action by itself." But to this argument Holt, C.J., replied, " that conspiracy is not the ground of these actions, but the damages done to the party ; for an action will not lie for the greatest conspiracy imaginable, if nothing be put in execution ; but if the party be damaged the action will lie." Similarly, there has never been any doubt that the gist of the tort of conspiracy corresponding to the new crime of conspiracy, if such a tort exists, is the damage suffered ; and that therefore an action for it can be brought, just as the old action could be brought, against one defendant.3

Footnote 1: r Ld. Raym, 8r. (1698) r Ld. Raym. at p. 378.

Footnote 3: Quinn v. Leathem \[190r\] A.C. at p. 542; cp, Skinner v, Gunton (1669) r Wms. Saunders at pp. 229, 230.

Now this has a very material bearing on the question whether or not all the rules applicable to the crime are also applicable to the tort. The fact that the conspiracy is the essence of the crime, while the damage is the essence of the tort, must make a great deal of difference in the rules applicable. In the case of libel,

### Crime and Tort

where the difference between the essential features of the crime and the tort are not so pronounced, the law has recognized this difference. Libel is regarded as a crime, because libels, if unpunished, tend to promote breaches of the peace ; and therefore a publication to the person defamed suffices, and the truth of the defamatory statement was not a defence, and is not now a defence, unless it is for the public benefit that the truth should be known. On the other hand, the gist of libel regarded as a tort is the damage inflicted ; and therefore the publication must be to some third person, and truth is a defence. Now it would seem that somewhat similar considerations should be applied to determine the question of the relation of the crime of conspiracy, to the right of the party injured by a conspiracy to sue in tort. In both cases we must look at the nature of the wrongs redressed by the criminal and civil remedy respectively. But the application of these considerations will not produce quite the same results as in the case of libel, because, as I have said, the essential features of conspiracy considered as a crime differ more markedly from conspiracy considered as a tort, than is the case with the crime and the tort of libel. The crime consists in the conspiracy ; but the damage is the gist of the action by the party injured by the conspiracy--the damage, that is, flowing from the unlawful acts done by each and all of the conspirators in pursuance of their joint design. What we must look at, therefore, in order to establish a cause of action, is not so much the conspiracy, as the quality of the actsand the damage flowing therefrom. It follows that the conspiracy is important, not as establishing directly a cause of action in tort, but, firstly, sometimes as showing that the acts done were unlawful, because they amounted to a criminal conspiracy ; and, secondly, always as an element in estimating the damage suffered. This seems to be the view expressed in Mr. Arthur Cohen's memorandum on the civil action of conspiracy, which was concurred in by Lord Dunedin and Sir Godfrey Lushington;1 and we shall see that the case of _Sorrell v. Smith_,2 which contains the latest pronouncement of the House of Lords on this subject, lays down the law substantially in this way.

Footnote 1: "There may be cases where the combination or conspiracy to injure is itself a misdemeanour, although the acts agreed to be done are neither actionable torts nor criminal offences. . In such cases it _may_ be said that the conspiracy which is the misdemeanour is the ground of the civil action. . These however are the only cases in which it can in propriety be said that a civil action may be maintained for conspiracy," Report of Royal Commission on Trade Disputes (1906) at p. 2o.

Footnote 2: \[rg25\] A.C. 7oo.

. But this definition of the scope of the action of conspiracy has not been reached without controversy. It may, I think, be said that two somewhat divergent views as to its scope were taken before the decision in the case of _Sorrell v. Smith_.3

## The Modern Tort of Conspiracy 395

(i) According to one set of authorities, conspiracy does not exist at all as an independent tort. The tort consists, not in the conspiracy, but in the unlawful acts causing damage done by each and all of the conspirators, This view would seem to have the support of Lord Justice Scrutton,1 of Astbury2 and McCardie, JJ.,3 and of Sir F. Pollock.4 If this conclusion be true, it would follow that conspiracy does not exist as an independent tort. The tort consists in the unlawful acts causing damage done by each and all of the parties to a conspiracy ; and the conspiracy is only important as a circumstance to .be taken into account in considering the legality of the act done, and the damage inflicted. If this be the law, the modern development of the civil remedy for acts constituting a criminal conspiracy presents a very close historical parallel to the development, during the seventeenth century, of the tort remedied by the older action on the case for a conspiracy. Just as in the case of the older remedy the element of conspiracy ceased to be the gist of the action, when it came to be seen that its gist was the damage suffered by the unlawful act of the defendant, and the tort came to consist in the commission of the unlawful act--in the malicious prosecution or the malicious abuse of the process of the courts ; so, in the case of the modern tort of conspiracy developed from the new crime of conspiracy, the cement of conspiracy ceases to be the gist of the action for exactly the same reason ; and the tort comes to consist, not in the conspiracy, but in the unlawful acts which have caused damage.

Footnote 1: "Conspiracy appears to me to become actionable when the end is unlawful and causes damage, or the means by which a lawful end is pursued are unlawful and cause damage, and not to be actionable when neither the end nor the means are unlawful. It is said that the end is unlawful if it is to cause damage to another. My comment on this is that it is not true," Ware and De Freville v. Motor Trade Association \[192I\] 3 K.B. at p. 70.

Footnote 2: "Valentine v, Hyde \[1919\] 2 Ch. at pp. 149-150.

Footnote 3: Pratt v. British Medical Association \[1919\] 1 K.B. at pp. 255-260.

Footnote 4: "Torts (zrd ed.) 327-329.

(ii) According to another set of authorities there is one case in which the existence of a conspiracy is vital to existence of a conspiracy. The clearest statement of this view is to be found in Lord Justice Atkin's judgment in the case of _Ware and De Freville v. Motor Trade Association_. The Lord Justice said: 5 " It appears to me to be beyond dispute that the effect of the two decisions in _Allen v. Flood_ and _Quinn v. Leather_ is this : that on the one hand a lawful act done by one does not become unlawful if done with an intent to injure another, whereas an otherwise lawful act done by two or more in combination doesbecome unlawful if done by two or more in combination with intent to injure another. That it is the combination to injure that makes the act unlawful is so plainly laid down in _Quinn v. Leathem_ that it seems to me useless to suggest that the fact of combination in that case was only an incidental feature of the case, and not the gist of the matter." It would seem to follow that, according to this view: the existence of a conspiracy may make acts, otherwise lawful, unlawful, if they are done with the intent to injure another person; so that, on this view, it may be contended that there is ir: this case an independent tort of conspiracy.

This year, in the case of _Sorrell v. Smith_,1 Lord Dunedin has adjudicated upon the whole matter; and it seems to me that the result of his judgment is a very skilful reconciliation of these two views.2 After expressly aproving Lord Justice Atkin's statement of the law,3 he points out that it must not be forgotten that a combination formed with intent to injure another is a criminal conspiracy, and so an unlawful act. If a civil action for conspiracy is based on the existence of a criminal conspiracy, a criminal conspiracy must be proved. Such a conspiracy exists if several persons combine to do acts (lawful or unlawful) with intent to injure another. It does not exist if they do lawful acts which injure another person, with the intent, not of injuring that other person, but only of furthering their own interests.4 It is true that in cases in which the element of conspiracy is not present, intent to injure another will not make an otherwise lawful act unlawful. But, where a conspiracy is proved to exist, it is this _nens rea_--the intent to injure--which, in the case of the crime of conspiracy, as ir. the case of other crimes, makes all the difference. It will make otherwise lawful acts done in combination criminal, and so unlawful. It comes therefore to this--an intent to injure may make acts illegal as a criminal conspiracy; and so these acts may give rise to an action in tort at the suit of the person damaged thereby, although the same acts if done by one person would give rise to no cause of action, because the existence of the conspiracy makes acts, otherwise legal, illegal. It is obvious that this manner of reconciling the authorities to some extent admits the truth of the first view, by allowing that the gist of the action is the unlawful acts causing damage, and by making the element of conspiracy essential only as proof that the acts done were unlawful--essential only, that is, in those cases in which the existence of a criminal conspiracy is the only cause of

**Maintenance**

their illegality. It follows that, as was said in 1906, it is only in these cases that " it _may_ be said that the conspiracy is the ground of the civil action."1 It is only in these cases therefore that conspiracy can be said to exist as an independent tort.

Footnote 1: Above 394 n. t. ${}^{2}$ Above 38t.

This controverted question as to the existence and ambit of the tort of conspiracy has thus, to a large extent, been settled, after half a century of keen dispute. On that settlement two observations may, I think, be made. Firstly, it assumes that the crime of conspiracy is very wide in its ambit;2 for it assumes that a combination to do any act is a criminal conspiracy, if the intent of the persons combining is to injure another. Secondly, it makes one law for the individual, and another for a combination of individuals; for it distinctly decides that acts done in combination, if done with intent to injure, are actionable, although the same acts are not actionable if done by one person. That this may lead to very anomalous results is clear; for, as Lord Lindley said in _Quinn v. Leaden,_ if one man acting alone could produce the same effects as several acting together, he ought to be liable in the same way.3 This anomaly would, it is true, have been avoided, if _Allen v. Flood4_ had been decided differently, and the views of Lord Esher in _Temperton v. Russell's_ had been upheld. But it may well be that in that case the law would have laid itself open to the criticism that it restricted unduly individual liberty of action; and it is difficult to see how any such views could be reconciled with the ratio decidendi of \_Mayor of Bradford v. Pickles_6 and \_Allen v. Flood,\_7 Probably, in the existing state of the authorities, the solution reached, though it may conceivably lead to some anomalous results, is the best compromise. At any rate it has the merit of recognizing that there is generally a danger in concerted action, which is not generally present in individual action--of recognising, in other words, the root principle upon which the whole law of conspiracy rests.

Footnote 1: Above 394 n. t. ${}^{2}$ Above 38t.

Footnote 3: " One man exercising the same control over others as these defendants had could have acted as they did, and, if he had done so, I conceive that he would have committed a wrong towards the plaintiff, for which the plaintiff could have maintained an action," \[1901\] A.C. at p. 537; cp. Sorrell v. Smith \[1925\] A.C. at p. 713 _fer_ Lord Cave, and at pp. 740-741 _fer_ Lord Summer.

Footnote 4: \[1898\] A.C., 1. ${}^{3}$ t Q.B. at pp. 728-730.

Footnote 6: \[1895\] A.C., 537; below 448. ${}^{7}$ \[1693\] A.C., t.

Footnote 7: \[1895\] A.C., 537; below 448. ${}^{8}$ \[1693\] A.C., t.

_Maintenance_

I have already spoken of the medieval development of the offence of maintenance. We have seen that, as the result of that development, it had become a recognized offence redressible both by a criminal and a civil remedy; and that, when Coke wrote, it

### 398 Crime and Tort

had assumed substantially its modern form.1 That it had then assumed its modern form was due principally to three causes. In the first place, we have seen that the jurisdiction of the Council and the Star Chamber had sternly repressed those abuses of legal procedure, which had made maintenance one of the most crying evils of the later medieval period.2 In the second place, changes in the law of procedure, and more especially the beginnings of the modern law of evidence,3 had rendered obsolete some of the medieval cases, which had laid it down that the mere giving of unsolicited testimony would amount to maintenance.4 In the third place, we have seen that it was beginning to be recognized that it was not every assignment of a chose in action which could be attacked on the ground of maintenance.5 It is true that reminiscences of the period when maintenance was so crying an evil, that to relax in any way these rules as to non-assignability, would have operated to increase it, lived on in this branch of the law long after it had become a comparatively rare offence;6 and it is true also that the fact that many of the older rules were obviously ill suited to a more settled age sometimes induced judges to speak as if they thought that it was a semi-obsolete offence.7 But though, for these three reasons, the offence had both altered its character and become far less frequent, it is an offence which in any politica society is as ineradicable as larceny or homicide. Therefore a thin stream of cases, from the seventeenth to the twentieth century, has recognized it, and defined its modern incidents.

Footnote 1: Vol. iii 395-399.

Footnote 2: Vol. v 2003-203.

Footnote 3: Vol. iv. c. 7 SS x.

Footnote 4: Vol. i 334-335; vol. iii 398.

Footnote 5: Vol. vi 536.

Footnote 6: Ibid 533, 535-7.

It is a commonplace of legal history that the form of the remedies given to redress a particular wrong, or assert a particular right, has had a decisive influence in settling the form and content of that wrong or that right. But it is no less true that changes in political and social conditions have often affected the litigant's choice of the remedies open to him; and thus the disuse of some of the remedies provided by the law, and the more extended use of others, have operated to make a change in the character of the wrong redressed, or the right protected, by these remedies. We get a particularly good illustration of this process of development in the case of maintenance. We have seen that, all through the Middle Ages, and right down to Henry VIII.'s reign, it was treated as a criminal offence, for which the offender could be punished, or for which (under Henry VIII.'s statute) an action for a penalty could be brought.8 But we have seen that,Maintenance 399

during the Middle Ages, it was recognized that it could also be redressed by an action at the suit of the party.1 The law is so stated by Coke in the seventeenth century,2 and by Hawkins in the eighteenth century;3 and, when maintenance ceased to be so crying an evil, the criminal remedy (though still available) tended to drop out, and to be replaced by the action for damages. Thus in modern law maintenance came to be regarded as a tort rather than as a crime. Naturally the question arises, what is the nature of this tort?

Footnote 1: Vol, iii 397-398. 2 Second Instit, 208.

Footnote 3: " All offenders of this kind are not only liable to an action of maintenance at the suit of the party grieved, wherein they shall render such damages as shall be answerable to the injury done to the plaintiff, but also they may be indicted as offenders against public justice," P.C. Bk. i c. 83 SS 35.

No doubt its main essential features are the same as those of the crime. We have seen that the definition of the offence, both at common law and according to the law administered in the Star Chamber, and the cases in which, on account of relationship or otherwise, maintenance was justifiable, were substantially settled at the beginning of the seventeenth century.4 But the question still remains whether all the essential features of the tort redressible by the civil action, are the same as the criminal offence created by that long line of medieval statutes which end with the statute of 1540.5 This, it will be observed, is a problem of a very similar kind to that with which we have been faced in dealing with the history of defamation 6 and conspiracy.:7 All the conditions of the problem are not, it 's true, exactly the same. In the first two cases we have two lines of development--a line of development, mainly civil, in the common law courts, and a line of development, mainly criminal, in the Star Chamber; and we were obliged to consider the relation between the criminal offence developed in the latter court, and the civil offence which was later developed from it. In the case of maintenance we have an offence created by statutes, which were enforced both by the common law courts and the court: of Star Chamber; and this offence could be treated as either a criminal offence punishable on an indictment, or as a civil wrong redressible by an action for damages. Gradually the criminal remedy dropped out, and the offence came to be treated as a tort redressible by an action for damages. In the first two cases the civil action was clearly an action on the case, in which damage was the gist of the action; but in the case of maintenance it was not certain that the civil action was not an action in the nature of an action for trespass, in which nominal damages could be recovered. But, in spite of these differences, in all these cases the problem raised was the same--whether or not all the features of the tort were the same as all the features of the criminal offence.

Curiously enough this problem was not fully considered by the courts till 1919, when it was raised by the case of _Neville v. the London Express Neevspaper Ltd.1_ That case raised the two closely connected questions (i) whether an action for maintenance would lie in the absence of proof of special damage ; and (ii) whether the success of the maintained litigation was a bar to the action.

(i) On principle it would seem that, if the civil action for maintenance is to be regarded as an action in the nature of an action on the case, damage is its gist ; and that, on that hypothesis, the decision of the majority of the House of Lords,2 that the action did not lie in the absence of the proof of special damage was right. The opinion of the two dissentient lords seems to have proceeded on the ground that, maintenance being admittedly illegal, the law should give a right of action in tort for nominal damages as in the case of trespass or libel, " since the mere invasion of the plaintiff's legal right imports damage, and is sufficient to maintain the action." But the fact that conduct is illegal, or even criminal, does not necessarily prove that an action in tort for nominal damages will lie. This is clearly the law in the case of conspiracy, as the passage from the case of _Savile v. Roberts,4_ cited above, and the modern cases 5 show. No doubt an opposite conclusion was come to in the case of libel. But that, as we have seen,6 was largely due to the need for remedying the defects of the common law action on the case, which had wholly failed to provide a satisfactory civil remedy for defamation. The action is, as we have seen, somewhat anomalous ; and the fact that an action on the case for defamation lies for nominal damages is the result of the peculiar history of this tort. On the other hand, if the civil action is to be regarded, not as an action on the case, but: as a statutory or common law action analogous to trespass, there is a good deal more to be said for the view that an action would lie for nominal damages. The obscurity which hangs about the nature of the civil action naturally gives rise to differences of opinion. But, on the whole, whatever the earlier law may have been, the action of maintenance had probably come, in the eighteenth century, to be regarded as similar to other actions on the case ; and, if that be so, the general rule is that laid down by Holt, C.J., in _Savile v. Roberts._ It follows that the general

## Maintenance

rule was quite properly applied by the majority of the House of Lords to the case of maintenance.

(ii) On the other hand, the reasons given by the majority of the House of Lords for holding that the success of the maintained action is not a bar to a right of action for maintenance, are by no means convincing. They proceed mainly on the ground that, as all maintenance is a wrong, the success or failure of the action maintained can have nothing to do with the question whether or no a wrong was committed.1 But, to argue from the proposition that maintenance is a wrong, to the conclusion that a plaintiff can sue for damages, in a case where the action or defence maintained was just, comes very near to contradicting the rule, upheld by the majority of the House, that such an action will not lie for nominal damages. It may well be that maintenance is a wrong, and that the criminal offence is committed, whether or no the maintained litigation has succeeded or failed.2 It may well be that the same conclusion follows, if maintenance is a tort like trespass, for which an action will lie for nominal damages. But, if it is only a tort when accompanied by special damage, if the damage, that is, is the gist of the action, it does not follow that, because the crime is committed, the tort is likewise committed, when the maintained litigation has succeeded. We have seen that, in the case of the torts both of libel and conspiracy, it does not follow that, because the crime has been committed, the tort has also been committed. In both cases the conditions under which an action of tort will lie differ from the conditions under which an indictment can be preferred. Lord Phillimore, one of the Lords who disentent from the majority of the House on this point, very properly used the analogy of libel to illustrate his argument; 3 and he might equally well have used the analogy of conspiracy. The result is that the House has committed itself to two rules which, if not actually contradictory, are extremely hard to reconcile. For, though the success of the maintained litigation is not a bar to the action, it is clear that its success will generally prevent the plaintiff from claiming anything but nominal damages; 4 and for nominal damages, the action, according to the first proposition, does not lie.

Footnote 1: See \[1919\] A.C. at pp. 383-386, 392-393 397-404.

Footnote 2: Coke, dealing with the case of one who had laboured a jury, says, \*\* and whether the jury pass for his side or no, or whether the jury give any verdict at all, yet he shall be _punishid_ as a maintainor or embraceor either at the suit of the king or party," Co. Litt. 369a; from the use of the word \*\* punished \*\*" it would seem that Coke is referring to the criminal remedy.

Footnote 3: \[1919\] A.C. at p. 434.

Footnote 4: See ibid at pp. 380-387, 393, 395.

VOL. VIII. -26

### 402 Crime and tort

law of crime and tort in the seventeenth century had raised in the case both of defamation and conspiracy. Given an offence which was a crime, on what conditons could a person injured by the crime sue in tort for any damage which he had suffered? If it had looked at the question in its proper historical perspective, it could hardly have avoided coming to a less contradictory conclusion than that at which it has actually arrived; for it would have avoided the error into which, as it seems to me, many of the Lords fell, of supposing that because an act is a crime, the same act must, without qualification, necessarily be a tort. If it had grasped this principle it would probably have ruled that, just as the conditions under which the tort and crime of libel or conspiracy can be committed differ, so do the conditions applicable to the tort and crime of maintenance; that just as publication to a third party is needed to constitute the tort, though not the crime of libel, and just as an act causing damage to the plaintiff is needed to constitute the tort, though not the crime of conspiracy; so the failure of the maintained litigation is needed to constitute the tort, though not the crime, of maintenance.

## 4 Legal Doctrines Resulting from the Laws against Religious Non-Conformity

In the preceding volumes of this work I have given some account of the statutes which penalized various forms of non-conformity to the established church.1 In this section I propose to give some account of the developments of legal doctrine to which these statutes helped to give rise, and of the corresponding changes in that doctrine which followed upon their repeal.

Footnote 1: Vol. i 676-679; vol. iv 491-496, 506-507; vol. vi 196-203, 404.

The result of these statutes was to create a number of offences, which may be called offences against either the religion of the state, or the Christian religion in general. If we look at the dates at which they were enacted, it will be clear that the history of these offences, regarded as offences against the law of the state, as distinct from offences against the ecclesiastical law, does not begin till the Reformation period. During the Middle Ages such offences were essentially matters for the ecclesiastical law, and the function of the state was limited to lending the strength of its secular arm to enforce the decrees of the church. We have seen that the state recognized and obeyed the law of the church, which, till the Reformation, was the papal canon law;2 and that it was because it so recognized it that the writ de haretico comburendo must be regarded as existing at common law.3 The fact

**RELIGIOUS NON-CONFORMITITY 403**

that the Reformation of the English church was carried through with the minimum of change, so that the thesis of its continuity could be maintained both by lawyers and ecclesiastics \[1\]; and the fact that English law, during the sixteenth and seventeenth centuries, was likewise continuously developed from its mediaval principles--ensured that, at the cutset, the attitude of the law towards these offences against religion should be essentially mediaval. During the Tudor period, as in the mediaval period, Church and State were regarded, from many points of view, as a single society which had many common objects \[2\]; and the two members of that single society were still regarded as bound to give one another assistance in carrying out those common objects. The church must help the state to maintain its authority, and the state must help the church to punish non-conformists and infidels. The church was the church of the state, and membership of it was therefore a condition precedent for full rights in the state ; the king was the supreme governor: of the church \[3\]; and the law of the church was the king's ecclesiasticl law \[4\]. But, if the church is thus regarded as an integral part of the state, if the church's law is as much the king's law as the law of the state, a fortiori Christianity must be regarded as part of the law of England. In fact, not only Christianity, but also that particular variety of Christianity taught by the Anglican church, was part of that law \[5\].

In our day this theory of the relationship between Church and State has almost entirely disappeared. It is true that there is still an established church ; that the king is still its supreme governor and the defender of its faith ; that its law is still the king's ecclesiasticl law, and an integral part of the law of England \[6\]. But, like many other parts of the law and constitution of England, these are survivals of an older order, from which all real meaning has departed, with the abandonment of

### Crime and Tori

that medieval theory of the relationship of Church to State, to which they owed their origin.1 That that theory has been completely abandoned is clear from the fact that the state now assumes the attitude of a Gallio to religion. It gives an equal measure of protection to all sets, whether religious or anti-religious, provided that their tenets do not involve a breach of its laws civil or criminal. It refuses to favour one more than another; and practically the only coercive authority which it exercises, is in respect of those whose methods of propaganda are sufficiently coarse and offensive to bring them within the modern rules of the criminal law relating to blasphemous libel.

Footnote 1: Below 416-417.

This vast change in the relations of Church and State has been mainly the result of that policy of "conservatism combined with concession," which has been pursued during the nineteenth century.2 But that policy has its roots in the past; and the modern relations of Church and State are in fact the result of some four centuries of its application. Its application has necessarily involved many statutory changes in the law, and many gradual modifications in the technical doctrines of the law to correspond with the statutory changes; and, as the result of the modifications of these technical doctrines, changes in the attitude of the courts to the interpretation of the statutes. Therefore, in relating the history of these changes both of the statute law and of the technical doctrines of English law, we must take account of many diverse lines of development, which have operated at different periods. If we look at these lines of development from the point of view of their chronological order, we can, I think, sum them up briefly as follows:

Footnote 2: Dicey, Law and Public Opinion (rst ed.) 316--" In all ecclesiastical matters Englishmen have favoured a policy of conservatism combined with concession. Conservatism has here meant deference for the convictions, sentiments, or prejudices of churchmen, whenever respect for ecclesiastical feeling did not cause palpable inconvenience to laymen, or was not inconsistent with obedience to the clearly expressed will of the nation. Concession has meant readiness to sacrifice the privileges, or defy the principles, dear to churchmen, whenever the maintenance thereof was inconsistent with the abolition of patent abuses, the removal of grievances, or the carrying out of reforms demanded by classes sufficiently powerful to represent the voice, or to command the acquiscence of the country."

Till the outbreak of the Great Rebellion, the part played by the ecclesiastical law in the repression of all offences against religion, was by no means inconsiderable.3 It did not indeed play so large a part as in the Middle Ages; for it was controlled by statutes, which were enforced by the common law courts, and it was both controlled and supplemented by the rules and doctrines of the common law.4 We have seen that, in the latter half of the seventeenth century, the influence of the ecclesiastical

## 6 Religious non-conformity 405

law rapidly declined \[1\]. This was partly due to the dislike of allowing to the ecclesiastical courts any coercive authority over laymen--a dislike which found expression in statutory changes which crippled this part of the jurisdiction of these courts, and practically limited it to a jurisdiction over the clergy \[2\]. Partly also it was due to the increased control of the common law courts. But, for a considerable time, the law administered by these common law courts maintained much of the spirit of the old system. The statute law had made even Christian non-conformity illegal, and had penalized the various sets, whether Protestant or Roman Catholic, in different ways and degrees \[3\]. A fortiori any anti-Christian propaganda must be regarded as illegal \[4\]. Though a small breach had been made in this system by the Toleration Act of 1689 \[5\], and by the liberal way in which it was interpreted \[6\], it continued to be the foundation upon which the law rested till the beginning of the nineteenth century. But, during the earlier half of the nineteenth century, a still larger breach was made by the repeal of nearly all the older statutes which penalized Christian, and even non-Christian, nonconformity \[7\]. Very few restrictions were left upon the holding and exercise of any kind of religious belief. But, except as modified by these statutes, the common law rules, criminal and civil, as to the illegality of the expression and teaching of definitely anti-Christian beliefs, were left untouched. There had been no formal change in these rules, which were founded on the principle that, as Christianity was part of the law, any attack on it was unlawful \[8\]. It was however inevitable that, in the atmosphere of universal toleration, which was partly the cause and partly the effect of these statutes, these common law rules and doctrines should change their form and scope. \[t came to be thought that the expression and teaching of anti-Christian beliefs was only criminal if it amounted to blasphemous libel, and that the reverend questioning of those beliefs entailed no criminal liability \[9\]. In the twentieth century the propagation of these beliefs was held to be lawful for all purposes, so that it has become possible to establish a trust for their maintenance \[10\]. Lastly, these changes in common law doctrine have reacted on the manner in which some of the earlier statutes, which gave only a modified relief to Roman Catholics, have been interpreted ; with the result that the modifications and restrictions contained in these statutes have been, to all intents and purposes, rendered nugatory \[11\].

**406**: **Crime and tort**

It will be clear from this summary of the development of this branch of the law, that its history falls into certain well-marked periods. They can be classified as follows:--(1) The relation between law and religion in the seventeenth and eighteen centuries ; (2) the new situation created by the repeal or modification of the legislation against religious nonconformity; (3) the effect of this new situation upon legal doctrines as to the relation between law and religion; (4) the effect of this new common law doctrine upon the interpretation of the older legislation. Under these four heads I propose to sketch the history of the development of this branch of the law.

(1) _The relation between law and religion in the seventeenth and eighteenth centuries._

During the whole of this period the relations between law and religion retained something of their medieval character, in that the law considered it to be unlawful (except in so far as it might be permitted by statute) to express or to teach religious opinions contrary to those of the established church ; and a fortiori to express or teach anti-Christian doctrine. But, long before the end of this period, the manner in which these principles were safeguarded was anything but medieval ; for their maintenance had passed from the ecclesiastical courts to the ordinary courts of law and equity. $\\Lambda$nd the result had been a slight, but only a slight, weakening of their rigidity.

Throughout this period it fell to the ordinary courts to apply the many statutes which penalized the nonconformist, whether Protestant or Roman Catholic. While these statutes were in force, the expression of these opinions was not only illegal, but in many cases criminal; so that no contract or trust, which was designed to help the propagation of these opinions, was lawful. The only exception made to this legislation were the provisions of the Toleration Act of 1689,1 in favour of certain sects of Protestant nonconformists. With this Act and its interpretation I shall deal under the following head.2

Footnote 1: I william and Mary c. 18.

During the earlier half o' the seventeenth century, the courts of common law were assisted by the ecclesiastical courts, and more especially by the court of High Commission.3 All these courts exercised, as we have seen, an extensive jurisdiction over heresies of all kinds ; and, as late as 1612, in the case of Legate, a writ of de haeretico chomberado issued, and the heretic was burned.4 In fact in 1618 in _Atawoods Case_,5 the court of King's Bench ruled that the uttering of sca

## 11 Religious non-conformity 407

religion, was certainly not a matter over which the justices of the peace had jurisdiction, and inclined to the view that such a case should have come before the High Commission. In _Traske's Case_,1 though the Star Chamber sentered the accused for maintaining theses that the Jewish and not the Christian sabbath should be observed, and that pork should be avoided, they expressly did so because the preaching of these opinions tended " to sedition and commotion," and scandalized the king, the bishops and the clergy. The offence of holding these heretical opinions, they held, was "examinable in the ecclesiastical courts and not here."2 We have seen that the High Commission was abolished in 1641 ; 3 and that it was not restored with the other ecclesiastical courts at the Restoration.4 We have seen, too, that the ecclesiastical courts lost in 1677 their right to inflict capital punishment; and that after that date their jurisdiction over the heretical opinions of laymen disappeared.5

Footnote 1: (16f8) Hob. 236.

Footnote 2: " Now he being called ore tenus, was sentenced to fine and imprisonment, not for holding those opinions (for those were examinable in the ecclesiastical courts and not here) but for making of conventies ad and factions by that means, which may tend to sedition and commotion, and for scandalizing the King, the bishops, and the clergy."

But, during the latter half of the seventeenth century, the courts of common law stepped into the breach. They had long enforced the statutes against religious nonconformity. They now took over the jurisdiction of the Star Chamber as a 'censororum,' and punished gross indecency, ribaldry, and blasphemy on the same principles as those on which the Star Chamber had proceeded. They also took over some part of the jurisdiction of the ecclesiastical courts, and punished the expression of infidel opinions, both on the ground that they tended to sedition and commotion, and on the ground that it was contrary to law to attack the foundations of the Christian faith. One or two cases of the late seventeenth and eighteenth centuries will show the principles upon which they proceeded.

In 1663 Sedley was indicted for gross indecency, against the king's peace, and to the great scandal of Christianity.6 The court of King's Bench expressly claimed to have inherited the Star Chamber jurisdiction as custos morum, and also to punish profane actions which were wholly contray to Christianity.7 In 1676 the King's Bench laid it down that the speaking of blasphemous words was criminal, both as an offence against religion, and as an offenceagainst the state.1 The state and religion were regarded as allies who must stand together to preserve the social order, so that to speak against religion was as much an offence as to speak against the state. " To say," said Hale, "'that religion is a cheat, is to dissolve all those obligations whereby the civil societies are preserved." "'Christianity is parcel of the laws of England ; and therefore to reproach the Christian religion is to speak in subversion of the law."2 These cases were followed. In 1721 a person was indicted for a libel against the Trinity,3 and it appears that he was convicted and sentenced.4 In 1729 a person was convicted for blasphemous discourses on the miracles, "and the court declared that they would not suffer it to bc dc-bated whether to write against Christianity in general was not an offence punishable in the temporal courts at common law."5 "Christianity," said Raymond, C.J.,6 "is parcel of the common law of England, and therefore to be protected by it ; now whatever strikes at the very root of Christianity, tends manifestly to the dissolution of civil government, and so was the opinion of my Lord Hale in _Taylor's Case_." In 1763 there was another conviction for a blasphemous libel.7

Footnote 1: The author is grateful to the anonymous referee for his comments.

Footnote 2: The author is grateful to the anonymous referee for his comments.

Footnote 3: The author is grateful to the anonymous referee for his comments.

Footnote 4: In R. v. Curl (1727) r Str. at p. 790, it was stated that Hall was convicted and was then in custody.

Footnote 5: R. v. Woolston 2 Str. 834.

Footnote 6: S.C. FitzGibbon at p. 65.

Footnote 7: R. v. Annet, r W. Bl. 395.

Footnote 8: P.C. Bk. r c. 5.

Footnote 9: 9 William III. c. 35.

Footnote 10: See Attorney-General v. Peason (1817) 3 Mer. at pp. 406-408 _per_ Lord Eldon C.

Footnote 11: See Bowman v. The Secular Society \[1917\] A.C. at p. 446, _per_ Lord Parker.

Footnote 12: "This is grounded upon the case that the government bath, or ought to have, by the constitution of the government itself, of the Christian religion, which I conceive is the main end of government. The profession and preservation of Christianity is of so high a nature that of itself it supersedes all law : if any law be made against any point

**RELIGIOUS NON-CONFORMIMITITY 409**

"Christianity," says Blackstone, "'s part of the law of England ;" and therefore, in addition to the laws which safeguarded the position of the established church, and penalized nonconformity with it, the law must punish such offences as apostasy and blasphemy.'

And this conception was logically followed out. Because any attempt to propagate beliefs inimical to Christianity was a criminal offence, a trust for any sect which professed such beliefs was illegal and void. In 1684 a trust to pay a sum of money to ministers ejected for nonconformity was declared to be void ; 2 and, in the case of _De Costa v. De Pas_ in 1744,3 Lord Hardwicke refused to enforce a trust for the " maintenance of a 'Jesiba,' or assembly for daily reading the Jewish law, and for advancing and propagating their holy religion." " The intent of this bequest,' he said, " must be taken to be in contradiction to the Christian religion, which is a part of the law of the land, which is so laid down by Lord Hale and Lord Raymond ; and it undoubtedly is so ; for the constitution and poicy of this nation is founded thereon."

Footnote 2: The author is grateful to the anonymous referee for his constructive support.

Footnote 3: The author is grateful to the anonymous referee for his constructive support.

It is true that common law doctrine had made some little progress in the direction of toleration. In _Calvin's Case_ Coke had given utterance to the very medieval sentiment that all infields are in law perpetual enemies, " for between them, as with the devils, whose subjects they be, and the Christian, there is perpetual hostility and can be no peace." 4 But this idea had been repudiated by Littleton in Charles I.'s reign ; 5 and it was obviously contrary to the commercial interests of a country which was beginning to conduct a prosperous trade with infields.6 Thenagain, in _R. v. Woolston_, the court said that, though to write against Christianity in geneal was an offence, " they did not intend to include disputes between learned men upon particular controverted points."1 We shall see, too, that the manner in which the Toleration Act of 168$\\lx@sectionsign$ was interpreted, is evidence of the growth of a more tolerant spirit.2 Still, when all deductions have been made, there can be little doubt that, during this period, Christianity was regarded as so integral a part of the law, that any attack on it was an offence, and that no disposition of property designed to propagate anti-Christian views would be upheld. That this was then the law was almost admitted by Lord Colridge, C.J., in _R. v. Raussey and Foote_,3 in which, as wc shall see,4 a very different rule of law was laid down. No doubt he endeavours to explain some of these cases away, but, as Stephen, J., has shown, wih very little success.5 I think that Stephen is quite right in asserting that, in this period, the judges, when they held that Christianity was part of the law, meant to hold that it was "a crime either to deny the truth of the fundamental doctrines of the Christian religion, or to hold them up to ridicule or contempt."6

Footnote 1: (1729) 2 Str. 834.

Footnote 3: 3: 4: Now according to the old law, or the dita of the judges in old times, the passages would undoubtedly be blaiphemous libels, because they asperse the truth of Christianity. But . I think that these old cases can no longer be taken to be a statement of the law at the present day," R. v. Ramsay and Foote (1883) 15 Cox C.C. at pp. 234-235.

Footnote 4: Below 415.

Footnote 5: Fortnightly Rev. xxi 289 sqq.; Stephen, H.C.L. ii 470-476.

Footnote 6: Fortnightly Rev. xxi 293 ; ou as he puts it at pp. 293-294, "the theory is as plain and concise as possible; the truth of some of the fundamental doctrines of Christianity is essential to the welfare of society; therefore everyone shall be punished who denies, reviles, or ditclules them."

We must now turn to the history of the way in which this principle was gradually undermined. We shall see that the first really decisive steps in this direction were taken by the Legislature ; and that this legislation was made the more effectual by the rapid growth of the spirit of toleration among the more educated classes during the eighteenth, and the earlier part of the nineteenth, centuries.

(2) _The new situation created by the repeal or modification of the legislation against religions nonconformity_.

The first modification of the legislation against religious nonconformity was the Toleraton Act of 1689.7 We have seen that it was the services rendered by the Protestant nonconformists to the cause of the Revolution, which secured for them this measure of relief from the disabilities under which they suffered.8 In form

## 11 Religious Non-Conformity 411

the concessions granted by the Act were not large. It simply, as its title says, "exempted their Majesties' Protestant subjects dissenting from the Church of England from the penalties of certain laws." But, as a necessary consequence, it legalized their meetings for worship, provided they were not held behind locked doors; and it provided penalties for those who disturbed these meetings. In addition, it exempted nonconformist ministers from jury service, and service in certain parochial offices, and it allowed Quakers to make a declaration instead of taking an oath. The Act did not extend either to Roman Catholics or to Unitarians. The courts interpreted the Act liberally. It was held that its effect was to render the worship of the sets coming within the protection of the Act legal for all purposes,1 so that a trust for the maintenance of their teaching could be enforced by the court, or, in a suitable case, a mandamus could issue to enforce the legal rights of a minister to be admitted to office.2

Footnote 1: Attorney-General v. Pearson (1817) 3 Mer. at pp. 409-410 per Lord Eldon; it was said by Lord Mansfield in Evans's Case that the protecting clauses of the Toleration Act had put the worship of the Protestant dissentent, "not merely under the connivance, but under the protection of the hw--have established it," cited 3 Mer. 375 n.; for Evans's Case see App. to Furnaux's letters to Blackstone, and Burn Ecl. Law ii 207; see also the passage cited by Lond Buckmaster in Bourne v. Keane \[1919\] A.C. at pp. 866-867.

No further statute was passed to legalize the worship of other Protestant nonconformists for more than a century. In 1813 the Unitarians were given the same privileges as had been accorded to Protestant nonconformists by the Toleration Act of 1689; and so much of the blasphemy Act of 1698, as related to the denial of the doctrine of the Trinity, was repealed.3 But Lord Eldon had grave doubts whether this Act in favour o: the Unitarians, could be given the same extensive interpretation as had been given to the Act of 1689 in favour of other Protestant nonconformists. His view was that, though the penalties for the maintenance of these opinions had been removed, the impugning of the doctrine of the Trinity was still "an offence indictable by the common law"; so that a trust to propagate such doctrines was not enforceable.4 In this respect, therefore, a trust to propagate an opinion which he regarded as anti-Christian, differed from a trust to propagate opinions which, though not conformable to the doctrines of the Church of England, were Christian. But this restricted view of the Act was dissented from in 1842. The judges, in the opinions which they

### Crime and tort

gave to the House of Lords in the case of _Shore v. Wilson_,1 held that no such distinction could be drawn between the enforceability of a trust for the propagation of Unitarian tenets, and the tenets of any other sect of Protestant nonconformists.

Footnote 1: $Q$ Cl. and Fin. 355; at p. 578 \_T_indal, C.J., said, " that Unitarian preachers and their widows, and other persons professing Unitarian doctrines are capable at the present day of receiving the benefit of charities. . . I consider, since the statute of 53 Geo. 3. c. 160, all distinction between Unitarians and other Protestant Dissenters as to this purpose is by law taken away."

In 1832 Roman Catholics were put on the same footing as Protestant dissenters, in respect to " their schools, places for religious worship, education, and charitable purposes." 4 But the Act was not to affect the provisions in the Act of 1829 as to the suppression of Jesuits and other religious orders.5 It was held, however, in the case of _West v. Shuttleworth_,6 that this Act did not operate to validate trusts for the maintenance of superstitious purposes, such as masses for the dead. In fact, the Act of Edward VI.,7 which, in suppressing certain superstitious uses then existing, had in its preamble declared the illegality of such uses, had long been considered as having had somewhat the same effect in defining what was a superstitious use, as the preamble of the statute of 16018 had in defining what was a charitable use. This was the view taken of the preamble to the Act in _Adams and Lambert's Case_ in 1602.9 It was followed by Duke in his book on Charitable Uses,10 and, it would seem, was approved as established

## 6 Religious Non-Conformity 413

law by Lord Hardwicke in _De Cosa v. De Pas_,1 Having regard to these authorities, the decision in \_West v. Shuttleworth_2 was inevitable ; and it was followed in later cases.3 In 1860, when the Legislature gave a larger measure of protection to Roman Catholic charities, it assumed that trusts for superstitious uses were still illegal ;4 and when it assumed the illegality of these superstitious uses, it must obviously have used the term superstitious use in the sense in which it had been judicially interpreted. The result of this legislation, therefore, was to remove all penalties and disabilities affecting Roman Catholics, and to legalize, not entirely, but to a very large extent, trusts for the propagation and maintenance of their worship.

Footnote 1: "The objection is, that this is a superstitious use, and so that the bequest must go to the crown ; but in answer to this it is sad, that that can only be in cases that are within the statute of Edward VI. But the cases have gone further," a Swanst. 487 note.

Footnote 2: (t835) 2 My. and K. 684.

Footnote 3: Attorney-General v. Fishmongers Co. (t841) 5 My. and Cr. rr; Heath v. Chapman (t854) 2 Dr. 417.

Footnote 4: 23, 24 Victoria: t34 SS 1. \*9, to Victoria c. 59. * 8 2.

Footnote \*: See Clarke v. Bradlaugh (t83r) 7 Q.B.D. at pp. 58-61 _fer_ Lush, J., for a good account of this matter.

In 1846 * the Jews had been relieved from their disabilities by an Act, which repealed a number ofother disabilities and penalties, which earlier legislation had impcsed on various classes of non-conformists. Moreover, with respect to their schools, places for worship, education, and charitable purposes, they had been put on the same footing as Protestant nonconformists.6

Footnote 8: R. v. Carlile (t87g) r S.T.N.S. 1390, 4 S.T.N.S. 1423 ; R. v. Waddington (t822) x S.T.N.S. 1368-1369 ; see also R. v. Moxon (t841) 4 S.T.N.S. 694.

It will be observed that this legislation contained nothing whatever affecting the position of the atheist, or person who professed no religious belief; and the curious history of the manner in which such persons were gradually allowed on all occasions to affirm instead of taking an oath--a history which in its later stages is connected with the name of Bradlaugh--illustrates the reluctance of a Legislature, which was still, almost unconsciously, under the influence of the ideas embodied in the dictum that Christianity was part of the law, to make any concessions to them.7 Naturally, therefore, during the earlier part of the nineteenth century, it was still held that those who denied the truth of all religion, including the Christian religion, were guilty o: a criminal offence. There are a series of such cases in which the old principle was laid down as good law.8 In fact, as late as t841, on an indictment for blackghemous libel, Lord Denman, C.J., told the jury that, "if they thought that the libel tended to question cr cast disgrace upon the Old Testament it was a libel";9 and, in the decision of the court on amotion in arrest of judgment, substantially the old principle, that a reflection on Christianity in general is indictable, is laid down. It followed also that all attempted dispositions of property, and other transactions, having fo: their object the propagation of such opinions, were void. Thus in 1850, in the case of _Briggs v. Hartley_,1 it was held that a trust which contemplated an object inconsistent with Christianity failed; and in 1867, in the case of _Cowan v, Milbourn_, it was held that a contract to let a lecture room for an anti-Christian lecture was void for illegality.2

Footnote 1: 1g L.J. Ch. 416-417; cf. Murray v. Benbow (1832) 4 S.T.N.S. 1409--the famous case in which Lord Eldon refused to issue an injunction to restrain the publication of a pirated copy of Byron's Cain; see also the authorities cited by Lord Finlay in Bowman v. The Secular Society \[19:7\] A.C. at p. 430.

Footnote 2: 2 L.R, 2 Ex. 230.

But, some time before _Cowan v. Milbourn_ had been decided, the feeling in favour of a more universal tolerance, which was partly the cause and partly the effect of the legislation which I have just described, had begun to react upon these common law doctrines.

_(3) The effect of the new situation created by this legislation upon legal doctrines as to the relation between law and religion._

During the first half of the nineteenth century, there are indications that some lawyers were beginning to be of opinion that it was not every sort of questioning of the truths of Christianity, which would make the questioner criminally liable. As early as 1729, the court had expressly said that it did not mean to assert that theories advanced by learned men upon controversial points, would expose those who field them to liability, provided that Christianity in general was not attacked;3 and both Lord Mansfield 4 and Blackstone 5 had maintained that the mere holding, as distinct from the propagation, of opinions was not an offence by English law. We have seen that both the Star Chamber in the earlier part of the seventeenth century,6 and the common law courts in the later part of that century,7 had assigned, as their reason for taking cognizanc of heretical opinions, the fact that they tended to sedition and commotions; and Blackstone had emphasized the fact that blasphemy consisted in " profane scoffing at the Holy Scripture or exposing it to contempt and ridicule."8 Having regard, therefore, to the larger liberty of expressing opinions secured by the legislation of the earlier part of the nineteenth century, it is not surprising to find that, about the same

## 11 Religious Non-Conformity 415

period, it began to be thought that the essence of the offence of blasphemy, was not the denial of the truths of Christianity, but their denial in an offensive manner. Starkie, the second edition of whose book on libel was published in 1830, maintained, in substance, that an honest denial of Christianity was not blasphemy ; and that the essence of the offence was "a wilful intention to pervert insult and mislead others by means of licentious and contunelious abuse applied to sacred subjects, or by wilful misrepresentations or artful sophistry calculzted to mislead the ignorant or unwary."1

Footnote 1: "Though as a matter of discretion and prudence, it might be better to leave the discussion of such matters to those who, from their education and habits, are most likely to form correct conclusions, yet it cannot be doubted that any man has a right, not merely to judge for himself, on such subjects, but also legally speaking, to publish his opinions for the benefit of others. . The law visits not the honest errors, but the malice, of mankind. A wilful intention to pervert, insult, and mislead others, by means of licentious and contunelious abuse applied to sacred subjects, or by wilful misrepresentations, or artful sophistry, calculated to mislead the ignorant or unwary, is the criterion and test of guilty, "Starkie, Libel 3rd ed.) 559, 6oo, cited Stephen, Fortnightly Rev. xil 3rt.

The cases already cited show that the criminal law was not for some time expounded in this way. But the trend of public opinion was making for its acceptance. In 1842, in the case of _Shore v. IVison_,2 Erskine, J., laid it down that, " it is still blasphemy, punishable at common law, scoffingly or irreverently to ridicule or impugn the doctrines of the Christian faith, and no one would be allowed to give or to claim any pecuniary encouragement for such purpose ; yet any man may, without subjecting himself to any penal consequences, soberly and reverently examine and question the truth of those doctrines, which have been assumed as essential to it." This view of the law was followed by Coleridge, J., in _R. v. Pooley_ in 1857,3 and by his son Lord Coleridge, C.J., in _R. v. Ramsay and Foote_ in 1883.4 The correctness of this statement of the law was assailed by Stephen, J.5 That it was not a correct statement of the law of England in the seventeenth, or even the eighteenth, centuries, I think he proves ; and indeed the historical truth of Stephen's view is, as we have seen, almost admitted by Coleridge, C.J.6 But there is no doubt that, as the nineteenth century proceeded, this newer view of

### 416 Crime and Tort

the law had been gathering strength, because it was obviously so much more in accordance with men's views as to the proper relation between law and religion than the older view1--a fact illustrated by the settlement in i888 of the long controversy as to the right of the atheist to affirm instead of taking an oath.3 The law laid down in _R. v. Ramsay and Foote_ was approved by the Court of Appeal in 1915;;3 and the principle was applied by the House of Lords in 1917.4 It is therefore now indisputably the law of England.

Footnote 1: "Parliament, the supreme authority as to our law has passed Acts which render the dicta of the judges in former times no longer applicable. And it is no disparagement to their authority to say that observations which were made under one state of the law are no longer applicable unde: a different state of things," R. v. Ramsay and Foote (r83) r5 Cox C.C. at p. 235.

Footnote 2: 51, 52 Victoria c. 46 (The Oath Act).

Footnote 3: 53 Scuar Society v. Bowman \[195\] 2 Ch. at pp. 462, 469-470.

It did not follow, however, that, because a reverend denial of Christianity was no longer a criminal offence, the law would uphold a trust or a contract to propagate views which were directly contrary to the Christian faith. But even here the former rigid attitude of the law was weakening. Judges were astute to find that trusts for religious purposes were not anti-Christian;5 and at length in 1917, in the case of _Bowman v. The Secular Society_,6 it was held that the propagation of such views was not illegal in any sense, and that therefore a bequest upon trust for a company, formed to propagate these views, was valid. The cases of _Briggs v. Harfley_,7 and _Cozwan v. Milbourn8_ were overruled, with the result that the law now draws no distinction between the propagation cf Christian, non-Christian, or anti-Christian opinions. It will help all alike, unless it can be shown that they advocate practises contrary to the rules of English Law. But just as Stephen, J., upheld the older rules as against the newer law laid down in _R. v. Ramsay and Foote_, so in _Bowman v. The Secular Society_ Lord Finlay upheld the older law laid down in _Briggs v. Harfley_ and _Cozwan v. Milbourn;_ and in both cases these advocates of the older aw were solitary protestants.

Footnote 4: 7: 1850 Ig L.J. Ch. 416.

Footnote 8: 1867 L.R. 2 Ex. 230.

Footnote 9: 19: 17 If every sect was to be indulged in a free communion of civil employees, the idea of a national establishment would at once be destroyed, and the episcopal church would be no longer the church of England," Comm. iv. 53.

The legislation of the nineteenth century, which threw open most of the offices of state to persons who were not members of the established church, destroyed, as Blackstone said it would destroy,9 the logical necessity for such a church. In like manner

## 11 Religious non-conformity 417

the decision in _Bowman v. The Secular Society_ leaves the ecclesiastical law of England in a very anomalous position. We have seen that, as late as 1881, it was described by Lord Blackburn as part of the general law of England.1 If this is so, it would seem that the situation, in which the rules of law and equity sometimes found themselves before the Judicature Acts, is again reproduced. That which one part of the law of England regards as illegal is regarded as legal and enforced by the other part. But the effects of this decision have not stopped here. As we shall now see, the same trend of public opinion, which led up to this decision, has encouraged the House of Lords to change the long accepted interpretation placed upon some of the older legislation dealing with Roman Catholicism.

Footnote 1: The author is grateful to the anonymous referee for his comments on the manuscript.

(4) _The effect of this new common law doctrine upon the interpretation of the older legislation._

We have seen that the legislation, which freed the Roman Catholics from their disabilities, did not wholly emancipate them.2 But it is clear that some of the judges were beginning to think that these restrictions were not wholly consistent with the larger liberty which had been accorded to all kinds of religious and anti-religious opinions. In 18603 and 18614 Lord Romilly expressed some doubts as to the correctness of the law laid down in _West v. Shuttleworth_ as to the invalidity of superstitious uses. In 1914 the restrictive clauses in the Act of 1829, directed against monastic orders, were, to a large extent, rendered nugatory by the decision of Joyce, J., in the case of _Is r r s Smith'_--the judge whose decision was affirmed by the House of Lords in the case of _Bowman v. The Secular Society._ Finally, in 1919, practically the whole law as to the invalidity of superstitious uses was swept away by the decision of the House of Lords in _Bourne v. Keane.6_ The House asserted that the preamble to the Chantries Act of Edward VI.7 could not have the effect which is still accorded to the preamble of Elizabeth's Act of 1601;8 and it reversed all the cases and dicta which were founded ultimately upon the view that just as the preamble to Elizabeth's Act is a guide to the definition of a charitable use, so the preamble to Edward VI.'s Act must be taken as a guide to the definition of a superstitious use. This was a bold step. When the House of Lords in 1916 was reminded that in 1888 it had reversed a decision of 1849, the retort wasgiven that " this is hardly the right view to take of your Lordship's judicial functions nowadays."1 But in this case, the House, as Lord Wrenbury pointed out, reversed dicta 317 years old, a decision 84 years old,2 and a rule which, in 1917, Lord Parker had regarded as a settled rule of law.3 But Lord Wrenbury in this case took the position of solitary protestant, which Stephen, J., took in relation to the decision in _R. v. Ramsay and Foote_, and Lord Finlay took in relation to the decision in _Bowman v. The Secular Society_. In all three cases the movement of public opinion in favour of the widest toleration was sufficient to overturn the principles of the older law. Indeed, it was admitted by Lord Birkenhead that it was the same public policy as that underlying the judgment in _Bowman v. The Secular Society_ which played a great part in inducing the House of Lords to take the greatest liberty which it has ever taken with established legal principles.4 That decision is thus the crowning illustration of the manner in which the development of this branch of the law has been dominated at all periods, and more especially in its later phases, by considerations cf public policy and by the force of public opinion.

Footnote 1: Admiralty Commissioners v. S.S. Amerika \[1917\] A.C. at p. 56, _fer_ Lord Summer, cited vol. iii 677 n. 2.

Footnote 2: \[1919\] A.C. at p. 925; he might, as we have seen, above 413, have added that it was a construction in which apparently Lord Hardwicke had concurred.

Footnote 3: Bowman v. Secular Society \[1917\] A.C. at p. 437.

Thus the old theories upon which the relation of State to Church were based, and, consequently, both the old doctrine as to the relation of English law to Christianity, and the technical rules which depended on that doctrine, have been swept away. All that is left is the law as to blasphemous libel as restated in _R. v. Ramsay and Foote_. It is obvious that the dominant factor in the various trains of technical reasoning, which have justified the abolition of the older doctrines of law and equity, and, with the assistance of the Legislature, have impelled them in the direction of universal toleration, has been the influence of public opinion as to the proper relation of the state and its law to religion. Indeed,

## 11 Religious Non-Conformity 419

I think that it would be true to say that in no branch of the law has this influence been in the past more pronounced, and that it still continues, and will continue, to exercise at least an equal influence in the future. In the past that influence has been all in the direction of a greater liberty and a fuller toleration, until in our own days, complete liberty and full toleration have been attained. No doubt the use made of this complete liberty and full toleration will largely determine the future trend of public opinion ; for it is the fact that this gradually extending liberty has not in the past proved dangerous to the safety of the state, that has made for its final victory. This fact is not unconnected with that growth in the strength of the state, which has enabled it to be more generous in its administration of the criminal law than in the days when it was weak.1 But if this liberty should be misused so as to endanger the safety of the state, there can be little doubt that public opinion will revert again to its older attitude.

Footnote 1: Vol. v. 195.

The principles which underlie the past development and the probable future of this branch of the law, have been so fully and eloquently summed up by Lord Sumner, in one of the wisest pronouncements that have ever been made on the subject, that I shall copy his words :2 "the words, as well as the acts, which tend to endanger society differ from time to time in proportion as society is stable or insecure in fact, or is believed by its reasonable members to be open to assault. In the present day meetings or processions are held lawful which a hundred and fifty years ago would have been deemed seditious, and this is not because the law is weaker or has changed, but because, the times having changed, society is stronger than before. In the present day reasonable men do not apprehend the dissolution or the downfall of society because religion is publicly assailed by methods not scandalous. Whether it is possible that in the future irreligious attacks, designed to undermine fundamental institutions of our society, may come to be criminal in themselves, as constituting a public danger, is a matter that does not arise. The fact that the opinion grounded on experience has moved one way does not in law preclude the possibility of its moving on fresh experience in the other ; nor does it bind succeeding generations, when conditions have again changed. After all, the question whether a given opinion is a danger to society is a question of the times, and is a question of fact. I desire to say nothing which would limit the right of society to protect itself by process of law from the dangers of the moment, whatever that right may be, but only to say that experience having proved dangers once

### 420 Crime and Tort

thought real to be now negligible, and dangers once very possibly imminent to have now passed away, there is nothing in the general rules as to blasphemy; and irreligion, as known to the law, which prevents us from varying their application to the particular circumstances of our time in accordance with that experience."

How far the law as it exists to-day is likely to be beneficial to the state and to the community remains to be seen. Complete freedom in economic relations has already been tried and found wanting. It is at least doubtful whether it will be any more successful in respect to the publication of opinions, religious or otherwise ; and it may well be that in religious and intellectual, as in economic spheres, we shall, as Lord Summer has indicated, be driven to revert to some of our older ideas. It is not unlikely that those who have abandoned all belief in the authority of a God, will carry their scepticism a little further, and begin to question the authority of the state. The Christianity upon which the state and the law were once founded, though it might at times unduly magnify the authority of the Church, recognized the need for the secular arm of the state, and generally supported its authority. But what of the various non-Christian or anti-Christian sects which seek to take its place ? It may well be that "false doctrine heresy and schism " of the strictly theological variety, no longer connote, as they o:ten did connote in the sixteenth and seventeenth centuries, " sedition privy conspiracy and rebellion " ; but it does not follow that the state can afford to disregard all kinds of false doctrine. It does not follow that unlimited licence to propagate views and theories at variance with broad principles of Christian morality, will be wholly unproductive of political effects. History lends no countenance to such a conclusion ; and the proved efficacy of propaganda supports its teaching. In fact, it is not unlikely that Caesar, now that he has deliberately abandoned the task of securing for God the things that are God's, will find considerably greater difficulty than heretofore in securing for himself the things that are Caesar's. If that result should follow one of two courses must be pursued. Either the state must reassert its authority by means of an increase in the severity of the criminal law, and an abridgment of the liberty to express immoral or seditious opinions ; or it must be content to pursue a policy of drift and concession to the forces opposed to it, which can only lead straight back to a set of political conditions which will bear no small resemblance to the modified anarchy of mediaval political society--without the redeening grace of the spiritual elements in that society, which sprang from the deeply rooted religious faith of mediaval men.

## 5 Lines of Future Development

We have seen that the medieval law of crime and tort was narrow. It was, so to speak, permeated by the idea of trespass--by the idea, that is, of forcible damage to person or property. At the end of the medieval period it was only just beginning to transcend this idea through the instrumentality of the writs on the case. We have seen that, during this period, the criminal law was developed, partly by the Legislature, and partly by the new ideas introduced by the Council and Star Chamber ; and that the law of tort was developed partly by the latter agency, and partly by a great expansion of the action on the case. Consequently, in the criminal law many new treasons and felonies were created, and the modern misdemeanour made its appearance ; while the development of the law of tort was marked by the growth of specific torts, and, as we shall see in the next section, by large changes in and additions to the principles of liability. With some of these developments I have already dealt in the preceding sections of this chapter. At this point it will only be necessary, firstly, to sketch briefly, in respect to certain torts not already dealt with, the manner in which this process of differentation was proceeding ; and, secondly, to indicate some of its effects upon the growth of the law.

_The Process of Differentiation_

(1) _Wrongs to the person._

During this period we can see the beginnings of the process which will differentiate the wrongs of assault, battery, and false imprisonment, and create the specific torts known by these names in our modern law. In the Middle Ages all these wrongs were redressible by an action of trespass; and they were regarded simply as illustrations of the multilarious trespasses to the person redressed by that writ. But in the cases decided upon writs brought for particular trespasses, and upon writs on the case brought for wrongs analogous thereto, we can see that the law is beginning to acquire some more precise rules as to the conditions under which these wrongs are committed. These rules are the starting points of the further developments which will give this branch of the law its modern shape.

\_Assault and Battery.--\_As early as the fourteenth century it was held that trespass would lie for an attempted battery which had failed to take effect--for instance when one had thrown a hatchet at another which had missed;1 for a threatened battery if

### 422 Crime and Tort

accompanied by actual damage ;1 and even for mere threatening words which put the plaintiff in fear, and caused him damage.2 It was held, however, in the case of _Tuberculosis v. Savage,3_ that a present threat of violence was needed to constitute an assault, so that where one put his hand on his sword and said, " if it were not assize time I would not take such language from you," it was no assault ; though it would have been otherwise if he had held up his hand in a threatening manner and said nothing. In this case stress was laid on the declared intention not to offer violence ; and it is probably because nc intention of violence can be certainly collected from general words of threatening or abuse, that the law has abandoned the idea that such words can be accounted as an assault.4 It was the same emphasis on intention which has given us our modern definition of battery. In its original conception it meant the infliction of physical injury ;5 and we have seen that in the Middle Ages an action lay whether it was committed intentionally, negligently, or accidentally.6 But it was held, during this period, that " the least touching of another in anger " is a battery.7 This at once introduces the question, What is a touching in anger ? and this question can only be answered by a reference to the intent of the party who touches another.8 Thus it was held in _Tuberculosis v. Savage_ that a touching, " done in earnest discourse and not with intent of violence is no assault," and therefore no battery.9 But this rule at once introduces into the offence a new element--the element of insult--which may justify heavy damages for a battery which inflicts only trifling physical injury.10

Footnote 10: Street, op. cit. i 6; Pollock, Torts (tzth ed.) 213.

Footnote 11: Y.B., 45 Ed. III. Trin. pl. 35.

Footnote 12: 27 Ass. 134 pl. lr; Y.BB. 37 Hy. VI. Pasch. pl. 8 at p. 20b _fer_ Prisot, C.J.; 7 Ed. IV. Hill. pl. 31 _fer_ Danby and Choke, J.J.; the same rule was laid down in Y.B. 17 Ed. IV Trin. pl. 2 p. 4b by Fairfax. J., but denied by Nedham, J., and Billing, C.J.; cp. Pollock, Torts (tzth ed.) 216 n. (_f_).

Footnote 13: (t669) 1 Mod. 3.

Footnote 14: Evely v. Stouly (t615) 2 BuIs at p. 327, _fr_ Dodderidge, J.; Pollock, Torts (tzth ed.) 216, citing ' the Cirontiers' (L.Q.R. i 232) :--"For Meade's Case proves, or my Report's in fault, that singing can't be reckoned an assault." The opinion of Nedham, J., and Billing, C.J., in Y.B. 17 Ed. IV. Trin. pl. 2 p. 4b seems to be in harmony with the later law.

Footnote 15: See Street, Legal Liability i 4.6.

Footnote 16: ${}^{\\circ}$ Vol. iii 376.

Footnote 17: Cole v. Turner (1705) 6 Mod. 19 _fer_ Holt, C.J.

Footnote 18: ${}^{\\circ}$ The factor which the law accepts as sufficient to justify this extension is found in the wrongful or hostile intent of the wrong-doer ; in his malice, as the element is termed in other departments of tort, "Street, op. cit. i 6.

Footnote 19: (t669) 2 Ach. 545; "if two or more meet in a narrow passage, and without any violence or design of harm, the one touches the other gently, it will be no battery," Cole v. Turner (1705) 6 Mod. 19 _fer_ Holt, C.J.

Footnote 19: Street, op. cit. i 6; Pollock, Torts (tzth ed.) 213.

The wit of trespass for assault and battery remedied, not only violence offered immediately to the plaintiff's own person, but also violence offered to him indirectly through violenceThe process of differentiation 423 or threatened violence to his servants and tenants.1 As Sir F. Pollock has said,2 "examples of this kind are not uncommon down to the sixteenth century or even later ; we find in the pleadings considerable variety of circumstance which may be taken as expansion or specification of the _alia enormia_ regularly mentioned in the conclusion of the writ." A good example in this period is the case of _Garrei v. Taylor.3_ In that case the defendant had threatened the plaintiff's workmen and customers, so that they desisted from working for or trading with him. It was held that the plaintiff could recover damages in an action on the case. We shall see that the principle underlying such cases was one of the principles contributing to developments in the law of tort, which were called for by the growth of commerce and industry during this period--developments which have, owing to the legislative changes of the nineteenth century, assumed immense importance in modern times.4

Footnote 1: F.N.B, 87 N., 2 Torts (tzth ed.) 234, and references there cited.

Footnote 3: (1621) Cro. Jac. 567. 4 Below 431.

Footnote 4: Op. cit. 1 z-13, citing Bracton's Note Book cases 314, 465.

Footnote 5: 22 As. 104 p. 85.

\_False imprisonment.--"_False imprisonment,"_ as Mr. Street says," " was one of the first trespasses recognized by the common law. A laying of violent hands upon the person, and an actual forceful deprivation of liberty, is the element undoubtedly at the root of liability in this wrong. In other words, the typical original imprisonment involved a battery." But even in medieval times this notion was extended. In Edward III.'s reign Thorpe, C.J., ruled that, "'there can be said to be an imprisonment in all cases where a man is arrested by force and against his will, be it in the high street or elsewhere, even though he be not confined in a house."6 What amount of restraint will amount to the commission of the tort has been elaborated in the later cases. It was settled, at the end of the seventeenth century, that the restraint must be total, so that, if all means of escape are not blocked, the tort is not committed.7 We have seen that some aspects of the tort shade off into the very different tort of malicious prosecution ; and that it was only gradually that the line between them was clearly drawn.8

Footnote 7: **A has a chamber adjoining to the chamber of B, and has a door that opens into it, by which there is a passage to go out ; and A has another door which C stops, so that A cannot go out by that. This is no imprisonment of A by C because A may go out by the door in the chamber of B, though he be a trespassed by doing it. But A may have a special action upon his case against C," Wright v. Wilson (1699) I Ld. Raym. 739 for Holt, C.J.**

Besides these specific wrongs to the person a large number of other unclassified wrongs were redressed by the action on the case. In all these cases the question whether or not a tort had been committed depended upon the question whether the defendant was guilty of negligence. But of the growth and influence of this conception I shall speak in the following section.1

Footnote 1: Below 449-458.

(2) _Wrongs to property._

Of wrongs to a plaintiff's right to the possession of chattels and land, and of the kinds of damage to property redressible by the various writs of trespass, I have already spoken.2 As in the case of wrongs to the person, a number of other unclassified wrongs to property were redressed by th's action on the case, if the defendant had acted negligently.3 I have also said something of the development of the scope of nuisance by means of action on the case.4 At this point it will only be necessary to call attention to two other aspects of the law as to nuisance, which have given rise to important bodies of rules in the modern law of tort.

(i) It was recognized, certainly by the beginning of the sixteenth century, that a nuisance might either be public and remediable by indictment, or private and remediable by action on the case at the suit of the person damaged thereby. But the question whether, and under what conditions, a person damaged by a public nuisance, could sue for damages, remained somewhat debateable down to the close of this period. It had been laid down by Fitzherbert in 15365 that an action would lie for a public nuisance, if the plaintiff could show that he had suffered special damage over and above the ordinary damage caused to the public at large by the nuisance. " If one makes a ditch across the highway, and I come riding in my way by night, and I and my horse are thrown into the ditch, so that I suffer great damage. in this case I shall have an action against him who made the ditch across the way, because I am more damaged by this than any other." But Baldwin, C.J., dissented. He considered that any stoppage of the highway was simply a public nuisance, and punishable only by indictment;6 and in this divergence of opinion we can see the beginnings of long standing doubts upon this matter. Though Fitzherbert's view was accepted," differences of opinion arose in the seventeenth century as to what could be considered to be sufficiently special damage to entitle a plaintiff to sue. Holt, C.J., The process of differentiation 425 and Rokeby, J., ruled that the plaintiff must be prepared to show a damage to himself directly arising from the nuisance, over and above that suffered by the public ;1 so that, if, for instance, through a stoppage in a road, a man lost a valuable piece of business by his late arrival, such damage could not be recovered. The delay in the journey was no more than was suffered by the rest of the public, and the loss of the business was too remote.2 But other judges were of opinion that such consequential damage was not too remote, and could be recovered.3 This difference of opinion has lasted down to our own days, and has given rise to judgments in the House of Lcrds which are not easily reconcilable.4

(ii) So soon as the application of the action on the case to remedy a nuisance had begun to widen the conception of a nuisance, the difficulty arose of drawing the line between those species of damage which are _absgue injuria_, because they are only the necessary result of the legitimate user of a man's property, and those species of damage which will support an action, because they are the result of an improper or excessive user of that property.5 As early as 1410 this difficulty arose in the Gloucester Grammar School Case.6 The masters of an ancient grammar school sued the defendant who had set up a rival school, and had, by his competition, lowered the fees which they were formerly able to charge. It was held that, though there would have been a good cause of action if the profits of an incororeal hereditament, such as a franchise of fair ferry or mill, were disturbed by the setting up of a rival fair ferry or mill, in the absence of such a franchise, no action lay for damage occasioned by legitimate competition.7 This

### Crime and Tort

was quite in harmony with the principle recognized by the common law that, except as restrained by rules of the statute or common law, trade ought to be free.1 The principle was restated by Holt, C.J., in _Keeble v. Hickeringi!.'_,2 but with the qualification that, if violent or other illegal means were used by the defendant to further his interests at the expense of the plaintiff, an action would lie.3 We shall see that the application of this principle has, like the application of the principle :hat trespass or case will lie if a man is damaged by menaces to his tenants or servants,4 helped to develop a very important branch of the law of tort in modern times.5

Footnote 1: In the context of the _Keeble v. Hickeringi!.'_, the \_Keeble v. Hickeringi!.

## The Process of Differentiation 427

- _Wrongs to domestic relations._
- We have seen that in the Middle Ages the peculiar status of wards, infants, wives, and servants was very much more emphasized than it is in modern law.1 We have seen too that the law of property, and the remedies for the infringement of proprietary rights, were then much more highly developed than the law of contract, and the remedies for breach of contract.2 It is in the period when these ideas were predominant that the law relating to these kinds of wrongs originated; and all through the history of this branch of the law they have made their influence felt. It is this fact which helps to account for the unsatisfactory state of some of our modern rules. It was in the case of the ward who was heir to property that the proprietary character of the father's or guardian's rights were most evident. The law knew a writ of right of wardship;3 and it very early adapted the writ of trespass to the purpose of protecting the father's or the guardian's rights, by the invention of writs for the ravishment of the ward.4 But on this branch of the law the long life of feudal wardship, and the great value of the feudal incident of marriage, exercised a very unfortunate effect.5 These two reasons led the law to take the view that what it protected was not the rights of the parent or guardian as such, but the pecuniary interest which the parent or guardian had in the marriage of his heir. It followed, therefore, that these remedies were not available for the abduction of any child, but only for the abduction of a child who was an heir. Trespass, it was said in _Barkham v. Demis_,6 was based upon a proprietary interest, and in a son or daughter a father had no property. It was only available, therefore, to protect the father's proprietary interest in the child's marriage.: Footnote 1: Vol. iii 61-65, 215 (wards), 513-520 (ifants), 520-533 (wives); vol. ii 460-463 (servants).
- For these incidents see vol. iii 61-66, 516.
- (1600) Cro. Eliza. 770.
- They held also that the father should not have an action for the taking of any of his children which is not his heir; and that is by reason the marriage of his heir belongs to the father . and by reason of this loss only the action is given unto him. But for the taking of a son or daughter net heir, it is not upon the same reason, and therefore not alike. Here the father hath no: any property or interest in the daughter, which the law accounts may be taken from him," ibid at p. 770; and it would seem from Gray v, Jefferis (1587) Cro. Eliza. 35 that this remedy was only available when one took the heir and married him, and that it did not lie for the loss of the marriage for any other reason, or for injuries to the child, even if these injuries occasioned the loss of the marriage.
- But for the taking of a son or daughter net heir, it is not upon the same reason, and therefore not alike. Here the father hath no: any property or interest in the daughter, which the law accounts may be taken from him," ibid at p. 770; and it would seem from Gray v, Jefferis (1587) Cro. Eliza. 35 that this remedy was only available when one took the heir and married him, and that it did not lie for the loss of the marriage for any other reason, or for injuries to the child, even if these injuries occasioned the loss of the marriage.

### 428 Croline and Tort1

refused to recognize that the father had the same kind of proprietary interest in his child as he had in his servant 1 or his wife.2 The result was that his interest in his children was unprotected unless the child happened to be his heir.

Footnote 1: Below 429.

One of the judges, indeed, in _Barham v. Dennis_ was prepared to take a more liberal view. "The father," said Glanville, J.," "'hath an interest in every one of his children to educate them, and to provide for them ; and he hath his comfort by them ; wherefore it is not reasonable that any should take them from him, and to do him such an injury, but that he should have his remedy to punish it." If his view had prevailed, the development of this branch of the law would have been infinitely more satisfactory. As it did not prevail the law was driven to find a remedy, by the application to the relation of parent and child, of the writ provided to protect the relation of master and servant ; and the result is, as Sir F. Pollock has pointed out, that the development of the law has been "' halting and one-sided."4 No doubt this device helped to mitigate the hardship of the law, more especially as very slight acts of service were, in later law, allowed to be sufficient to support an action.5 But it did not afford a complete remedy. If, for instance, the child was too young to be capable of service, no action would lie for injuries to it.6

Footnote 1: For a discussion of the fact that the father had aThe process of differentiation 429

because this is a wrong particularly done to her, yet for the loss of her service caused by this he may have an action." But, he added, "it is a pretty case and fit to be argued." There is another case of 1664 in which the plaintiff brought, not Case, but trespass quare clausum fregit;1 but this form of action was obviously inapplicable, as Rolle, C.J., had pointed out, if the entry was by the leave and licence of the father. These cases, however, made it clear that the principle on which the modern action for seduction rests had been reached. It was laid down in 1664 that, if trespass quare clausum fregit was brought, the damages were not limited to the loss of service, but that the injured feelings of the parent could be taken into account, as an aggravation of the wrong done in breaking his close.2 If, on the other hand, Case was brought per quod servitium anisit, the injured feelings of the parent could be considered in assessing the damages for loss of service.3

Footnote 1: Sippora v. Basset t Sid. 225.

Footnote 2: "Quant ceo est ex turi causa come fux ivc, l'action poet esse done in evidence sur tiel general declaration south les parolles elia enormia, et le reason est, quia le ley ne vot compell le party de monstre ce de record. Mes en touts auter cases de trespass le special mater pur que damages sera done dout estre plead," I Sid. 225; cp. Russell v. Come (170) z4 Ld. Rayam. et p. 1032 _fer Holt_, C.J.

Footnote 3: Bennett v. Allcott (1757) 2 T.R. at pp. 167-168 _for_ Bullet, J.

Footnote 4: Note to Grinnell v. Wells (1844) 7 M. and Gr. at p. 1044.

Footnote 5: Vol. ii 462-463 ; vol. iv 383-385.

Footnote 6: (1853) 2 E. and B, 216; vol. iv 384-385.

The courts have thus done their best to adapt this remedy to the case of seduction. But the incompleteness of the remedy is here even more marked than in other cases of injuries to children. For, in the oft-quoted words of serjeant Manning,4 "the quasi-fiction of _servitium anisit_ affords protection to the rich man whose daughter occasionally makes his tea, and leaves without redress the poor man whose child is sent unprotected to earn her bread amongst strangers."

Footnote 5: Vol. ii 462-463 ; vol. iv 383-385.

Of the remedies given by the law for the abduction of a servant I have already spoken.6 We have seen that they were supplemented by the provisions of the Statutes of Labourers. They rested at bottom on the idea that the master had a quasi-proprietary interest in his servant's services; and that idea is connected with ideas as to the status of a servant, which originated in the rules of law applicable to vilein status. We have seen, too, that these rules were made the foundation in \_Lumley v. Gye_6 of an entirely new development of the law. In that case the real right of the master to his servant's services, was in effect given to all persons entitled to the benefit of any contract; for it was laid down that it is an actionable wrong to interfere, without just cause or excuse, with any existing contractual relation.

Footnote 6: (1853) 2 E. and B, 216; vol. iv 384-385.

The same principles as were applied to the servant were applied to the wife. The husband's interest in his wife's consortium, unlike the parent's interest in the consortium of his children, was considered to be sufficiently proprietary to support an action of trespass.1 This is quite distinct from the right which the husband had, jointly with his wife, to sue for wrongs committed against her.2 The latter right depended upon the incapacity of the wife to sue in her own name.3 It was the incapacity of the wife to consent, which was the principle upon which the husband was allowed to bring the particular form of the action of trespass or action on the case, known as the action of criminal conversation, against one who had committed adultery with his wife.4

Footnote 1: Guy v. Livesey (1619) Cro. Jac. gor; Hyde v. Scyssor (1620) ibid 538.

Footnote 2: Hyde v. Scyssor (1620) Cro. Jac. gor; Hyde v. Scyssor (1620) Gro. Jac. gor; Russell v. Corne (1704) 2 Ltd. Raym. 1032.

Footnote 3: Vol. iii 526; cp. vol. v 315.

Footnote 4: See Galizard v. Rigaut (1702) SSSalk. SS52, where the right to bring this action is assumed by Holt, C.J.; Street, Legal Liability i 264; as Mr. Street has pointed out, ibid 269 n. r. 1, " the idea in allowing trespass for assault and battery to be used in an action for seduction is that the girl's consent to the act of intercourse is irrelevant as against her father, just as the consent of the wife is irrelevant as against her husband, in an action for criminal conversation "; cp. Pollock, Torts (zith ed.) 227 n. $i$, and 228 n. $i$.

Footnote 5: Cited by Dodderidge, J., in Southern v. How Popham 144, as decided 22 Eliza ; but in Cro. Jac. 471 it is said to be decided 33 Eliza ; as Mr. Street has pointed out, op., cit. i 478-419, it was not till the eighteenth century that this branch of the law began to develop.

Footnote 6: Below 472-482, 7 Vol. iv 314-407; vol. vi 313-360.

(4) _Wrongs connected with commerce and industry._

Certain of the wrongs with which I have dealt in this and preceding chapters bear witness to the growing importance of commerce and industry. Some aspects of the law of defamation, of malicious abuse of the process of the courts, and of nuisance, the development of the conception of deceit, and the development of the idea of conversion--all afford illustrations. In addition, there is a solitary case of 1580 or 1595, in which an action of deceit was maintained for counterfeiting another's trade mark.6 But much the most important instance of this influence on the law of tort is the beginning, at the close of this period, of the modern doctrine of employer's liability, with the history of which I shall deal in the following section.4 Indeed, if we except this doctrine, it may I think be said that the growth of industry and commerce has not, during this period, exercised so great an influence on the law of tort as might have been expected. The explanation of this phenomenon is, it seems to me, somewhat as follows :--

Footnote 6: See Galizard v. Rigaut (1702) SSSalk. SS52, where the right to bring this action is assumed by Holt, C.J.; Street, Legal Liability i 264; as Mr. Street has pointed out, ibid 269 n. r. 1, " the idea in allowing trespass for assault and battery to be used in an action for seduction is that the girl's consent to the act of intercourse is irrelevant as against her father, just as the consent of the wife is irrelevant as against her husband, in an action for criminal conversation "; cp. Pollock, Torts (zith ed.) 227 n. $i$, and 228 n. $i$.

We have seen that during the whole of this period all branches of commerce and industry were minutely regulated by the Legislature.7 Wages were in theory fixed by the justices ; and combinations to alter the rates of wages thus fixed were illegal.

## Effects of these developments

Forestalling and regrating were offences known to the law. The corn laws tended to keep uniform the price of corn. There were many regulations and restrictions both as to apprenticeship and modes of manufacture. The difficulties placed by the Legislature on the assumption of corporate form,\[1\] tended to prevent the formation of large combines of manufacturers. In addition, in certain localities there still existed restrictions imposed by local bye-laws, under the authority of powers conferred by medieval charters. When, in the course of the nineteenth century, nearly all the restrictions imposed by these multifarious laws were swept away under the influence of the doctrine of laissez faire, a number of new problems were set to the law of crime and tort. We have seen that one, and perhaps the most important of these problems, arose in connection with the crime and the tort of conspiracy.\[2\] But the same causes which led to the growth of this branch of the law of tort, led also to the growth of other branches. The principle of cases like _Garret v. Taylor,\[3\]_ and more especially of _Keeble v. Hickeringill,\[4\]_ and the exact definition of the new tort resulting from the decision in _Lunley v. Gye,\[5\]_ all assumed great importance in cases which turned on the legality of certain activities of Trade Unions of employes and combinations of employers. Indeed, the fact that the common law could, from the basis of the principles contained in the Year Books and cases of this period, construct a body of law which was fitted to regulate the new industrial problems, to which the era of laissez faire had given rise, is perhaps the strongest illustration, in modern times, of the adaptability, and of the practical character of the principles evolved by a system of case law.

_The Effects of these Developments on the Growth of the Law_

We can, I think, distinguish three important effects of these developments on the growth of the law.

Firstly, the development of the substantive law in and through the forms of action, made it sometimes unreasonable, and sometimes excessively technical. The manner in which the fiction of per quod servitium anisit was used to supplement the defective character of the remedies given for wrongs to domestic relations, is the strongest instance of the evolution of an unreasonable set of rules.\[6\] The manner in which the rights of the parties were made dependent upon the correct appreciation by the pleader of the

### Crimp and Tort

right form of action1--more especially, in later law, on the often fine distinction between Trespass and Case;2 and the impossibility of joining two causes of action which fell under different forms,3--are both striking illustrations of the technical character of its rules.4

Footnote 1: Maitland, Forms of Action 298, $61:362.

Footnote 2: \_"We must keep up the boundaries of actions, otherwise we shall introduce the utmost confusion," Reynolds v. Clarke (1726) x. Str. at p. 635 _fer_ Lord Raymond, C.J.; this dictum was cited with approval by Blackstone, J., in Scott v. Shepherd (1773) 2 W. Bl. at p. 897; see also Sayinga v. Roome (1794) 6 T.R. at p. 130 _per_ Grosse, J.

Footnote 3: _"A man who had been assulted and accused of theft in the market place of his town was obliged, if he wished for retress for the double wrong, to issue two writs and to begin two litigations, which wound their course through distinct pleadings to two separate trials," Bowen, Administration of Justice in the Victorian Period, Essays A.A.L.H. i 5r8._

But secondly, the growth of specific torts, and the definition of the essential characteristics of these torts, helped to concentrate attention on the substantive rules of the law of tort. In the medieval period the law of tort was largely contained in the rules as to the competence of various forms of action--Dettinue and various forms of Trespass, Case and the various forms of Case. During this period, the law was acquiring a number of substantive rules, which are independent of adjective law; and this new importance of the rules of substantive law will increase during the eighteenth and early nineteenth centuries. This meant that the problem of distinguishing _aannua cum_ from _damna sine injuria_ was presented to the courts in a somewhat different form. We have seen that, in the Middle Ages, the growth of the action on the case had brought this prcblem before the courts;5 and in the law of this period and later it was often before the courts. But, while in the Middle Ages it was regarded rather as a problem relating to the competence of actions, in later law it is regarded as a problem relating to the substantive rights of the parties. It may be that, in many cases, " discussions of legislative principle have been darkened by arguments on the limits between trespass and case, or on the scope of a general issue"; and that " in place of a theory of tort we have a theory of trespass."6 For all that, it is true that, during this period, the law is much nearer to a theory of tort than it was in the Middle Ages.

Footnote 3: _"A man who had been assulted and accused of theft in the market place of his town was obliged, if he wished for retress for the double wrong, to issue two writs and to begin two litigations, which wound their course through distinct pleadings to two separate trials," Bowen, Administration of Justice in the Victorian Period, Essays A.A.L.H. i 5r8._

Footnote 4: For other illustrations in other branches of the law see vol. i 634 and n. 2, 645.

Footnote 5: _"Vol. iii 408._" Holmes, The Common Law 78.

Thirdly, these developments necessitated a thorough revision of the mediaval principles of civil liability for wrong. We have seen that many of the later developments of the older torts, such as assault and battery, involved a consideration of the intention of the defendant;7 an intention to deceive was the essence of deceit; and malice was an essentia element in the tort of malicious

**Criminal Liability**

prosecution.1 The large mass of wrongs to person and property remedied by actions on the case, were coming to depend on the question whether the defendant had acted negligently to the damage of the plaintiff, and not merely on the question whether he had caused him damage by his act. Commercial necessities were showing that the mediaeval rules as to the master's liability for the acts of his servants were too narrow. Of the manner in which all these causes transformed the mediaeval principles of civil liability I shall speak in the following section.

Footnote 1: Above 301.

**SS 6. The Principles of Liaritty**

_Criminal Liability_

We have seen that during the mediaeval period criminal, unlike civil liability, was based upon the presence of a _mens rea_. We have seen, too, that the rules as to the possible defences to a criminal charge, and as to incapacities which would excuse from guilt, or mitigate punishment, were growing more precise ; and that this growing precision was partly the cause, and partly the effect of the firmness with which the central principle of the criminal liability--the need for a _mens rea_--had come to be grasped.2 During this period, (1) the nature of this _mens rea_ in relation to various specific crimes was being analysed and elaborated ; and (2) the same process of analysis and elaboration was taking place with reference, both to the incapacities which would excuse from guilt, and to some of the defences which might be made to a charge of crime. Under these two heads, therefore, I shall sketch shortly the development of this branch of the law.

Footnote 1: _The requirement of mens rea_.

It was well settled in the sixteenth century (in spite of the opinion to the contrary held in the fourteenth century) \[3\] that a mere intention to commit a crime, unaccompanied by any overt act, entailed no criminal liability. " The imagination of the mind to do wrong," it was said in _Hales v. Petit_,4 " without an act done, is not punishable in our law, neither is the resolution to do that wrong which he does not, punishable, but the doing of the act is the only point which the law regards ; for until the act is done it cannot be an offence to the world, and when the act is done it is punishable," And by an act was meant a voluntary act, so that, " if A by force takes the arm of B, and the weapon in his hand, and

### Crime and tort

therewith stabs C, this is murder in A, but B is not guilty."1 In fact, the manner in which the common law courts adopted the Star Chamber's view as to the criminality of attempts to commit crimes,2 and treated these attempts as common law misdemeanours,3 removed the chief reason for reviving the dangerous doctrine that a mere intent to commit a crime entailed liability.

Footnote 1: Hale, P.C. i 434, citing Reniger v. Fogossa (1551), Plowden at p. rq ; but it was only physical violence which operated in this way--" if it be only a moral force, as by threatening, duress, or imprisonment etc, this excuseth not," ibid; see below 443-445-2 Vol. 9: No. 207.

Footnote 2: Vol. 9: No. 207.

To produce criminal liability, therefore, there must be both an act and a guilty intent. It followed that if one killed another accidentally he did not commit murder--" for it is the will and intention that is regularly required, as well as the act and event, to make the offence capital."4 So in the case of larceny, " as it is _capit_ and _asportarity_, so it must be _felonic_ or _animo ferrandi_, otherwise it is not felony, for it is the mind that makes the taking of another's goods to be a felony or a bare trespass only."5 It followed also that, though ignorance of law never excused from criminal liability,6 ignorance of fact might, if it negatively any sort of guilty intent.7 This principle was applied in 1639, in the case of \_K. v. Leveit,\_8 where the accused, under the mistaken but justifiable impression that a person in the house was a burglar, killed her.

Footnote 4: Hale, P.C. i 434, citing Reniger v. Fogossa (1551), Plowden at p. rq ; but it was only physical violence which operated in this way--" if it be only a moral force, as by threatening, duress, or imprisonment etc, this excuseth not," ibid; see below 443-445-2 Vol. 9: No. 207.

Footnote 5: Hale, P.C. i 434, citing Reniger v. Fogossa (1551), Plowden at p. rq ; but it was only physical violence which operated in this way--" if it be only a moral force, as by threatening, duress, or imprisonment etc, this excuseth not," ibid; see below 443-445-2 Vol. 9: No. 207.

Footnote 6: Hale, P.C. i 38.

Footnote 7: " But in some cases ignorantia facti doth excuse, for such an ignorance many times makes the act itself morally involuntary," ibid.

Footnote 8: (f639) Cro. Car. 538.

Footnote 9: De Pace, Oxford Studies in Social and Legal History, vol. vii 378.--" Et nota que en mort de home lentent de celui que fait le morte ne fait le felony come il fait de Theft. .

**CHIMINAL LIABILITY**

is that the _nens rea_ or guilty intent required by the law, though it originated in the idea that accompanying the act there must be an element of moral blameworthiness, though it still connotes such moral blameworthiness, has become a very technical notion. Its assumption of this technical form is mainly the work of this period of our legal history. Let us take as illustrations of this process the manner in which it has come to be defined in relation to murder, manslaughter, and larceny.

It is clear that Coke was stating a well settled principle when he says of the "malice prepensed " or "malice aforethought" which is necessary for murder, that it exists "when one compasseth to kill wound or beat another and doth it sedato animo "; and that this malice was "so odious in law," that "though it be intended against one, it shall be extended towards another."1 So far as the compassing is a compassing to kill, this definition gives us the natural meaning of the term ; but in the statement that a compassing to wound or beat, and still more in the statement that a blow intended for another, will, if death ensues, amount to malice aforethought, we are departing from the natural meaning of words. But this extension was still further extended in the course of the sixteenth century. It was held by a majority of the judges in 1536,2 that, if a person was killed accidentally by one of the members of a band engaged on a felonious act, all could be held to be guilty of murder. The judges in this case were not unanimous ;3 but it was the opinion of the majority which has prevailed.4 A fortiori malice was implied if A assaults B with intent to rob him, and in the course of the struggle A kills B.5 "He that doth a cruel act voluntarily," said Holt, C.J., " does it of malice prepensed."6 This idea was further extended to cover the case where an act likely to cause damage had caused death, though there was no intention to hurt anyone.7 It was not difficult to conclude from this that murder was committed, if death had ensued as the result of doing any unlawful

### Crime and Tort1

act.1 This wide rule was, however, narrowed down by Foster to the case when the unlawful act was also felonious and malum in se--e.g. if A, intending to steal B's poultry, shoots at them and accidentally kills C.2 But it is probable that even this mitigated form of the rule would not now be followed.3 Another extension recognized in this period is, however, still part of the law--the case where a person kills an officer of the law, or magistrate, in the regular4 execution of his duty, though he had no intention of killing him.5 In these ways, through the decisions given in this period, the particular _mens rea_ known as malice aforethought which was needed to make homicide murder, was so extended that it has come to bc, as Professor Kenny has said, merely an "arbitrary symbol."6 " For the malice may have in it nothing really malicious, and need never be really aforethought."7

Footnote 1: " If the act be unlawful it is murder. As if A meaning to steal a deer in the park of B shooteth at the deer, and by the glance of the arrow killeth a boy that is hidden in a bush : this is murder, for that the act was unlawful, although A had no intent to hurt the boy nor knew out of Jim," Coke, Third Insit. 56.

Footnote 2: Crown Law, 258-259-- The rule I have laid down supposeth that the act from which death caused was _malum in x_. For if it was barely _malum f prohibitum_, as shooting at game by a person not qualified by statute law to keep or use a gun for that purpose, the case of a person so of felonging will fall under the same rule as that of a qualified man."

Footnote 3: ${}^{\\star}$ Kenny, op. cit. 137-138.

Footnote 4: Cook's Case (1639) Cro, Car. 537; Hale, P.C. i 458.

Footnote 5: Young's Case (1586) 4 Co, Rep 40a; Mackalley's Case (1672) 9 Co, Rep. at ff. 68a, 68b; Hale, P.C. i 457 seq.4 6 Op, cit. 132

Footnote 7: Ibid 132-133 as Stephen, J., said in R. v. Serne (1887) 10 Cox C.C, at p. 312, " the words malice aforethought are technical. You must not, therefore, construe them or suppose that they can be construed by ordinary rules of language. The words have to be construed according to a long series of decided cases, which have given them meanings different from those which might be supposed."

Footnote 8: P.C. i 466.

Footnote 9: Op. cit. 175--${}^{\\star}$ we shall better avoid confusion of language if we say, ${}^{\\star}$ without any of those _more guilty_ forms of malice which amount to murderous malice,' For malice, in its wide legal sense (that is to say _mens rea_) is essential to every crime."

Manslaughter is said by Hale to be "the voluntary killing of another without malice express or implied."8 But this does not mean, as Professor Kenny points out,9 that there is no _mens rea_. It merely means that the guilty intention is of a different character. The character of the guilty intent required was, it would seem from Hale, elucidated chiefly by cases which drew the line between murder on the one hand, and a merely accidental killing on the other. Some of these cases depend on the fact that the person who caused the death has beer careless--e.g. the case of the builder who drops a piece of stone without due warning ;10 and often the question whether murder or manslaughter has been committed will depend on the degree of carelessness shown.11 Others depend on the fact that, though there was no intention to cause death, the death was in fact caused by the accused in the course of doing an

**Criminal Liability** **437**

unlawful act--e.g. playing at an unlawful game 1--but an act not sufficiently unlawful to make the homicide murder.2 Others depend on the fact that the death occurred in the course of a sudden quarrel which negatively the idea of premeditation; 3 and, for the same reason, a homicide committed under severe provocation will generally be manslaughter, if done in the heat of the moment.4 Here again, therefore, the _mens raa_ required by the law may be of the most various kinds, and of all degrees of moral guilt. It is for this reason that manslaughter is said to be "an elastic crime," " for the degrees of guilt which may accompany it extend from the verge of murder to the verge of excusable homicide."5

Footnote 1: Hale, P.C. i 472-473.

Footnote 2: See Kenny, op. cit. rio ; it is on this principle that one who kills another in a duel is guilty of murder, vol. v 199-201.

Footnote 3: Coke, Third Insit. 55; above 303.

Footnote 4: Coke, Third Insit. 55; Royley's Case (!67z) Cro. Jac., 296; Maddy's Case (!67z) 1 Vent. 158.

Footnote 5: Kenny, op. cit. rz4.

Footnote 6: " But in cases of farceny the variety of circumstances is so great, and the complications thereof so mingled, that it is impossible to prescribe an the circumstances evidencing a felonious intent, or the contrary, but the same must be left to the due and attentive consideration of the judge and jury," P.C. i 509.

In the case of larceny it is the intention to steal which makes all the difference between the felony and a bare trespass. But whether this intention is present or not must be judged by the circumstances of the case. Hale considered that it was possible to illustrate, but not to define, " all the circumstances evidencing a felonious intent."6 From that day to this, the reported cases have gone on illustrating these circumstances, till it is possible to lay down one or two general rules; and, even when Hale wrote, one or two of them had emerged. Thus, it was no felony to take A's horse from a common for a ride, when the horse was restored to the common at the end of the ride.7 Similarly, if my servant takes my horse and uses him for his own occasions, it is no felony if he returns him; but if, while on his journey, he sells him as if he were his own, "that act of selling" is declarative of his first taking to be felonious,"8 Again, "if A, thinking he hath a title to the horse of B, seiseth as his own, or, supposing that B holds of him, distrains the horse of B without cause, this regularly makes it no felony but a trespass, because there is a pretence of title, but yet this may be but a trick to colour a felony, and the ordinary discovery of a felonious intent is, if the party both it secretly, or being charged with the goods denies it."9

Footnote 7: Ibid.

Footnote 8: Ibid.

Footnote 9: Ibid.

These illustrations show that the growth of the criminal law is largely bound up with the elaboration and differentiation of the different sorts of mental attitude, which is needed to constitute a _mens raa_ in different classes of crimes; for, when this elaboration

### Crime and tort

and differentiation have been made, we have gone a long way to defining the most essential features of these different crimes. We shall now see that this same process has helped the law to attain some more definite rules as to the various incapacities which will excuse from guilt, and has had some influence on the law as to some of the defences which can be made to a charge of crime.

(2) _Incapacities and defences._

The three incapacities of which I intend to speak shortly are infancy, insanity, and drunkenness.

_Infancy._ It would seem that the modern rules relating to the incapacity of infants were first settled in the case of capital offences --treason and the felonies. We have seen that it was well settled in this period .that a child below the age of seven could not be guilty of a felony, that between seven and fourteen there was a rebuttable presumption to the same effect, and that over fourteen his capacity was regarded as normal.1 In fact, from that time to this, there have been a few instances in which children of under fourteen have been convicted and one or two in which they have even been executed;2 and Hale testifies to the fact that so many crimes were committed by youths between fourteen and twenty-one, that, " if they should have impunity by privilege of such their minority, no man's life or estate could be safe."3 With regard to crimes under the degree of felony, the law was not by any means so certain. In the case of crimes of violence, such as riot or battery, the same rule as that applicable to felony was enforced in Hale's time.4 But then, as now, the misdemeanours covered a wide field, and some of them, then as now, were remote from the sphere of crime. For this reason, in certain of these cases, the law adopted the rule applicable to the proprietary or contractual capacity of infants, and exempted them from liability if they were under twenty-one. Thus for mere nonfeasance (unless the liability were ratione tenurae) they were exempt, because laches could not be imputed to them.5 Similarly, if the law imposed a penalty for a wrongful dealing with property, but the penalty could be regarded as only collateral to the main purpose of the law, viz. to discourage such dealings with property, an infant under twenty-one escaped.6 But these exceptions are now probably obsolete;

**Criminal Liability**

and for all ordinary misdemeanours the rule is the same as in the case of colony.

_Insanity.--"_ No felony or murder," says Coke,1 "'can be committed without a felonious intent and purpose . . . . . ; but furiosus non intelligit quid agit, et animo et ratione caret, et non mulum distat a brutis, as Bracton saith, and therefore he cannot have a felonious intent." For this reason insanity was a bar either to the institution or the continuance of criminal proceedings. We have seen that it was settled in the medieval period that madness, if it existed when the crime was committed, negatived liability.2 It was further settled in this period that, if a person of sound mind commits a crime and becomes mad before his attainment, he cannot be arraigned; "'and if such person after his plea and before his trial, become of non-sane memory, he shall not be tried; or, if after trial he become of non-sane memory, he shall not receive judgment; or, if after judgment he become of non-sane memory, his execution shall be spared; for were he of sound memory, he might allege somewhat in stay of judgment or execution."3 In spite of some doubts as to whether these rules were applicable to high treason, i: it took the form of an attempt to kill the king,4 these rules were recognized to be of universal application in the seventeenth century.

Footnote 1: Beverley's Case (1603) 4 Co. Rep at f. r24b.

Footnote 2: Vol. iii 372 and n. q. . .

### Crime and Tort

have been found a lunatic by inquisition.11 "The trial of the incapacity of a party indicted or appealed of a capital offence is, upon his plea of not guilty, by the jury upon his arraginment, who are to inquire thereupon touching such incapacity of the prisoner, and whether it be to such a degree as may excuse him from the guilt of a capital offence."2 Secondly, the law presumes every one to be sane till the contrary be proved.3

Footnote 1: As to this see vol. i. 474-475- 2 Hale, P.C. i 33. 3 Ibid. 4 Op. cit. 53, citing R. v. Arnold (?24) r6 S.T. at p. 765, where Tracey, J., said, " it must be a man that is totally deprived of his understanding and memory, and doth not know what he is doing, no more than an infant, than a brute, or wild least; therefore I must leave it to your consideration, whether the condition this man was in, as it is represented to you on one side, or the other, doth show a man who knew what he was doing, and was able to distinguish whether he was doing good or evil, and understood what he did."

Footnote 5: 27 S.T. 1x28 ; Stephen H.C.L., i 159.

(i) The first question--what the law will regard as such total insanity as will exempt from all liability--is, as Hale says, a question of fact. But on the question how this question of fact shall be answered the law has given very different answers at different periods. Professor Kenny says,4 "At one time a view prevailed that no lunatic ought to escape punishment unless he were so totally deprived of understanding and memory as to be as ignorant of what he was doing as a wild beast. But, ever since the epoch-making speech of Erskine in defence of Hadfield (in the year 18oo),5 a view at once more rational and humane has prevailed, which bases the test upon the presence or absence of the faculty of distinguishing right from wrong." Later, a still more precise test was evolved. Did the accused know the nature of the act which he was doing, and, if he did know it, did he know it was wrong? If so, and if the act was contrary to law, he is punishable.6 This test was suggested in reference to persons suffering from insane delusions, i.e. the partially insane; but it obviously supplies a test for coming to a conclusion whether or not any person is wholly insane.

Footnote 6: M'Naghten's Case (r847) to Cl. and Fin. at p. 2r0; as is there said, " the mode of putting the latter part of the question to the jury on these occasions has generally been, whether the accused at the time of doing the act knew the difference between right and wrong : which mode, though rarely, if ever, leading to any mistake with the jury, is not, as we conceive, so accurate when put generally and in the abstract, as when put with reference to the party's knowledge of right and wrong in respect to the very act with which he is charged "; as can be seen from the way in which Tracey, J., used this test in R. v. Arnold, above n. 4, the new test set out by the judges in M'Naghten's case is more favourable to the accused, and better calculated to give effect to the modern ideas as to the treatment to be accorded to the insane,

(ii) The second question--the treatment to be accorded to cases of partial insanity--is far more difficult. IIale is evidently at a loss how to deal with these cases. In cases of recurrent intervals of madness, indeed, there is no difficulty. If during these intervals the person affected is wholly ma

## 6 Criminal liability

total insanity applies.1 But if the accused is not wholly destitute of reason, he inclines to the view that such insanity will not excuse in the case of any capital crime--" for doubtless, most persons, that are felons of themselves, are under a degree of partial insanity, when they commit these offences." On the whole, he can only recommend that each case should be treated on its own merits, and concludes with the somewhat fatuous suggestion that, as such persons have generally as great understanding as a child of fourteen, they should be treated accordingly.2 But, in spite of this, Hale's treatment of the subject is, as Stephen says, "marked by his ordinary shrewdness and judgment, and does recognize, though faintly and imperfectly, the main divisions of the subject";3 and Blackstone 4 could add little to his statement.

Footnote 1: Hale, P.C. i 30-31.

Footnote 2: H.C.L., ii 150-151.

Footnote 3: M'Naghten's Case (1843) to Cl. and Fin. at pp. 209-211.

Footnote 4: Reniger v. Fogossa, Plowden at p. 1g.

Footnote 5: Beverley's Case (1603) 4 Co. Rep. at ft. 25a; Co. Litt. 247a.

Footnote 6: P.C, Bk, t cap. 1 SS 6,

No authoritative pronouncement on this subject was made till 1843 ; and then the test suggested was, as we have seen, whether the accused knew the nature of the act he was doing, and whether he knew that it was wrong. It followed from this that, if a person was labouring under a partial delusion, and was not in other respects insane, " he must be considered in the same situation as to responsibility as if the facts with respect to which the delusions exist were real."8 Since 1843, hcwever, the law has developed, because the discoveries of medical science have revealed more of the infinite complexities of the problem of insanity. Thus it is now recognized that, to the mind of a madman, there may be a connection between his delusion and his crime, which is not apparent to a sane person ; and that account should be taken of the effect of insanity upon emotion and will power.6 These considerations have led to a more merciful administration of the law, than a literal following of the rules laid dcwn in 1843, would justify. It is obvious that the development of this branch of the law must, to some extent, depend upon the development of medical science.

Footnote 6: P.C, Bk, t cap. 1 SS 6,

\_Drunkenness.--\_The rule laid down in the sixteenth century was short and clear--drunkenness was no excuse for crime, but rather an aggravation of the offence. " If a person that is drunk," it was said in 1551,7 "' kills another, this shall be felony, and he shall be hanged for it, and yet he did it through ignorance, for when he was drunk he had no understanding nor memory ; but in as much as that ignorance was occasioned by his own act and folly, and he might have avoided it, he shall not be privileged thereby"; and Coke,8 Hawkins 9 and Blackstone 10 lay down the law in the same way. Hale, however, allows two modifications of

### Crim and tort

this rule. Firstly, if the intoxication was not caused by his own fault, as where it was caused by "' the unskillfulness of his physician or by the contrivance of his enemies "; and, secondly, if by habitual drunkenness "an habitual or fixed phrensy be caused."1 In the first case it would seem that, if the effect of the intoxication was such that a temporary or a permanent insanity were caused, the person so affected was to be treated as if he were insane. But there seem to be no cases of this kind in the books ; and, as we shall see immediately, the development of the law as to the effect of drunkenness on criminal liability has removed the necessity for this exception. Probably at the present day drunkenness, whether caused by the accused's own fault or not, will have the same effect on his liability for a crime committed while in that state. At most the fact that the drunkenness was not caused by his own fault, would, if did not excise from liability, be a ground for a mitigation of punishment. In the second case the accused is, as Hale says,2 treated as insane But at the present day this treatment is accorded, both in the case where the insanity is "fixed and habitual," and where it is merely temporary. "Drunkenness," said Stephen, J.,3 " is one thing, and the diseases to which drunkenness leads are different things ; and if a man by drunkenness brings on a state of disease which causes such a degree of madness even for a time, as would have relieved him from responsibility, if it had been caused in any other way, then he would not be criminally responsible."

Footnote 1: P.C. i 32.

Footnote 2: Ibid.

Footnote 3: R. v. Davis (r881) r4 Cox C.C. at p. 564.

It is in respect of the effect of drunkenness, which does not fall under either of these two heads, that the law in the nineteenth century has departed from the older rule.4 If drunkenness does not amount to insanity, the drunhard can, unlike the madman,5 be tried and convicted.6 But, under the influence probably of the contemporary modifications which were taking place in the law as to insanity,7 the judges began to think that drunkenness should be allowed to modify or negative criminal liability in certain cases. But exactly what these conditions were, and how in principle they should operate, was for some time not very clear. There are some loose dicta in the earlier cases;8 but in the middle and the latter

## 43 Criminal Liability

half of the nineteenth century, it was coming to be thought that, "where intent is of the essence of a crime with which a person is charged, that intent may be disproved by showing that at the time of the act charged, the prisoner was in a state of drunkenness, in which state he was incapable of forming the intent." 1 But in 1909, in _R. v. Meade_, the rule was laid down more broadly. It was said that the presumption that a man intends the natural consequences of his acts, may be rebutted by showing that his mind was "so affected by the drink he had taken, that he was incapable of knowing that what he was doing was dangerous, i.e. likely to inflict serious injury." 2 But in 1920, in the case of the _Director of Public Prosecutions v. Beard_,3 the House of Lords put the law on a clear and logical footing, by holding that, in as much as a _mens rea_ of one sort or another is, with very few exceptions,4 a necessary constituent of all crimes, the true rule is that, if the drunkenness has produced in a person accused of a crime, an incapacity to form the particular intent necessary for the commission of that crime, he cannot be convicted ; 5 and that it is only in these circumstances that drunkenness, not amounting to insanity, is a defence.6

Footnote 1: R. v. Meade \[1909\] I K.B, at p. 89S.

Footnote 2: At p. 89S.

Footnote 3: "The difficulty has arisen, largely because the Court of Criminal Appeal used language which has been construed as suggesting that the test of the condition of mind of the prisoner is, not whether he was incapable of forming the intent, but whether he was incapable of foreseeing or measuring the consequences of the act," \[1920\] A.C. at pp. 503-504.

Footnote 4: It is said, Kenny, op. cit. 67, that it " may produce such a mistake of fact as will in itself excuse an otherwise unlawful act "; _std quarre_ whether a mistake so produced, unless it negatives the necessary intent, can or should have any effect on the drunken man's liability.

Let us now turn to certain defences which rest ultimately on the fact that, in the circumstances, no _mens rea_ is imputable. These defences are coercion, compulsion, and necessity.

\_Coercion.--\_This, as Hale points out,5 is not usually a defence. The doctrine of ministerial responsibility had, when Hale wrote, been well established, and prevented the royal command from being an excuse for the commission of crime.8 It was also clear that neither the command of a parent to his child, nor of a master to his servant, was any defence.9 The only relationship which could give rise to this defence was that of husband and wife. We have seen that, during the medieval period, it was recognized that, if a married woman committed certain crimes under the coercion of her husband, she escaped from liability.10 This rule was

### Crime and tort

extended during the latter part of the seventeenth century. As thus extended, it runs as follows :--Whenever any one of a certain limited number of crimes is committed by the wife in the presence of her husband, sha is presumed to have committed it under the coercion of her husband, and for that reason escapes liability.1 Hale's 2 opinion was that the reason for thus extending the law, and allowing coercion to be presumed from the mere presence of the husband, was probably "because the judges wished to give to married women some sort of rough equivalent for the benefit of clergy enjoyed by their husbands." 3 But the limits of the rule are uncertain. It does not apply to treason or murder,4 nor to miedemeanours specially connected with the management of the house ; 5 and it can be rebutted by proof that the wife was the active partner in the crime.6 Moreover, taken in connection with the non-acmissibility of this defence in other cases, it may, as Stephen points out, produce obviously unjust results. If a husband, wife, and their child of fifteen commit larceny, though it be proved that the child acted under threats by the father, and that no threats were offered to the wife, the child will be convicted, and the wife will escape.7

Footnote 1: Stephen, Digest of the Crimina Law _Art_. 30; Kenny, op. cit. 71-72; it is fairly clear from the authorities which are collected by Stephen, op. cit. 332-336, that the rule, in its modern form, is not much older than Hale; Hale, P.C. i 45-46, admits that there is authority against this form of it, and states it only as "the modern practice and fitest to be followed "; it is probable that Bacon had something to do with the establishment of the practice; he says in his Maxims (Works Ed. Spedding vii 344) "where baron and feme commit a felony, the feme can neither be principal nor accessory; because the law intends her to have no will, in regard of the subjection and obedience the owes her husband "; but this, as Stephen says, "goes infinitely beyond his authorities,"

Footnote 2: "Otherwise for the same felony the husband may be saved by the benefit of clergy, and the wife hanged," P.C. i 45-46.

Footnote 3: Stephen, H.C.L. ii 106; it was only a rough equivalent, for, as Hale says, P.C. i 46, "in manslaughter _committed jointly_ by husband and wife the husband may have his clergy, and yet the wife is not on that account to be privileged by her coverture."

Footnote 4: Hale, P.C. i 45.

Footnote 5: "A wife may be indicted together with her husband, and condemned to the pilroy with him for keeping a bawdy house ; for this is an offence as to the government of the house, in which the wife has a principal share," Hawkins, P.C. Bk. i Cap. i 812.

Footnote 6: R. v., Cruse (1838) 8 C. and P. 533.

Footnote 7: H.C.L., ii 106.

Footnote 8: R. v. M'Growther (1746) Foster, Crown Law 13; R, v. Crutchley (1831) 5 C, and P. 133; Stephen, H.C.L. ii ro6,

Footnote 9: R. v. M'Growther (1746) Foster, Crown Law 13; R, v. Crutchley (1831) 5 C, and P. 133; Stephen, H.C.L. ii ro6,

Footnote 10: "A wife may be indicted together with her husband, and condemned to the pilroy with him for keeping a bawdy house ; for this is an offence as to the government of the house, in which the wife has a principal share," Hawkins, P.C. Bk. i Cap. i 812.

Footnote 11: "A wife may be indicted together with her husband, and condemned to the pilroy with him for keeping a bawdy house ; for this is an offence as to the government of the house, in which the wife has a principal share," Hawkins, P.C. Bk. i Cap. i 812.

Footnote 12: "Otherwise for the same felony the husband may be saved by the benefit of clergy, and the wife hanged," P.C. i 45-46.

Footnote 13: Stephen, H.C.L. ii 106; it was only a rough equivalent, for, as Hale says, P.C. i 46, "in manslaughter _committed jointly_ by husband and wife the husband may have his clergy, and yet the wife is not on that account to be privileged by her coverture."

Footnote 4: Hale, P.C. i 45.

Footnote 4: Hale may be indicted together with her husband, and condemned to the pilroy with him for keeping a bawdy house ; for this is an offence as to the government of the house, in which the wife has a principal share," Hawkins, P.C. Bk. i Cap. i 812.

Footnote 6: R. v., Cruse (1838) 8 C. and P. 533.

Footnote 7: H.C.L., ii 106.

Footnote 8: R. v. M'Growther (1746) Foster, Crown Law 13; R, v. Crutchley (1831) 5 C, and P. 133; Stephen, H.C.L. ii ro6,

Footnote 14: Hale may be indicted together with her husband, and condemned to the pilroy with him for keeping a bawdy house ; for this is an offence as to the government of the house, in which the wife has a

**Criminal LABILITY**

relating to it is, as Professor Kenny says,11 " both meagre and vague."

Footnote 11: Op. cit. 73:

${}^{,\\

**446**: **CRIME AND TORT**

In these various ways the law, starting from the idea that a _mens rea_ or element of moral guilty is a necessary foundation of criminal liability, has so defined and elaborated that idea in reference to various sorts of crimes, that it has come to connote very many different shades o' guilt in different connections. But, though _mens rea_ has thus come to be a very technical conception with different technical meanings in different contexts, it has never wholly lost its natural meaning ; and, because its natural meaning has never been wholly lost sight of, the necessity for its presence, in some form, has supplied the principle upon which many of the circumstances, which will negative criminal liability, are based. These, in their turn, have been so developed that they have become the foundation of different bodies of technical doctrine ; and in these ways a large part of our modern criminal law has been developed. We shall now see that the very different developments which have taken place in the rules of civil liability, have likewise created no inconsiderable part of our modern law of tort.

_Citil Liability_

During the mediavel period the principle which underlay the law as to civil liability can be stated somewhat as follows : \[1\] A man is liable for all the harm which he has inflicted upon another by his acts, if what he has done comes within some one of the forms of action provided by the law, whether that harm has been inflicted intentionally, negligently, or accidentally. A man acts at his peril. This absolute liability for damage caused by an act which comes within one of the forms of action, even though the damage is the result of pure accident, was restated by Bacon at the end of the sixteenth century ; \[2\] and it was used by Hale in the seventeenth century to point the contrast between criminal and civil liability \[3\]. It was logically followed out (i) in respect to the defences open to a defendant, and (ii) in respect to a person's liability for the acts of his sevants. (i) A defendant could escape from liability if he could prove that his act was, in the circumstances, permitted by the law, either in the public interest, or in the necessary defence of his person or rights of property ; or that the act, which was the immediate cause of damage, was done, not by himself, but by the paintiff ; or that it was unavoidable by reason of an 'act of God .' \[4\] (ii) As a defendant was liable only for his acts, he could not as a rule be held liable for any tort committed by his servant, which he had not commanded or

## Civil liability

ratified; for unless he had commended or ratified it, it could not be said to be his act.1

Footnote 1: Vol. iii 382-385.

It is clear that this principle of civil liability rests ultimately upon a very primitive basis. It obviously takes account, not of the moral shortcomings of the defendant, but only of the loss of the plaintiff; and this characteristic is reminiscent of the days when the compensation payable was regarded, not as a penalty for wrongdoing, but as a means whereby the plaintiff was induced to forego his right to take revenge.2 But, as in other cases, the precocious development of English law gave an unusually long life to this principle, because it had been made the basis of a technical system of fixed rules. The result is that some of the rules, to which it gave rise, long remained a part of English law; and the principle itself was unsuccessfully invoked as a ground of liability as late as I$91.3

Footnote 2: Stanley v. Powell \[r89r\] r Q.B. 86.

It was during this period that the principle began to be undermined. In the first place, a certain number of the new torts, which were springing up in this period, were based on some form of wrongful intent--they were essentially malicious wrongs. In the second place, in a very much larger number of cases the courts were beginning to base the defendant's liability, not on the fact that he had acted, but on the fact that he had acted negligently, to the damage of the plaintiff. Both these causes tended firstly to restrict, and then to encroachquon, the sphere of the medieval principle. But the medieval principle, though greatly restricted in its sphere, did not wholly disappear. A place is still found for it in modern law; but it is a very different place from that which it occupied ir. the medieval law; and it is founded on very different principles. In the third place, at the close of the seventeenth century, the beginnings of the modern doctrine of Employers' Liability entirely changed the medieval principles relating to this part of the law.

I propose to relate the history of these changes under the following heads:--(1) the conceptions of wrongful intention and negligence as bases of liability; (2) the place of the medieval principle of liability in modern law; and (3) the doctrine of Employers' Liability.

(1) The conceptions of wrongful intention and negligence as bases of liability.

The part played by wrongful intention in the law of tort is and always has been small. It has come to be an essential element inthe tort of deceit,1 of malicious prosecution,2 and of defamation, when the words complained of were spoken on an occasion which is protected by a qualified privilege.3 We have seen that at one time the courts laid it down that malice was always an essential element in the tort of defamation. But this malice was always implied by the law from the making of the defamatory statement; and it is now recognized that it is not an essential element in the tort.4 A very similar development has taken place in respect of the new tort of persuasion tc break a contract created by _Lumley v. Gye.5_ It was at one time thought that its essence was the malicious persuasion to break a contract.6 But that idea has been ruled by the House of Lords to bc erroneous.7 Just as the essence of the tort of defamation is the publication of untrue defamatory statements without just cause or excuse, so the essence of this new tort created by the case of _Lumley v. Gye_ is the fact that a breach of contract has been knowingly and wilfully procured without just cause or excuse. The part, therefore, played by the element of wrongful intention in creating civil liability is very small; and, except in the case of those torts in which the existence of such an intention is an essential factor, the fact that such an intention exists will not make an act, otherwise lawful, tortious. With respect to the exercise of rights of property this proposition was affirmed by the House of Lords in r895,8 and with respect to the exercise of other rights in r898;9 and there can be little doubt but that it is historically sound.10 We have seen that, in the medieval period, the courts refused to base civil liability upon intent--"the thought of man is not triable"; and, later, wrongful intent was only partially admitted as a ground of liability in the case of certain specified torts. The contrary decision would have given to wrongful intent a far more extensive effect in creating civil liability, than was warranted by any of the previous decisions. It would, in effect, have given to it a different, but almost as extensive an effect, as negligence has come to have in the creation of this liability.

Footnote 1: Vol. iii 408; above 426.

Footnote 2: Above 391.

Footnote 3: Above 372, 375.

Footnote 4: Above 374-375.

Footnote 5: (r853) 2 E. and B, 216; for the development of this tort see vol. iv 383-385; above 431.

Footnote 6: Bowen v. Hall (r881) 6 Q.B.D, 333; Temperton v. Russell \[r893\] I Q.B, 715.

Footnote 7: Allen v. Flood \[r898\] A.C. r; at p. rz Lord Herschell said, "A study of the case of _Lumley v. Gye_ has satisfied are that in that case the majority of the Court regarded the circumstance that what the defendant procured was a breach of contract as the essence of the cause of action. It is true that the word maliciously was found in the declaration, the validity of which was then under consideration; but I do not think the learned judges regarded the allegation as involving the necessity of proving an evil motive on the part of the defendant but merely as implying that the defendant had wilfully and knowingly procured a breach of contract."

Footnote 8: Mayor of Bradford v. Pickles \[r895\] A.C. 587.

Footnote 9: Allen v. Flood \[r898\] A.C. r; and see Lord Herschell's statement at p. r24.

Footnote 10: See Pollock, Torts (tzu ed.) 157-358.

## 4 Civil liability

We have seen that the idea that civil liability was based upon negligence was unknown in the medieval common law. The central idea of the medieval common law, was that civil liability was based upon an act causing damage, if that act fell within one of the causes of action provided for by the law.1 This idea obviously excludes any direct reference to negligence as a cause of liability. But we have seen that the conception of negligence is latent in the principle that a man is only liable for the damage which is the proximate consequence of his act.2 The fact that the conception of negligence is latent in this principle was naturally emphasized by the growth of actions on the case, in which the damage flowing from the act was the gist of the action. In an ordinary trespass, in which a forcible act directly caused damage to the plaintiff's person or property, the connection between the act and the damage was generally obvious. But, when the damage was not the direct result of the defendant's act, it was necessary to show that it was its proximate consequence. To a modern lawyer it would seem that the obvious method of ascertaining whether or not the damage is the proximate consequence of the defendant's act, is to enquire whether the defendant foresaw or ought to have foreseen such damage as a necessary consequence of his act; to rule that, if he foresaw it or ought to have foreseen it, he was negligent; and that because he was thus negligent he is liable. But this way of looking at the problem is essentially modern, and it has only become possible as the result of a long historical development, the outlines of which I must here try to trace.3

Footnote 1: Vol. iii 375-377. 2 Ibid 379-380.

Footnote 3: The best historical account of the general development of the conception of negligence is to be found in Street, Foundations of Legal Liability i chap, xiii; the historical matter in Holmes, Common Law Lecture III is mainly concerned with development of the idea in the sphere of trespass, which is dealt with below 453-458's, on this latter point see also Vignore, Responsibility for Tortious Acts, Essays A.A.L.,H. iii 505-507; Pollock, Torts (1zth ed.) 142-147.

When the actions on the case first began to be developed, the medieval notions as to the basis of civil liability were engrained in the minds of the lawyers. If they had been asked why an act directly causing damage to the plaintiff gave rise to liability enforceable in an action of trespass, they would have said that such an act gave rise to liability because it was unlawful. The same reasoning was applied to some of the earliest actions on the case. An act which caused damage in certain specified ways was regarded as giving rise to liability because it was an unlawful act. Thus inn-keepers, common carriers, smiths, surgeons, taverners, vintners, or butchers, could be made liable in an action on the case if, as the result of want of care, skill, or honesty, the persons who had come into business relations with them were damaged.4 We should say

### Crime and tort

at the present day that they were liable for fraud or negligence. In the Middle Ages they were said to be liable " by the common custom of the realm "--that is they were liable because their conduct was regarded by the law as wrongful. Similarly, we have seen that any person was liable in an action on the case if, having undertaken to do something for another, he had done it so badly that that other was damaged.1 We should say at the present day that such liability was founded on a breach of contract. In the Middle Ages it was considered to be a liability for conduct which, by reason of the undertaking, was regarded by the law as wrongful.2

Footnote 1: Vol. iii 386, 429-431.

Footnote 2: Note that Blackstone, Comm. ii 163-165, states the medieval rules, but classes them under those " presumptive undertakings or _assumpsits_," arising from the " general implication and intendment of the courts of judicature that every man hath engaged to perform what his duty or justice requires "--at that date the idea of contract or quasi-contract was in the ascendant ; and even at the present day, as Mr. Street points out, op. cit. i 87, the subject of negligence is as important in the law of contract as in the law of tort.

But, as damage was the gist of the action on the case, the court, in coming to a conclusion whether or not a defendant could be made liable in such an action, was bound to consider whether or not the damage alleged could be said to be a sufficiently proximate consequence of the defendant's act to entail liability; and this question could only be answered by asking whether any ordinarily prudent man would have foreseen that damage would probably result from his act. Thus the courts were gradually familiarized with the conception of negligence; and, since the idea of negligence was brought before them in this way, three consequences followed. In the first place, they naturally, from the first, adopted the objective standard of the ordinarily prudent man; for they were not trying to determine whether this or that defendant had been negligent, but whether, having regard to what any ordinarily prudent man would have foreseen, a particular damage, flowing from a given defendant's acts, was a sufficiently proximate consequence of those acts to entail liability. This principle was not indeed formally laid down till 1837; * but, as Sir F. Pollock says, the idea " pervades the mass of our authorities ";4 and it pervades them, because this manner of regarding negligence was necessitated by the way in which the conception came into the common law. In the second place, the courts necessarily regarded negligence as being correlative to the existence of a duty not to harm the plaintiff in the manner of which he was complaining;5 for, until such a duty had been established, the mere fact that the defendant had harmed the plaintiff could give rise to no cause of action; and therefore the enquiry whether the damage was the proximate con

## 45 Civil liability

sequence of the defendant's act would be unnecessary. In the third place, we get that distinguishing characteristic of the law of tort, as compared with the law of contract, that "the primary question of liability may itself depend on the nearness or remoteness of the harm complained of. Except where we have an absolute duty and an act which manifestly violates it, no clear line can be drawn between the rule of liability and the rule of compensation."1 We shall see, however, that a clear line has been drawn by the Court of Appeal between the principle upon which liability to compensate is based, and the principle upon which the amount of the compensation is assessed. The question whether the damage was sufficiently probable for a reasonable man to have anticipated is relevant in determining the question of negligence--that is of liability to compensate : it is not relevant in determining the measure of damages.2

Footnote 1: Pollock, Torts (1zth ed.) 30.

Footnote 2: Re Podemis \[1gz1\] 3 K.B., 560; below 452-464.

There are many proofs that, during the sixteenth and seventeenth centuries, the constant need to inquire whether, in any given case, the damage complained of by the plaintiff was a sufficiently proximate consequence of the act of the defendant, was familiarizing the courts with the idea that in a large number of cases liability was grounded upon negligence. We have seen that, in the field of crime, the line between murder and manslaughter was often fixed by reference to the degree of negligence shown ;3 and the rule that a defendant was not liable for damage done by an ordinarily tame animal, unless scienter was proved, involves the idea that liability is founded upon negligence.4 But, in the sphere of tort, it seems that the conception was at first applied where the duty owed by the defendant to the plaintiff arose out of some contractual, quasi-contractual, or proprietary relation. Thus, in 160i, Coke laid it down that " where a man delivers & horse to another to keep safe, the defendant _equum il/lum tam negligenter castadivit_, _quod ob defectum bone castadiae interiti_, the action on the case lies for this breach of trust; so if my shepherd whom I trust with my sheep, and by his negligence they be drowned, or otherwise perish, an action upon the case lies."5 Similarly, we have seen that it was well settled that persons, like smiths or innkeepers, who were bound by law to exercise their callings skilfully, were under a duty of a delictual or quasi-contractual nature, if they caused damage by their negligence.6 A like principle was applied in the sphere of

### Crime and Tort

property law. In 1674 it was held that, where the defendants were bound by prescription to maintain a fence, and by reason of their negligence they failed to maintain it, so that the plaintiff's mare got through the gap and was drowned, the plaintiff could recover in an action on the case.1

Footnote 1: Anon, I Vent. 264-265 ; Star v. Rookesby (1771) I Salk, 335.

We have seen, however, that the law made certain bailees, to whom possession of goods had been entrusted, liable, even though they had not been negligent. These rules were, as we have seen, due mainly to the position which the law attributed to possessors as such, and partly to the fact that they had become fixed before the common law had attained the conception of negligence.2 But it is clear from \_Sonhacute's Case_3 that the court, in the light of the new conception that liability should be founded on negligence, was beginning to think that they were hard rules.4 They were not extended to the newer varieties of bailees;5 and we have seen that Coke advised that they should be evaded by making special contracts as to the measure of liability.6 The manner in which Holt, C.J., in the case of \_Coggs v. Bernard_7 put the law as to bailees on its modern basis, and applied to their liabilities the Roman rules as to negligence, which he had taken from Bracton, is the best proof that, at the beginning of the eighteenth century, the judges were coming to the conclusion that negligence should generally be regarded as a basis of liability; and that, in the absence of negligence, no liability should as a rule be imputed. In fact, that decision gave effect to a tendency in this direction, which had been felt in different ways throughout the sixteenth and seventeenth centuries.8 But even: then two survivals of the older law were still left--the innkeeper and the common carrier. The innkeeper is still absolutely liable, as he was liable in the Middle Ages,9 by the common custom of the realm, for the safe custody of the goods of his guests.10 The common carrier,11 common hoyman, or master of a ship, being persons " that exercise a public employment," were bound to " answer for the goods at all events," except as against acts of God and the king's enemies.12 But theCivil Liability 453

exemption of other bailees entrusted with the possession of goods from this absolute liability, had des:royed the older reasons for the rule ;1 and its application to these persons, as an exceptional rule, was based by Holt, C.J., on public policy.2 As applied to common carriers, it was accepted by Lord Mansfield ;3 and it is still part of the law. But even in Holt's day it was clearly regarded as an exceptional rule which required to be justified.

Footnote 1: Vol. vii 452-453.

Footnote 2: " This is a politic establishment, contrived by the policy of the law, for the safety of all persons, the necessity of whose affairs oblige them to trust these sorts of persons, that they may be safe in their ways of dealing ; for else these carriers might have an opportunity of undoing all persons that had any dealings with them, by combining with thieves etc., and yet doing it in such a clandestine manner, as would not be possible to be discovered," ; Ld. Raym, at p. 978.

Footnote 3: Forward v. Pitard (r785) r. T.R., 27.

Since the law had reached this stage by the end of the seventeenth century, it is not surprising to find that a further step was then taken. " The conception," as Mr. Street puts it,4 "of common law liability for negligence was so extended as to make one liable, in an action on the case, for damage flowing from the negligent performance of his own projects and undertakings, unconnected with the duty arising from statute, public calling, bailment, or prescription." This extension was certainly made in 1676 in the case of \_Mitchil v. Alestree.\_5 In that case the defendant had brought an unruly horse into Lincoln's Inn Fields for the purpose of breaking him. The horse escaped from the defendant, and damaged the plaintiff. The court held that the plaintiff could recover. " It was the defendant's fault to bring a wild horse into such a place, where mischief might probably be done, by reason of the concourse of people. Lately, in this Court, an action was brought against a butcher, who had made an ox run from his stall and gored the plaintiff ; and this was alleged in the declaration to be in default of penning him." And Wylde, J., said, " if a man hath an unruly horse in his stable, and leaves open the stable door, whereby the horse goes forth and does mischief; an action lies against the master."

Footnote 4: Foundations of Legal Liability i r89.

But, just as it was difficult to apply this new conception of negligence to certain kinds of bailees, whose position had been defined by older rules of law, so it was difficult to apply it in cases where the act complained of was a direct act of violence. Such an act was generally a trespass, and therefore an unlawful act ; and if it was an unlawful act, there could be no question of the defendant's liability. But such an act may be the result of a perfectly lawful act done purely accidentally ; and we have seen that, as late as the end of the sixteenth century, Bacon restated the mediavel rule that, even in such a case, the person doing the

### Crime and tort

act was liable.1 In fact, right down to the nineteenth century, there is a chain of authority in which the medieval rule is stated and relied on. Thus in 1617, in the case of _Weaver v. Ward_,2 the same distinction as that which Bacon drew between civil and criminal liability was drawn, and it was said that "no man shall be excused of a trespass ... except it may be judged utterly without his fault." In 1681 in the case of _Lambert v. Bessey_,3 the rule that " in all civil acts the law doth not so much regard the intent of the actor, as the loss and damage of the party suffering," is repeated ; and Brian's dictum that, "if a man assault me, and I lift up my staff to defend myself, and in lifting it up hit another, an action lies by that person, and yet I did a lawful thing," was also repeated--a dictum again repeated and approved by Blackstone, J., in _Scott v. Shepherd_.4 In 1682, in the case of _Dickenson v. Watson_,5 in an action by the plaintiff against the defendant for wounding him with his pistol, a plea that the defendant was emptying his pistol in a vacant place, and that the plaintiff had crossed the line of fire unknown to the plaintiff, was held bad ; for in trespass the defendant shall not be excused without an avoidable necessity, which is not shown here." In 1700 the same view was urged in argument in the case of _Mason v. Keeling_;6 and in 1724 it was apparently held that trespass lay for a merely accidental hurt.7 In 1783 it was used in argument by Erskine, as Bacon had used it, to illustrate the difference between criminal and civil liability.8 In 1799 this thesis was maintained in argument in the case of _Ogle v. Barnes_;9 and in 1803, in the case of _Leame v. Bray_,10 it was restated by Grose, J., "Looking into all the cases from the Year Book in the 21 H. 7, down to the latest decision on the subject, I find the principle to be, that if the injury be done by the act of the party himself at the time, or he be the immediate cause of it, though it happen accidentally or by misforture, yet he is answerable in trespass." There was a ruling to the same effect in 1823 in the case of _Vakeman v. Robinson_;11 and in 1868, in the case of _Ryland s v. Fletcher_,12 Lord Cranworth approved of the reasoning of Sir T. Raymond in _Lambert v. Bessey_,13 which, as we have seen, restated the medieval principle. In 1891, in the case of _Stanley v. Pozvelf_,14 the view that a man may be liable for a purely accidentalCivil liability 1455

trespass to the person was put forward in argument, and finally overruled.

It would, however, be misleading to think that the lawyers, as late as the nineteenth century, were prepared to hold that direct damage, caused by an unavoidable accident in the doing of a lawful act, would expose to liability. We shall see that some of these dicta were qualified in a way which shows that the new conception, that liability should be based on some moral shortcoming, was making its influence felt in the sphere of trespass.1 Others were contained in dissenting judgments,2 or only in argument.3 Others were said in the course of discussions as to whether trespass or case was the proper form of action--that is in cases in which the mind of the court was not addressed to this specific point.4 Lord Cranworths approval of the dictum in _Lambert v. Bessey_ was confined to cases of the type of _Rylands v. Fletcher_, which, as we shall see, are governed substantially by the mediaval principle of liability.5 Nevertheless, as a matter of historical fact, these dicta do, it seems to me, truly represent the mediaval view as to liability. But that mediaval view was too narrow; and both the ethical ideas and the social needs of modern times made it necessary that it should be modified.

Footnote 1: E.g. Weaver v, Ward (1617) Hob. 134

Footnote 2: E.g. Lambert v. Bessey (1681) Th. Raym, 421; Scott v, Shepherd (1773) 2 W. Bl, 89z.

Footnote 3: Above 454 nn. 6, 8, 9, 14.

Footnote 5: L.R., 3 H. of L. at p. 314- this is the principle of law \_applicable to cases like the present_11. I do not think that his dictum can be given, as Mr. Beven gives it, Negligence i 557, any more general application.

The earliest way in which this modification was effected was foreshadowed in the medieval period. It was, as we have seen, admitted that 'the act of God' or inevitable necessity would excuse.6 Much was made of this in the later cases; and in some of them the way was prepared for later developments, by statements that, if the defendant could prove inevitable necessity, he was not liable, because he was not negligent. Thus, in the case of _Weaver v. Ward_,7 the court said that the defendant might have succeeded, if he "had said that the plaintiff ran across his piece when it was discharging, or had set forth the case with the circumstances, so as it had appeared to the court that it had been inevitable, and that the defendant had committed no negligence to give occasion to the hurt"; and there is a long line of cases in which it was held that unavoidable necessity was a good defence. Thus in 1696, in the case of _Gibbons v. Pepher_,8 it was held that if the defendant had pleaded not guilty, and had given in evidence facts which showed that the damage was the result of an inevitable accident, "'this matter might have acquitted him upon the evidence." In 1767, in the case of \_Beckwith v. Shordike,\_1 the court clearly thought that an involuntary accident could not expose to liability ; and in 1823 Dallas, C. J., ruled 2 that, " if the accident happened entirely without default on the part of the defendant or blame imputable to him, the action (trespass) does not lie." There is a series of cases from the first half of the nineteenth century, in which it was held that, in an action of trespass, matters of excuse must be specially pleaded,3 which obviously shows that such matters of excuse, if proved, would be a good defence.

Footnote 1: 4 Burr. at pp. 2093-2094.

Footnote 1823: 1 CIVII. LIABILITY

jured by the traffic on the highway, so that the owner must bear his loss unless he can show that some third person is in fault--which he will not do merely by proving that the third person is the owner of the things which did the damage. Similarly the scienter rule, as applied to dogs, is based on the idea that a man is not liable for damage done by his dog unless he knew his dog was fierce.1 (ii) In one of the latest cases on this subject--_Holmes v. Mather2_--the rule that a man is liable only for the proximate consequences of his acts was used to show that, if the act of the defendant was a proper act, and the accident happened --not by reason of but in spite of it, he could not be held liable, because the act which was the proximate cause of the damage was not his act.3 This reasoning would, as we have seen, been accepted as valid in the Middle Ages.4 But the way in which this reasoning was used and applied was certainly not medieval, and showed that the conception of negligence had made its appearance even in the sphere of trespass.

Footnote 1: See the cases cited above 456 n. 3.

Footnote 2: (1875) L.R. to Ex. 267--an action for injury to the person occasioned by a runaway horse.

Footnote 3: * Here, as in almost all cases, you must look at the immediate act which did the mischief, at what the driver was doing before the mischief happened, and not to what he was doing next before what he was ten doing. If you looked at the last act but one, you might as well argue that if the driver had not started on that morning, or had not turned down that particular street, this mischief would not have happened. I think the proper answer is, you cannot complain of me unless I was immediately doing the act which did the mischief to you. Now the driver was not doing that. What I take to be the case is this : he did not guide the horses upon the plaintiff ; he guided them away from her, in another direction ; but they ran away with him, upon her, in spite of his effort to take them away from where she was," L.R. to Ex. at p. 268 _per_ Bramwell, B.

Footnote 4: Vol. iii 3So.

- If the act that does an injury is an act of direct force vi et armis, trespass is the proper remedy (if there is any remedy) when the act is wrongful, either as being willt, or as being the result of negligence," _per_ Bramwell, B., L.R. to Ex. at pp. 268-269 ; Mr. Beven, Negligence, i 588, says that, " the doing a lawful act is not in itself sufficient to save from liability, unless further it is done in circumstances that free the doing of it from faint of blame . and an act cannot be without blame and involuntary when there is free unfettered choice to act or refrain, independently of any considerations outside the will of the person whose decisions determines the action "' historically I think this correctly represents the earlier

### Crime and tort

made the defendant liable, even though the act was purely accidental, if it was an act of violence committed by him which directly damaged the plaintiff.1 As the result of the cases of the seventeenth eighteenth and nineteenth centuries, which we have just been considering, the defendant escaped liability, if his act was the result of such an unavoidable or inevitable necessity that his act was in effect involuntary ; and mitigations also had been allowed in certain cases of trespass committed by a defendant's animals.2 It would seem that: the definition of a trespass as an act of violence either wilful or negligent, which was laid down in _Holmes v. Mather_, in effect carried the mitigation of a defendant's liability for trespass a stage further. A "wilful" act, I think, means an act done intentionally. The word "wilful" obviously excludes involuntary acts, and I think also lawful acts which are voluntary, but which are done both without negligence, and without intention of harming the plaintiff. This seems clearly to go beyond the cases which we have just been considering, because it does not demand that the act should have been the result of such unavoidable necessity that it was in effect an involuntary act. In _Holmes v. Mather_ the act of attempting to curb the runaway horses was a lawful voluntary act ; it was not done negligently ; and there was no intention to harm the plaintiff. It was therefore held not to be a trespass to the plaintiff. The development of the law having reached this point, the decision in the case of _Stanley v. Powell,3_ that a lawful act, which damages another accidentally, gives rise to no cause of action, was inevitable. In that case the act of the sportsman in firing his gun was a lawful act ; and the hitting of the beater which followed was clearly not intended, and was found by the jury not to have been the result of negligence.4 It did not therefore comply with the definition of a trespass laid down in _Holmes v. Mather_.

Footnote 1: Vol. iii 375-377.

Footnote 4: Even, Negligence i 568-570, naturally dissents from this decision, above 457 n, 5; his view is that the act of the defendant vzas a voluntary act extended with possible danger to others, that it was therefore not without blame, and consequently was a trespass.

Thus negligence came to be recognized as the basis of civil liability in a large and miscellaneous class of wrongs to person and property, which covers the largest part of the sphere of torts. The introduction and extension of this conception through the action on the case, has done for the law of tort somewhat the same service as the product of another action on the case--the doctrine of consideration--has done for the law of contract.5 Just as it is through the doctrine of consideration that English law arrived at its conception of a simple contract, so it is through theCivil liability

conception of negligence that it has been able to fix the standard of carefulness which it requires one man to observe in his dealings with another. Both conceptions have grown up under the shadow of the law of actions ; and both, now that the old forms of actions are things of the past, have emerged as substantive legal principles. And just as the contract under seal remains in our modern law as a survival of the days before the doctrine of consideration was evolved,1 so in our law of tort there are survivals of ideas based upon the medieval principle of civil liability. One illustration is, as we have seen, the liability of the common carrier.2 A second is the technical meaning of the defence miscalled contributory negligence. Perhaps we may regard as a third the rule as to the measure of damages for negligence recently laid down by the court of Appeal in _In re Polennis.3_ Of the history of the second and third of these three bodies of doctrine I must at this point say something.

Footnote 1: Vol. iii 419-420. 2 Above 452-453. 3 \[T92T\] 3 K.B. 560.

### Crime and tort

and more generally grounded on negligence, this method of statement gained ground. But, though a change was made in the method of statement, the substance of the doctrine still retained a great deal of the medieval principle; and it is this mixture of medieval and modern principles which has given this doctrine its modern shape.

The change in the method of statement can be illustrated by the form of the plea of a defendant in a running down case.1 It runs as follows :--" that he, the defendant, just before and at the said time when he was driving the said cart and horse, in the said declaration mentioned . . in a careful moderate and proper manner; and that, whilst he, the defendant, was so driving the same, to wit, at the said time when, etc., the said Sarah \[the plaintiff\] negligently carelessly and improperly ran along and across the middle of the saic highway, near to and against the said horse and cart of the said defendant, and was thereby then cast and thrown to and upon the ground, and kicked, trampled upon, and run over, and crushed, as in the said declaration mentioned, without any default on the part of the defendant. And so the defendant in fact saith that the said hurt and damage in the said declaration mentioned were occasioned and happened to the said Sarah by and through the mere negligent careless and improper conduct of her the said Sarah, and not through the fault or improper conduct of the defendant." It is clear that the plea in substance appeals to the medieval principle that the plaintiff, having in effect been damaged by her own act, and not by the act of the defendant, could not recover. It was not really a plea that the plaintiff was to blame for negligence which had contributed to the accident; but a plea that her negligent act was the direct cause of the accident. But the fact that the doctrine was thus stated in terms of negligence--that emphasis was laid on the negligence rather than on the act--made a reconsideration of the old doctrine necessary from this new point of view. The results of that reconsideration were, in effect, to affirm the mediaval principle in the terms of the new phraseology--if my negligent act is the direct or immediate or proximate cause of the damage, I cannot recover; and thus to produce that unfortunate divergence between the real contents of the doctrine and its name, which, more than any other single cause, has led to difficulties in its application.

That the mediaval principle was, in effect, affirmed in the disguise of the new phraseology, is clear from the cases of the nineteenth and twentieth centuries. In 1809, in the well-known

**CIVIL LIABILITY**

case of _Butterfield v. Forrester_,1 the defendant had negligently put an obstruction in a highway with which the plaintiff had collided; but the plaintiff could not recover because, "if he had used ordinary care, he must have seen the obstruction; so that the accident appeared to happen entirely frem his own fault." In 1810 Lawrence, J., ruled that a plaintiff could not recover from a negligent defendant, because "the immediate and proximate cause " of the damage was his own uskillfulness as a driver.2 In 1838 Parke, B., said, " the rule is, that, although there may have been negligence on the part of the plaintiff, yet, unless he might, by the exercise of ordinary care, have avoided the consequences of the defendant's negligence, he is entitled to recover : if by ordinary care he might have avoided then, he is the author of his own wrong."3 In 1858, in the case of _Tuffv. Ivarman_, the Exchequer Chamber laid it down that, " the proper question for the jury is whether the damage was occasioned entirely by the negligence or improper conduct of the defendant, or whether the plaintiff himself so far contributed to the misfortune by his own negligence or the want of ordinary and common care and caution, that, but for such negligence or want of ordinary care and caution on his part, the misfortune would not have happened. In the first case the plaintiff would be entitled to recover, in the latter not ; as, but for his own fault, the misfortune would not have happened."4 In 1916 the manner in which the rule was laid down in _Tuffv. IVvarman_, was expressly approved by Lord Sumner.5

Footnote 1: ii East 6o ; approved by Esher M.R. i The Bernina (1857) 12 P.D. at p. 70.

Footnote 2: Flower v. Adam 2 Taunt. 314, at p. 317.

Footnote 3: Bridge v. Grand Junction Railway Co. 3 M. and W. at p. 248.

Footnote 4: 5. C.B. N.S. at p. 855.

Footnote 6: British Columbia Electric Railway Co. v. Loach \[1916\] I A.C. at pp. 724-725.

Footnote 7: The Bernina (1857) 12 P.D, at p. 89 _for_ Lindley, L.J. It should be noted that, though it is logically correct to say that such a case of contemporaneous negligence is a

### 462 Crime and Tort

case of _British Columbia Electric Co. v. Loach_,1 that the defendant's previous and continuing negligence, which prevented him from having the last chance of escape, was a sufficient answer to negligence on the part of the plaintiff, which was in fact the direct cause of the accident, is the first case in which a plaintiff, whose negligence was in fact the direct cause of the accident, was allowed to recover. So that, paradoxical though it may seem, it might be contended that this was the first case in which a consideration of the comparative negligences of the plaintiff and defendant was a real element in the defence. As I said in an earlier volume,2 the doctrine in the form in which it exists in our modern common law is anomalous. It is anomalous, because it represents an attempt to picce together two incompatible theories of civil liability--the medieval theory that liability is based on an act which causes damage, and the modern theory that liability is, as a general rule, based upon some moral fault, either of the negligent or of the intentional variety.3

Footnote 1: \[rg16\] I A.C. 719. \[2\] Vol. iii 378-379.

Footnote 2: Lindley, L.J., in The Bernina (r187) r2 P.D. at p. 89, after dealing with the case of contemporaneous negligence, above !61, and after stating that the rule in that case is the logical result of the common law principles, says, " why in such a case the damages should not be apportioned I do not profess to understand"; it is submitted that the historical evolution of the rule supplies the explanation; it is in fact the direct and logical consequence of the medieval principle.

Footnote 3: The authorities in favour of this view are very well summarised in Mr. R. A. Wright's unsuccessful argument for the appellants in In re Polemis \[rg2r\] 3 K.B. at pp. 564-566 ; and in Sir F. Pollock's article in L.Q.R. xoxviii 165.

Footnote 4: \[rg2r\] 3 K.B. 560.

Footnote 5: The authorities in favour of this view are very well summarised in Mr. R. A. Wright's unsuccessful argument for the appellants in In re Polemis \[rg2r\] 3 K.B. at pp. 564-566 ; and in Sir F. Pollock's article in L.Q.R. xoxviii 165.

Footnote 4: \[rg2r\] 3 K.B. 560.

Footnote 5: The authorities in favour of this view are very well summarised in Mr. R. A. Wright's unsuccessful argument for the appellants in In re Polemis \[rg2r\] 3 K.B. at pp. 564-566 ; and in Sir F. Pollock's article in L.Q.R. xoxviii 165.

Footnote 6: The authorities in favour of this view are very well summarised in Mr. R. A. Wright's unsuccessful argument for the appellants in In re Polemis \[rg2r\] 3 K.B. at pp. 564-566 ; and in Sir F. Pollock's article in L.Q.R. xoxviii 165.

Footnote 7: The authorities in favour of this view are very well summarised in Mr. R. A. Wright's unsuccessful argument for the appellants in In re Polemis \[rg2r\] 3 K.B. at pp. 564-566 ; and in Sir F. Pollock's article in L.Q.R. xoxviii 165.

Footnote 8: The authorities in favour of this view are very well summarised in Mr. R. A. Wright's unsuccessful argument for the appellants in In re Polemis \[rg2r\] 3 K.B. at pp. 564-566 ; and in Sir F. Pollock's article in L.Q.R. xoxviii 165.

Footnote 9: The authorities in favour of this view are very well summarised in Mr. R. A. Wright's unsuccessful argument for the appellants in In re Polemis \[rg2r\] 3 K.B. at pp. 564-566 ; and in Sir F. Pollock's article in L.Q.R. xoxviii 165.

Footnote 10: The authorities in favour of this view are very well summarised in Mr. R. A. Wright's unsuccessful argument for the appellants in In re Polemis \[rg2r\] 3 K.B. at pp. 564-566 ; and in Sir F. Pollock's article in L.Q.R. xoxviii 165.

Footnote 11: The authorities in favour of this view are very well summarised in Mr. R. A. Wright's unsuccessful argument for the appellants in In re Polemis \[rg2r\] 3 K.B. at pp. 564-566 ; and in Sir F. Pollock's article in L.Q.R. xoxviii 165.

Footnote 12: The authorities in favour of this view are very well summarised in Mr. R. A. Wright's unsuccessful argument for the appellants in In re Polemis \[rg2r\] 3 K.B. at pp. 564-566 ; and in Sir F. Pollock's article in L.Q.R. xoxviii 165.

Footnote 13: The authorities in favour of this view are very well summarised in Mr. R. A. Wright's unsuccessful argument for the appellants in In re Polemis \[rg2r\] 3 K.B. at pp. 564-566 ; and in Sir F. Pollock's article in L.Q.R. xoxviii 165.

Footnote 14: The authorities in favour of this view are very well summarised in Mr. R. A. Wright's unsuccessful argument for the appellants in In re PolemisCivil liability 463

case of _In re Polentis_ decides, in accordance with the preponderance of recent opinion,1 that the latter alternative is correct.

Upon purely logical grounds the justice of this conclusion is perhaps open to question. If we are basing liability upon an act which causes damage, without any reference to negligence, the rule is logical enough. But if we are tasing liability upon a negligent act, and if negligence consists in a failure to foresee results which ought reasonably to have been foreseen, it would seem that the negligent person ought only to be made liable to the extent to which he ought to have foreseen those results. In the law of contract it is admitted that the agreement of the parties governs the situation, so that only those damages can be recovered, " which may fairly and reasonably be considered either arising naturally, i.e. according to the usual course of things, from such breach of contract itself, or such as may reasonably be supposed to have been in the contemplation of both parties, at the time they made the contract, as the probable result of the breach of it."2 If the basis of the liability in contract--the agreement and its breach--is allowed to affect the measure of damages for breach of contract, it is a little difficult to see why the basis of the liability for negligence --the failure to foresee acts which ought reasonably to have been foreseen--is not allowed to affect the measure of liability for negligent acts.

Footnote 1: See Beven, Negligence (3rd ed.) iogios; Weld-Blundell v. Stephens \[1920\] A.C. at pp. 983-984 _etr_ Lord Summer.

But, upon historical grounds, the conclusion arrived at in the case of _In re Polentis_ is interesting for three reasons: firstly, because it shows the continuous bias cf the courts in favour of making a defendant liable for all the consequences of a wrongful act flowing directly thercfrom, without reference to his mental state.3 From this point of view it is comparable to the manner in which the courts have treated the defence of contributory negligence ; for, as in that case, the go-by is given to any consideration of the respective seriousness of the negligence cf the two parties, and the court merely looks to see to whose act of negligence the damage is directly attributable; 4 so in considering the measure of damages for a negligent act, the court gives the go-by to the basis upon which the liability is founded, by refusing to consider what damage might reasonably be expected to result from the negligence, and merely looks to see what damage has directly resulted. It seems to me that, just as Lindley, L.J., doubted the justice of the rule governing the defence of contributory negligence,5 so there is some point in the doubt of Vaughan-Williams, L.J., as to the justice of

### Crime and tort

the rule governing the measure of damages for a negligent act.1 In both cases the logical consequences of taking negligence as a basis of liability seem to be disregarded. Secondly, this rule is historically interesting because it shows the continued adherence to the very primitive principe laid down by Bacon 2 and Hale,3 that, in adjudicating upon questions of civil liability, the law looks, not at the extent of the demerits of the wrongdoer, but at the damage of the party injured. This is, in fact, the ground upon which the rule is based by Beven ; 4 and it is, it seems to me, the only logical ground upon which it can be based. Thirdly, the rule makes it very much easier to estimate the measure of damages ; for it makes it unnecessary to separate the items of damage fairly attributable to the defendan's negligence, from those not fairly attributable. In thus laying down a rule which makes for simplicity and the saving of labour, at the cost of neglecting other considerations which might lead to a different solution, the judges of this century have followed the example of their predecessors in other periods of the history of the common law.5

Footnote 1: "It seems to me difficult to be satisfied with a rule which would make the measure of damages, where the wrongful act is absolutely the same in two cases, differ absolutely according to the loss which has been sustained by the person who is injured by the collision--though the wrongful act of the wrongdoer is identical in both cases. Still the rule seems now to be fully adopted," The Racine \[1966\] P, at p. 277.

Footnote 2: Cited vol. iii 375.

Footnote 3: Cited ibid 376.

Footnote 4: The test is not the _mala menes_ of the actor, but the _damun et injuria_ to the suffer," Negligence i 08; as 1 have already pointed out, vol. ii 51-52, vol. iii 371-375, we can trace this principle back to the Anglo-Saxon period.

It follows that both the manner in which courts have treated the defence of contributory negligence, and the manner in which they have treated the measure of damages for negligence, illustrate the imperfect way in which the conception of negligence has, owing to its comparatively recent and gradual introduction into the common law, been reconciled with earlier conceptions of liability. In this, as in other branches of the common law at different periods--in the medieval law, for instance, as to conveyancing,6 as to incorproeal things,7 and as to the corporation sole 8 --the survival of earlier ideas has exercised a distorting effect upon later legal developments. We shall now see that there are certain other cases in which earlier principles of liability have in substance survived, but for reasons very different from those upon which they were originally based.

Footnote 8: We can see parallels in the way the medieval common law treated the husband's right to curtesy, vol. iii 187 ; the married woman's proprietary capacity, ibid 524 ; and the jury, vol. i 318.

Footnote 9: Vol. iii 224.

- The place of the medieval principle of liability in modern law.

CIVILABILITY 465

In our modern law there are two main classes of cases in which the medieval principle of liability is still applied. The first is the case where one man has done an act which infringes his neighbour's possession of, or right to possess, land or chattels. The second is the class of cases which, in our modern law, fall under the rule in _Fletcher v. Rylands.1_

Footnote 1: (f866) L.R. i Ex. 265 ; (f868) L.R. 3 H. of L. 330.

(i) We have seen that, in certain cases, acts which infringe another's possession of land or goods were and are justifiable." But, apart from these exceptions, any interference with possession or the right to possess is an act which will entitle the injured party to bring an action in tort. The fact that the act is done accidentally, or in good faith, or under a justifiable error, is no defence.3 At a time when civil liability for all wrongs, both to person and property, was based on this principle, the severity of the law would hardly seem to call for explanation. But we have seen that, in the fifteenth century. some mitigation of this strict liability was hinted at in the cases where the damage was inevitable or caused by "the act of God."4 It is not surprising, therefore, that the tendency to mitigate these rules should have been applied both to injuries to the person and to injuries to property.5 Thus we have seen that it was said in Edward IV.'s reign that, if a drover was driving cattle along $\\hat{z}$ highway, and by chance they got a mouthful of corn, no action lay; and that by custom the same rule applied if, in ploughing, the plough turned upon another's land.6 We have seen, too, that in Henry VII.'s reign Rede, J., had said that if two men's cattle were together in a field, one might drive the other's cattle till he could get them into a strait place where they could be svered;7 and in the same case the same judge said that, where the executors of a deceased man take the goods of another together with the goods of the testator, they are not liable to be sued in trespass, because they had no means of knowing which were the goods of the deceased, and which were the goods of a stranger.8 In one or two later cases, also, we see traces of the same tendency. We have seen that, in the absence of a scienter, a man is not liable for damage done by his dog,9 or, it would seem, for any of his other animals mansuetae naturae;10 and though, as we shall see, a man is absolutely liable if cattle break out of his close and trespass on that of Another,1 he is not absolutely liable for the trespasses of his cattle while being driven along the highway.2 In the case of \_Beckwith v. Shordike_3 the court seems to have thought that an involuntary and accidental entry on the plaintiff's close was no trespass; and in the case of \_Davis v. Saunders_4 damage done to the plaintiff's ship without the negligence of the defendant, and while he was doing a lawful act, was held to give no cause of action.

Footnote 1: Below 470-471.

Footnote 2: Above 456-457.

Footnote 3: In the case of _Beckwith v. Shordike_, the court seems to have thought that an involuntary and accidental entry on the plaintiff's close was no trespass; and in the case of \_Davis v. Saunders_4 damage done to the plaintiff's ship without the negligence of the defendant, and while he was doing a lawful act, was held to give no cause of action.

It is clear, therefore, that there was a tendency to apply to liability for damage to property the same sort of mitigation as was applied to damage to the person. But this tendency has not been allowed to develop to anything like the same extent as in the parallel case of damage to the person. It would not indeed be true to say that it has had no effect whatever.5 It would seem that in cases like _Davis v. Saunders_, where damage has been caused by vis major in the doing of a lawful act, there is no trespass and therefore no liability; and the strict rule of liability has certainly been modified, both in the case of dogs and other animals manusuette nature and not known to be savage, and in the case of damage accidentally caused by cattle while being driven along the highway.6 Moreover, in _Manton v. Brocklebank_ Lord Justice Atkin said 7 that " if \_Holmes v. Mather_8 be correctly decided trespass to goods must be the result of an act either wilful or negligent." This in effect asserts that liability for trespass to the person and to property rest upon the same principles. And ro doubt there is a sense in which this is true. If, in _Stanley v. Powell_,9 the shot, instead of hitting the beater, had hit a plate belonging to the host which had just been unpacked from a lunch basket, it is obvious that the plaintiff could not have been made liable. On the other hand, it is quite clear that for any asportation or conversion of a chattel, or for any act which amounts to the breaking of the plaintiff's close, a man is absolutely liable; and that many of the modifications of the strict rule, suggested in some of the earlier cases,10 are not accepted as law at the present day. It is clear that if one turns his plough, or accidentally enters upon another's land;11 or, it would seem, if executors take the goods of another under the Civil liability 467

bona fide and justifiable belief that they belong to the deceased;1 or if one converts another's goods, though he has no knowledge or means of knowledge to displace his bona fide and justifiable belief that they are his own2--all can be made liable in an action of trespass or conversion. How then can we explain this apparent contradiction that, though in theory liability for trespass to the person and to property rests upon the same principles, yet in practice liability for trespass to property is more severe, and, in many cases, does not differ very materially from the medieval principle?

Footnote 1: They might of course be entitled to an indemmity as against the estate if they had acted honestly and reasonably, see Re Raybould \[1990\] I Ch. 199.

Footnote 2: Hollins v. Fowler (1874) L.R. 7 H, of L. 757.

The explanation is, I think, this: even the smallest interference with possession or the right to possess is an unlawful act, and, because it is an unlawful act,3 it gives rise to an action for trespass or conversion. It is only if the act involves no aspiration or conversion in the case of a chattel, or no breaking of the plaintiff's close in the case of land, that it will only be tortious if it is either wilful4 or negligent; and such cases must obviously be rare. If we go further, and ask why the law has always adhered rigidly to the view that any such interference is an unlawful act, we shall, as Sir F. Pollock has pointed out,3 find the reason in the manner in which, owing to procedural conveniences, delictual remedies came to be used for the protection of ownership and possession. Ejectment,6 trespass cuare clausum fregit, trespass de bonis asportatis, and conversion,; were all essentially delictual remedies. But we have seen that they have come to be the regular actions, in which not only torts to possession and ownership can be redressed, but also rights to possession and ownership can be asserted. Thus "the distinction between proceedings taken on a disputed claim of right, and those taken for the redress of injuries, where the right was assumed not to be in dispute, became quite obliterated."8 And it should be remembered that the common law did not draw any hard and fast line between possession and ownership. A pessessor is treated as owner as against all the world save as againsts: the man with the better right.9 But rights of ownership have come to be regarded as absolute rights as against all the world.10 Therefore any infringement of these rights must be accounted an unlawful act which will give rise to an action for damages, whatever may be the cause for that

### Crime and Tort

infringement, and whether or not the person who has infringed them is morally blameworthy.1 As he is thus in effect absolutely liable for any act which has the result of infringing these rights, his liability is in all essentials governed by the same principles as governed all liability for tort in the medieval common law.2

Footnote 1: Pollock, Torts (tzth ed.) IT-IZ. 2 Vol. iii 375-377.

(ii) The principle of the class of cases which fall under the rule in \_Fletcher v. Rylands_3 is thus stated by Sir F. Pollock :4 "The law takes notice that certain things are a source of extraordinary risk, and a man who exposes his neighbour to such risk is held answerable to his neighbours as an insurer against consequent mischief." In effect his liability is essentially the same as that imposed by the medieval common law ; for, though absence of negligence will not excuse him, vis major,5 or the fact that the damage is caused, not by his own act, but by the act of the plaintiff or of a third person with whom he is in no way connected,6 is a good defence. His acts are at his peril ; but for damage which results, not from his act, but from the act of God or of the plaintiff or of a third person, he is not liable.7

Footnote 3: For the similarity of these rules to the general rules as to civil liability in the Middle Ages see vol. iii 378, 380.

Footnote 4: Torts (tzth ed.) 490,

Footnote 5: Nichols v. Marsland (r875-1876) L.R. to Ex. 255; a Ex. Div. I.

Footnote 6: Box v. Jubb (r879) 4 Ex. Div.76; he would of course be liable for the act of his servant, acting within the scope o' his employment, under the modern doctrine of employers' liability, and also for the acts of an independent contractor, see L.Q.R. xxv 320.

The decision in this case is the starting point of the modern law as to the liability of one who engages on a dangerous undertaking, because it stated broadly and clearly the nature of the liability imposed, and the cases to which it applies. It is clear that the rule could not have been laid down in this way in the medieval common law, because the principle of civil liability set out in that case was applied, not merely to dangerous acts which caused damage, but to all acts, if they came within some one of the forms of action recognized by the law--a truth which was, as we have seen, recognized by Lord Cranworth in his judgment in _Fletcher v. Rylands_.8 This rule could only emerge as a distinct and exceptional rule when the mediaval principle of civil liability had ceased to be the general rule. It follows, therefore, that, till well on in the nineteenth century, the time was hardly ripe for its enunciation. But though, as expressed in _Fletcher v. Rylands_, it is a modern rule, it has at least two ancient roots. In the first place, it gives effect to the idea, expressed in different ways at different periods, that the doing of dangerous things should giveCIVIL LIABILITY\*\*

rise to a stricter liability. In the second place, it is influenced by the survival of the medieval rules as to damage to property which I have just described \[1\].

(_a_) The principle that the doing of obviously dangerous acts should impose a stricter liability was recognized in the Middle Ages. One of these cases was the liability imposed on households to keep their fires from causing damage. The form which this stricter liability took was not the form taken by the rule in _Rylands v. Fletcher_, for that rule was then the general rule of civil liability. It took the form of a rule that a householder was liable for damage caused by his fire, even though that damage was occasioned not by his own act, but by the act of his servants or guests \[2\]. This strict rule of liability for damage caused by fire was recognized in 1698 in the case of _Tuberville v. Stamp_ \[3\], but it was altered by the Legislature in 1707 \[4\]; and liability for the acts of one's servants, whether in the course of doing a dangerous act or not, is now governed by the modern principle of employers' liability \[5\]. But this medieval rule is clearly one illustration of the recognition of the first of the ideas on which the rule in _Rylands v. Fletcher_ is based.

Another illustration is to be found in the development of the law as to the keeping of animals. We have seen that liability for the damage caused by ordinarily tame animals was modified by the growth of the scienter rule \[6\], but, as Hale points out, the old strict liability remained if scienter could be proved, or if the animal was naturally wild \[7\]. In 1700, in the case of _Mason v. Keeling_, Holt, C.J., stated the law in the same way as Hale had stated it. He said \[7\] if it had been said that the defendant knew the dog to be _ferva_, I should think it enough. The difference is between things in which the party has a valuable property, for he shall answer for all damages done by them \[; but of things in which he has no valuable property, if they are such as are naturally

#### 470.1 Crime and Tort

mischievous in their kind, he shall answer for the hurt done by them without any notice ; but if they are of a tame nature there must be notice of the ill quality."1 Holt, C.J., thus lays down the modern rule as to liability for the acts of dangerous animals clearly enough ; but the distinction which he drew, based on the question whether or not the defendant had a valuable property in the animal, calls for an explanation. It was said as late as 1676 that, if a savage animal escaped, the former owner ceased to be liable for any damage afterwards done by the animal.2 This was based on the view that such an animal by its escape became a res nullius, so that his former owner, because he had ceased to be the owner, ceaeed to be liable for its acts.3 This rule has ceased to be law in the form in which it was stated in 1676,4 though possibly it still influences the law as to the trespass of such animals on to another's land.5 Holt probably had this rule in his mind ;6 but what he was chiefly thinking of was the very much stricter liability which the law then imposed, and still imposes, on a person whose cattle trespass on another's property. It is true that his statement of the law was not accurate ;7 for, as we have seen, it was not true that the owner of cattle was bound to answer for all damage done by them.8 But he was and is absolutely liable if they escape from his land, and trespass 01 to another's land. This liability is another root of the rule in _Rylands v. Fletcher:_ but its consideration falls more properly under the following head.

Footnote 1: 1z Mod. at p. 335: 'Mitchil v., Alestree r Vent. 395 for Twisden, J.

Footnote 2: 3: Vol. vii 492; 493 ; see Holmes, Common Law 22, for the view that this dictum was influenced, perhaps unconsciously, by the notion that the ground of liability was nozal, i.e. based on the ownership of a guilty thing.

Footnote 4: May v. Burdett (1846) g Q.B, at p. 113.

Footnote 5: Thus in Cox v. Burbridge (1863) I3 C. B. N.S, at p. 438 Williams, J., says, " if 1 am the owner of an animal in which by law the right of property can exist, I am bound to take care that it does not stray into the land of my neighbour."

Footnote 6: Ibid at p. 440 for Willes, J. ; as he says, Holt's dictum " " exhausts itself on the liability of the owners of horses and oxen for trespasses committed by them on land."

Footnote 7: Ibid at pp. 440-441 for Willes, J. ; as he says, Holt's dictum " exhausts itself on the liability of the owners of horses and oxen for trespasses committed by them on land."

Footnote 8: Above 456, 465-466. * Holmes, Common Law to.

Footnote 9: Ib, r c. g, cited Wigmore, op, cit., Essays A.A.L.,H, iii 514 n. 4-

($b$) The absolute liability of the owner of cattle if they escape from his land, and trespass on to the land of his neighbour, has ancient roots. It may have originated in the primitive idea that animals which had done damage were in some way guilty, and that the owner must be made liable as a means " of getting at the animal which was the immediate cause of offence." * But, certainly by the fifteenth century, these primitive ideas had disappeared. The rule that the owner of trespassing cattle was liable had become a fixed ru.e of law, as to the reasonableness of which the author of the Doctor and Student had doubts;10 but there can be no doubt that it could be and was explained onCivil. liability

somewhat the same grounds as the rule which made anyone liable who infringed another's possession or right to possession.1 As we have seen, the right to a free enjoyment of possession is as much an incident of ownership as the right to its undisturbed possession. In the sphere of the real actions the former right was protected by the assize of nuisance, as the latter right was protected by the assize of novel disseisin.2 Liability for trespass by cattle was put on this proprietary ground in 1480;3 and clearly, if this liability is regarded in this way; it is in effect a liability for nuisance. The nature of this 'liability was, as we have seen, generalized and elucidated by the action on the case for nuisance.4 Thus, in 161r, it was stated specifically in _Aldred's Case_ that liability for nuisance depended on the principle "sic utere tuo ut alienum non liedas ";5 and in 1705, in the case of _Tenant v. Goldwin_, the rule as to liability for cattle trespasses was based upon the same principle. "Every man," said Holt, C.J.,6 "must so use his own as not to do damage to another. And as every man is bound so to look to his cattle, as to keep them out of his neighbour's ground, that so he may receive no damage; so he must keep in the filth of his house of office, that it may not flow in upon and damnify his neighbour." Clearly, if this liability is put upon this proprietary ground, it must be as absolute as the liability for the disturbance of possession. This, it would seem, is the true reason for this liability, and not "the archatic one that trespass by a man's cattle is equivalent tc trespass by himself,"7

Footnote 1: " Quant il mit eins ces beasts en son commen, luy covient occuper son commen issint que il ne fait tort a auter home, et a le terre en quel il doit cest commen avoir, ne soit enclose, come est icy, donques covient de garder les beasts en le commen et hors de chesun estranger,"Y.B, 20 Ed. IV. Mich. pl. to _for_ Brian, C.J.

Footnote 2: Toil, iii. 1. 3 Above n. 1. 4 Vol. vii 329-330, 340-341. 9 O. Rep. at f. 5oa. 6 2 Ld. Raym. at p. toga. 7 Pollock, Torts (1zth ed.) 504, says, " observe that the only reason given in the earlier books (as indeed it still prevails in quite recent cases) is the archatic one that trespass by a man's cattle is equivalent to trespass by himself"; cp. BI. Comm. iii 21r; but the cases cited would seem to show that some of the judges at any rate had a clear view of the true reason for this liability. 8 (1866) L,R, r Ex, at pp. 279-280; (1868) 3 H. of L. at pp. 339-340.

### Crime and Tort

himself by showing that the escape was owing to the plaintiff's default ; or perhaps that the escape was the consequence of vis major or the act of God. . The general rule as above stated seems on principle just. The person whose grass or corn is eaten down by the escaping cattle of his neighbour, or whose mine is flooded by the water from his neighbour's reservoir, or whose cellar is invaded by the fifth of his neighbour's privy, or whose habitation is made unhealthy by the fumes and noisome vapours of his neighbour's alkali works, is damnified without any fault of his own ; and it seems but reasonable and just that the neighbour, who has brought something on his own property which was not naturally there, harmless to others so long as it is confined to his own property, but which he knows to be mischievous if it gets on his neighbour's, should be obliged to make good the damage which ensues if he does not succeed in confining it to his own property." And then he went on to point out that the law was the same in the case of a person who kept a mischievous animal--he must keep it at his peril.1 It is clear, therefore, that whether we look at the nature of the liability thus imposed, or at the character of the defences permitted,2 the underlying principle is the same as that which governed civil liability is general in the medieval common law.3

Footnote 1: L.R., r Ex., at p. 28t.

Footnote 2: See as to this L.Q.R. xxv 32t.

Footnote 3: Vol. iii 375-377, 378, 38o.

In these two classes of cases, therefore--the case where a man has interfered with his neighbour's possession of or right to possess land or chattels, and cases coning under the rule in _Rylands v. Fletcher_--the medieval principle of civil liability still holds--but for reasons very different from those on which it rested in the Middle Ages. These cases, therefore, are two of the strongest illustrations of Holmes' aphorism that, "when ancient rules maintain themselves . new reasons more fitted to the time have been found for them, and they gradually receive a new content, and at last a new form from the grounds to which they have been transplanted."4

Footnote 4: The Common Law 36 ; for another instance of its application in another branch of the law see vol. ii 177.

We must now turn from these cases, in which the older principles have survived in another form, to the case where a wholly or almost wholly new principle of liability has been introduced into the common law.

(3) The doctrine of Employers' Liability.5

Footnote 5: Much the best account of the history of the law on this topic will be found in Wigmore, op. cit., Essays A.A.L.L.H. iii 52o-537.

Of the principles applied by the medieval common law to theCIVII. LIABILITY

- 473 master's or employer's liability for the acts of his servant I have spoken in an earlier volume ; 1 and we have seen that these principles were applied throughout this period.2 It is true that in 1676, in the case of _Mitchil v. Aletsree_, the court was, on the facts, prepared to presume the existence of a special authority to do the act--bringing unruly horses into Lincoln's Inn Fields--which had caused the damage to the plaintiff.3 But it is clear from the case of \_Kingston v. Booth_4 in 685 that, without such special authority, the master could not be made liable for his servant's torts. In that case Withins, Holloway, and Walcot, JJ., resolved, firstly, that, "if I comrand my servant to do what is lawful, and he misbehave himself or do more, I shall not answer for my servant, but my servant for himself, for that it was his own act ; otherwise it was in the power of every servant to subject his master to what actions or penalties he pleased "; and, secondly, "if I command my servants to do a lawful act . . . and bid them take care they hurt not the_plaintiff; if in this doing my servants wound the plaintiff, in trespass of assault and wounding brought against me, I may plead not guilty, and give this in evidence, for that I was not guilty of the wounding." It is clear, therefore, that, right down to the Revolution, the law on this subject was substantially the same as it was in the Middle Ages.

But we have seen that the seventeenth century had been a century of expansion and change in all branches of commerce and industry. Even in the Middle Ages the law merchant favoured a more extended liability than that recognized by the common law;5 and we have seen that, in the early days of the seventeenth century, the civil law rules applied by the court of Admiralty exhibited the same characteristic.6 But, as the result of the Great Rebellion, the common law had absorbed the greater part of the commercial jurisdiction formerly exercised by the court of Admiralty.7 Both the changed commercial and industrial conditions, and the enlarged commercial jurisdiction of the common law courts, were making it clear that a reconsideration of the mediaval rules which governed this branch of the law was necessary. But the judges of the courts of common law who disgraced the bench in the latter years of Charles II.'s and in James II.'s reigns,8 were not competent to tackle what was in effect a complicated problem of law and public policy. It was not till after the Revolution, when the quality of the bench had been restored, that any effort was made to deal with it ; and fortunately for the common law it found

### Crime and Tort

in Holt, C.J., a lawyer who, by reason both of his technical equipment and his knowledge of the commercial needs and conditions of the day, was eminently qualified to do for this branch of the law what he had done for many other branches of commercial law,1

Footnote 1: For an account of Holt see vol. vi 264-268, 270-272, 516-522.

The reports show that it was his decisions that laid the foundations of the modern law. In 1691, in the case of _Boson v, Sandford_,2 an action on the case was brought by a shipper of goods against the owners of the ship, for damage caused to the goods by the negligence of the master. Eyre, J., gave judgment for the plaintiff on the narrow ground that the owners of the ship were in _effect carriers_,3 and were therefore liable by reason of the special liability for the acts of their servants imposed on carriers; 4 and it would seem that some reliance was placed on the medieval rules which made sheriffs and other agents of the crown liable for the misdeeds of their underlings.:5 But Holt rested his judgment on the broad principle that "whoever employs another is answerable for him, and undertakes for his care to all that make use of him." 6 In 1698, in the case of _Tuberculosis v, Stamph_,7 the plaintiff complained that, being possessed of a close of heath adjoining that of the defendant, the defendants servant lit a fire on the defendant's close which consumed the heath on his close. It was held that he had a good cause of action. Here again it was possible to ground the decision on the medieval rules as to liability for fire; 8 and apparently the majority of the judges rested their decision on this ground.9 But Holt doubted whether the medieval rule applied to any fires but those in houses; 10 and he put the liability upon the broader ground that, "if my servant both anything prejudicial to another, it shall bind me, when it may be presumed that he acts by my authority, being about my business."11 Similarly in 1699 he ruled at nisi prius that, if A's servants driving A's cart collide with B's cart and cause damage, A is liable; 12 and we have seen that in 1701, in the case of _Lane v, Cotton_,13 he came to the misCIVII. LIABILITY 475

taken conclusion that the postmaster-general was liable for the loss of a letter occasioned by the negligence of an official in the post office,1 on the authority of the medieval rules which made sheriffs bailiffs and others liable for the misdeceds of their deputies.2 In 1709, in the case of _Hern v. Nichols,3_ he held that a merchant was liable for the fraud of his factor--" for seeing somebody must be a loser by this deceit, it is more reason that he that employs and puts a trust and confidence in the deceiver should be a loser than a stranger."4 From the frst, however, this liability was limited to the case where the servant was about his master's business. In 1698 it was held at nisi prilus that " where a servant usually buys for his master uppor " tick," and takes up things in his master's name, but for his own use, that the master is liable, but it is not so where the master usually gave him ready money ";5 and in 1699, in the case of _Middeton v. Fowler,6_ Holt explained the principle to be that " no master is chargeable with the acts of his servant, but when he acts in execution of the authority given by his master, and then the act of the servant is the act of the master." The same principle was again enforced in 1704 in the case of \_Ward v. Evans.\_7 At the same time other cases laid it down, in conformity with the medieval principle,8 that if the master had profited by the act or contract of his servant the master was liable.9

Footnote 1: Vol. vi 267-268, 2 Vol. ii 387, 3 r Salk, 289.

Footnote 4: He gave a similar explanation of the rule in Sir Robert Wayland's Case, 3 Salk, 234--" the master is chargeable, for the master at his peril ought to take care what servant he employs ; and it is more reasonable that he should suffer for the cheats of his servant than strangers."

Footnote 5: Boulton v. Arlsden 3 Salk, 234 ; so it was said, ibid at p. 235, that, " " a note under the hand of an apprentice shall bind his master, where he is allowed to deliver out notes, though the money is never applied to the master's use. But where he is not allowed or accustomed to deliver out notes, then his note shall not bind the master, unless the money is applied to the master's use."

Footnote 6: r Salk, 235, 7 Ibid 444.

Footnote 8: Vol. iii 528.

Footnote 9: " Where the master gives the servant money to buy goods for him, and he converts the money to his own use, and buys goods upon 'tick,' yet the master is liable, so as the goods come to his own use, otherwise not," Boulton v. Arlsden (1695) 3 Salk, 324.

It is clear from these cases that the origins of this new principle were very mixed. But I think it probable that two main streams of doctrine contributed to it--firstly a Roman influence which filtered through the court of Admiralty and mercantile custom, and secondly an English influence derived from the medieval modifications of the general common law principle governing the master's liability.

(i) We have seen that doctrines, ultimately derived from the Roman learning as to quasi-delict, were applied in the court of Admiralty to settle the liability of the master and owner of a ship to the shipper and passengers for the del

### Crime and Tort

liability of the owner to the same persons for the delicts of the master.1 It is certainly significant that the case of _Bason v. Sandford2_--the earliest case in which the doctrine appears in a common law court--was an action by a shipper against the owner for damage suffered by the master's negligence. Moreover it is not unlikely that, as the necessities arising from a larger commerce were felt in the court of Admiralty at an earlier date than in the courts of common law, the court of Admiralty should introduce ideas which helped to establish the new principle which was demanded by those necessities. But it is clear that this was only one of the influences which went to the making of the modern principle. If it had been the only influence, probably the doctrine would have taken the form which the author of a recent work on this subject would like to have seen it take. It would have made an employer liable for his servants' torts only to those who were in some sort of contractual relation with the employer.3 But the cases of this period show that it was not so limited by Holt. Here again it is just possible that the Roman rules as to the actions de effussi aut dejectis had some slight influence;4 but I think that it is clear that the influences which made for this more extended rule came mainly from the medieval common law.

Footnote 1: Above 250-253.

Footnote 2: This is the main argument of Dr. 34y's ingenious book on Vicarious Liability.

Footnote 3: In Noy's Maxims c, 44 it is said that * we shall be charged if any of our family lay or cast anything into the highway to the nuisance of his Majesty's liegepe **'**' and Holt, C.J., in Tuberville v. Stamp; 1698 r Ld. Raym, at p. 264 ruled that **'if my servant throws dirt into the highway I am indelicide**'; this rule is stated by Blackstone, Comm. i 49, like Noy stated it, as a rule which made a master liable for the acts of his family; Blackstone compares it to the Roman rule set out in Institutes 4. 5. 1; and it is just possible that that may be its origin; on the other hand it may be a solitary survival of the liability of the householder for his " mainpaest," vol. iii 383.

Footnote 5: (1698) r Ld. Raym, 264; above 474.

(ii) The rule which made households liable for damage by fire caused by their servants, appears in _Tuberville v. Stamp;_;5 and the rule as to common carriers in _Bason v. Sandford.6_ The rule that a man might be liable if he had undertaken to do something, and, through his servant, had done it badly,7 appears in _Wayland's Case_;8 and the rule that a master might be liable if property acquired by his servant came to his use appears in _Boston v. Arlesdn.9_ Moreover the influence of this rule was long felt in the idea, which appears in _Tuberville v. Stamp,_ that the fact that the act was for his master's benefit was a reason for holding the master liable10--an idea the effects of which were not wholly eliminated till 1912.11 The medieavl ruCivil liability 477

bailiffs and other officers of the crown for the misdeeds of their underlings, appears in the case of _Boson v. Sandfor.i_;1 and we have seen that it was the basis on which Holt rested his dissenting judgment in the case of _Lane v. Cotton_.2

Footnote 1: 3 Mod. at pp. 323-324; above 474.

Both these streams of doctrine thus joined to create the modern doctrine of employers' liability; and, as the technical reasons assigned for the decisions which established it were very various, it followed that the basis on which it rested was not at first clearly perceived. It was sometimes put on the ground that the master by implication undertakes to answer for his servant's tort--which is clearly not true. Sometimes it was put on the ground that the servant had an implied authority so to act--which again is clearly not true. Sometimes it was grounded on the fiction that the wrong of the servant is the wrong of the master,3 from which the conclusion was drawn that the master must be liable " because no man shall be allowed to make any advantage of his own wrong";4 and sometimes on the ground that the master who chooses a careless servant is liable for making a careless choice.5 Blackstone gives all these reasons for this principle. In addition, he deals with the totally different case where a master has actually authorized the commission of a tort; and cites most of the medieval cases of vicarious liability with the special reasons for each of them.6 It is not surprising that he should take refuge in the maxim "qui facit per alium facit per se,"7 or that others should have used in a similar way the maxim "respondeat superior."8 His treatment of the matter illustrates the confusion of the authorities; and it is noteworthy that he does not allude to the true reason for the rule--the reason of public policy--which Holt, C.J., gave in _Hern v. Nichols_ and in _Wayland's Case_.9

Footnote 1: 3 Mod. at pp. 323-324; above 474.

Footnote 2: 5 Viscount Canterbury v. the Queen (rSSSS2) 4 S.T. N.S. at p. 778 _der_ Lord Lyndhurst ; Tobin v. the Queen (18SS4) t6 C.B. N.S. at p. 350.

Footnote 3: 4 Wigmore, op, cit. Essays, A.A.L.H. ii 532.

Footnote 5: Viscount Canterbury v. the Queen (rSS42) 4 S.T. N.S. at p. 778.

Footnote 6: 5 Comm. i 477-420.

That this was the true reason for the rule was only gradually perceived. As Professor Wigmore has pointed out, the judges at first relied mainly on the theory of implied command,10 sometimes classing the liability as quasi-contractual;11 and, considering the

### 478 Crimie and Tort

character of the older rule which this modern rule had superseded,1 this was only natural. The notion of a liability resting on an implied command could easily be represented as a development of the notion of a liability resting upon an express command. But, at the end of the eighteenth and the beginning of the nineteenth centuries, it began to be more plainly seen that this liability did not depend on agency at all, It followed that these phrases about implied commands were out of place. Therefore the phrases " scope or course of employment or authority " take their place.2 This development helped the judges at length to see that the rule rested ultimately on grounds of public policy. " The rule of liability," said Lord Brougham in 1839,3 " and its reason I take to be this : I am liable for what is done for me and under my orders by the man I employ, for I may turn him off from that employ when I please : and the reason that I am liable is this, that by employing him I set the whole thing in motion ; and what he does, being done for my benefit and under my direction, I am responsible for the consequences of doing it." It was put on the same grounds by Chief Justice Shaw of Massachusetts : " This rule," he said,4 " is obviously founded on the great principle of social duty, that every man in the management of his own affairs, whether by himself or by his agents or servants, shall so conduct them as not to injure another ; and if he does not, and another thereby sustains damage, he shall answer for it. If done by a servant, in the course of his employment, and acting within the scope of his authority, it is considered, in contemplation of law, so far the act of the master, that the latter shall be answerable _civinter_. . The maxim _respondate superior_ is adopted in that case, from general considerations of policy and security." But both in Lord Brougham's and in Chief Justice Shaw's statements we can see traces of the old theories. Lord Brougham introduces a phrase about the thing done being for the benefit of the master ; and Chief Justice Shaw introduces words which are reminiscent of agency. A little later Lord Cranworth, though he makes use of the same phrases, stated the principle quite clearly as an absolute duty to guarantee third persons against hurt arising from the conduct of a business.5 This truly describes the

## Civil Liability

### 479 nature of the liability.

As Sir F. Pollock puts it,1 "'the liability of an employer to the public for injuries caused by the acts and defaults of his servants, is analogous to the duties imposed with various degrees of stringency on the owners of things which are or may be sources of danger to others."

Footnote 1: Essays in Jurisprudence and Ethics 128.

We shall see in the next chapter that the older theory as to the basis of the liability of the employer, which grounded it upon some negligence in the employer, either because the act of the servant was imputed to him or because he was negligent in employing an inefficient servant, has had some very unfortunate consequences in the rules applied to the liability of the crown for the acts of its servants. We shall see that, if the true view of the nature of the employer's liability had been reached at an earlier date, these consequences might have been avoided.2

Footnote 2: Ahove 476.

But what, if any, are the limits to this absolute duty ? We have seen that, from its first appearance, the courts wisely refused to limit it by confining it to a duty to compensate only those who were in some sort of contractual relation with the employer;3 and, in consequence, a doctrine laid down at the end of the seventeenth century, has proved capable of regulating satisfactorily the relations of employers to the public at large under the changed industrial conditions of this twentieth century;\_ But, at the beginning of the nineteenth century, the question of the extent of the employer's liability was raised in two classes of cases. The first class of these cases centres 'round the question, Who is a servant? The second class of these cases centres round the question, What is the employer's liability if the person injured is not an outsider but a fellow-servant of the tortfeasor ?

Footnote 3: "At the trial I entertained great doubts with respect to the defendant's liability in this action. He appeared to be so far removed from the immediate author of the nuisance, and so far removed even from the person connected with the immediate

### 480 CRIME AND TORT

cases of \_Laughter v. Pointer_1 and \_Reedie w. L.N.W.R.2 have justified these doubts, and established the modern rule that a master, though liable for the acts of his servant, is not as a general rule liable for the acts of an independent contract.3 But that rule is not without exceptions;4 and this rule, as mitigated by these exceptions, has been found to be a fair qualification of the employer's liability to the public.

Footnote 1: (r826) 5 B. and C., 547.

Footnote 2: (r849) 4 Ex. 244.

Footnote 3: Pollock, Torts (rzth ed.) 79-81.

Footnote 4: These exceptional rules are well summarized by Underhill, Torts (gth ed.) 63-64.

(ii) It is far otherwise with the rule applied by the common law in the case where the person injured by a servant is a fellow- servant. It is curious that no case, in which an action was brought against an employer for an injury caused by one of his servants to another, is known to have occurred till the case of _Priestley v. Fowler.5_ In 1837 the court in that case were unanimous that no such action would lie. To a large extent they grounded their judgment on the injustice of imposing a new, and apparently indefinite series of liabilities, upon masters.6 So far as the judgment was based on technical reasons it proceeded on three grounds : firstly, from the relation of master and servant there cannot be implied an obligation on the part of the master to take more care of the servant than he takes of himself; and any obligation of this kind, which he is under, is satisfied if he uses his best endeavours to safeguard his servant. Secondly, the servant, by entering on anc continuing in the employment has chosen to abide the risk, of which he is likely to know as much if not more than the master. Thirdly, to allow such actions would be a direct incentive " to omit that diligence and caution which he is in duty bound to exercise on behalf of his master, to protect him against the misconduct or negligence of others who

## 11 Civil. liability

1.1 \_Serve him,"\_1 This judgment was followed a few years later by Chief Justice Shaw of Massachusetts.2 His judgment is admitted to be the best exposition of this doctrine, generally called the doctrine of common employment, which had been first laid down in the case of _Priestley v. Fowler_. He adopted some of the reasoning of that case;3 but he put the doctrine on a very much firmer technical ground. He pointed out that the duties existing as between the employer and his servant were purely contractual. They were governed entirely by the contract. The contract contained no express clause by which the master undertook to indemnify the servant against the act of his fellow-servant, and no such term could be implied. On the other hand, the duties existing as between the employer and the public were not contractual, and the law had determined that a duty to indemnify the public for the torts committed by his servant in the course of his employment did exist.4 There was thus a good technical reason for drawing this distinction between liability for wrongs committed by servants against fellow-servants, and wrongs committed by servants against outsiders; for, in the former case, the rights of the master and servant, having been fully settled by their contract, no place was left for any other liabilities not contemplated by the contract. Moreover, this reasoning answered the objection that, in a large undertaking, a servant has no more means of control over a fellow-servant than any other member of the public--" the master in the case supposed is not exempt from liability, because the servant has better means of providing for his safety, when he is employed in immediate connexion with those from whose negligence he might suffer; but because the _implied contract_ of the master does not extend to indemnify the servant against the negligence of anyone but himself; and he is not liable in tort, as for the negligence of his servant, because the person suffering does not stand towards him in the relation of a stranger, but is one whose rights are regulated by contract express or implied."5 But, after all, these decisions to a large extent ignored the conditions of modern industry. However good the technical reasons which could be adduced for the doctrine, it was quite clear that, in a great undertaking like a railway, a servant has as little opportunity of guarding against the negligence of many of his fellow-servants as a member of the public; and he could hardly be said to have consented to abide risks of which he had neither knowledge nor means of knowledge. The limitation thus imposed on the liability of employers was far too strict--a truth which is

### Crime and tort

emphasized by the fact that no other country in Europe has adopted any similar doctrine.${}^{1}$ In these latter days the result of this over-strictness has been that the Legislature has imposed a liability on employers, which errs almost as much in the direction of liberality. For under the modern Workmen's Compensation Act${}^{2}$ a workman, though he has voluntarily entered the particular business, is better protected from the risks incident to its conduct than a member of the public--an extravagant degree of protection, which obviously removes one of the chief incentives to carefulness on the part of the servant.

It is obvious that the development of the law of crime and tort, during this period and in the succeeding centuries, has been affected, almost as much as the law of contract, by the new influences which began to be felt during this period. The new territorial state and its larger control over the actions of its subjects, the new relations between church and state, the growth of industry and commerce--all had a large influence in shaping these branches of the law. Much that was mediaeval was retained, and more was made the foundation of an elaborate superstructure of rules, which, in many cases, have in effect created entirely new bodies of law. Much that was admittedly wholly new was added to meet new needs and new problems. Though in the criminal law too many antiquated rules both of substantive and adjective law were retained, yet, on the whole, the professional developments of this period in the law both of crime and of tort are a credit to the common law. As we can see from the later history of many of the branches of law which I have sketched in this chapter, they have resulted in the creation of a body of principles which has proved to be at once flexible and permanent--a body of principles, which, on the whole, has met adequately the constantly new needs of a progressive and expanding state.

At this point, to adapt the phraseology of the Roman Institutes, I leave the history of the technical development of the law of Things, and turn to the corresponding development of the law of Persons.

${}^{1}$ Pollock, Torts (tzth :d,) rot, and see g3 n. (f).

${}^{2}$ 6 Edward VII. c. 58.

## Index

A Agency, 222-229; unknown to primitive systems of law, 222; agents to acquire property, 222; to contract, 222-224; see 266, 267.

Acceptrance for Honour, I36.

Accappro, The, original nature of his liability to the drawer, I38, I6I-I62; his liability to the payce, I38-I39, I40, I44, I62.

Accessories, 305.

Accident, how it came to be a defence to an action for trespass, 456, 457-458.

Accident Insurance, character of, 295; not known in the sixteenth and seventeenth centuries, 295-296; beginnings, of in England, 297-298.

Accommodation Paper, I69.

Accord and Satisfaction, why satisfaction was needed, 82-83; payment of a lesser sum not valid as, 40, 83; effect on these rules of growth of validity of executory contracts, 40-41, 83-84; uncertainty as to the law, 84-85.

Account, action of, influence on doctrine of consideration of the idea that it lies for third persons whose use money is paid, I3; used to enforce quasi-contractual relations, SS.

Act of God, defence to an action of trespass, 455; expansion of this idea, 455-456.

Actio Personalis, etc., application of to trover, 38.

Acts or Bankruptcy, 237-238; jurisdiction to determine, 240-24.

Adepuacy, not needed for a valid consideration, I7.

Administrator, validity of promise of to pay debts and legacies, 27-28, 30.

Administrator, court of, instruments payable to bearer cr attorney cn the records of, i48; bills of exchange on the records of, i52; its jurisdiction in insurance cases, 283-284, 288; rules as to insurance evolved by, 290-291; influence of law administered by on doctrine of employers' liability, 475-475.

Admiralty Dhoits, 269.

Adspitulati10, I32, I33.

Affirmation, allowed in place of an oath, 413, 416.

Affrays, 326.

African Company, The, 209, 210.

A Agency, 222-229; unknown to primitive systems of law, 222; agents to acquire property, 222; to contract, 222-224; see _Brokers, Factors_; liability of principal for acts of agent--the medieval principle, 997-308; need for change--Hot's decisions, 229, 252-253, 474-475; principles applied by the Admiralty, 249-252; their influence on the common law, 253; see _Employers' Liability_.

Agreement, the essence of contract, I; in continental law, 43, 44-45; contrast with English law, 46-47; how greater weight might be given to in English law, 48; operation of in discharge of contract, 80-88; effect of on a contract under seal, 80-87; on a simple contract, 87-85; see _Accord and Satisfaction_; the effect of a novation, 85-87.

Alien Enemies, insurances on goods of, 291.

Aliens, made liable to the bankruptcy laws, 237.

Alternation of a written contract, effect of, 64-65.

Ames, 85, 92.

Amsterdam, bank of, I80-I87, I83; contrasted with the Bank of England, rSS.

Anderson, C.J., 57, 389.

Anglo-Saxon, Land Books, I18; laws as to defamation, 334-335.

Animals, liability for trespasses of, 456-457, 465-466, 470-471; for damage done by, 469-470; see _Wild Animals_.

Assaladus, I42.

Anti-Christian Bellefs, 405, 408-409, 410, 413-414, 414-417, 420.

Anvers, the fairs of, 129.

Apostasy, 408.

Apprentices, contracts in restraint of trade imposed on, 59, 61, 62.

Aquinas, I03.

Aararic Law, suggested origin of bill of exchange in, I33-134; influence of European commercial law, I33.

Aristotle, views of as to usury, Ior.

Aristotle, of a ship, effect of Admiralty process of on the maritime lien, 271, 272-273.

Aason, 395.

Ashley, Sir V., I01, I03, I04, I05, I07.

Asportation, of chattels, absolute liability for, 456-468.

### Index

Assault and Battery, 42T-423:

Assignment, power of commissions in bankruptcy to make an, 239; relation back of title to act on bankruptcy, 240; validity of if made before bankruptcy, 242.

Assumpsit, action of familiarizes lawyers with the idea of an enforceable agreement, 1; elements in consideration due to, 2-3; facts needed to establish cause of action in, called consideration, 4, 6-7; express, 8; indebitants, 8; has shaped the English theory of contract, 46; its effect on the law of, 46-47; has shaped law as to invalidity enforcement and breach of contract, 8788; a plaintiff must show performance as a condition of recovery by action of, 72; used to enforce rights of the parties to a bill of exchange, 159-160.

Astbury, J., 395.

Atkinson, see _Anti-Christian Beliefs_, Atkin, L.J., 395, 395, 466.

Attempts to commit crimes, 434.

Attorney, promises to pay creditor's attorney, r16-178, r19-121; an agent for litigation, 222.

Average, see _General Average_; customary payments called by that name, 255.

B

Bacon, his views on usury, 108; 312, 313; 314, 446, 453, 454, 464.

Bagchot, 100, 188, 214.

Balice, liability of at common law, 255; basis of his liability, +35.

Baldus, 126.

Baldwin, C.J., 424.

Bank of England, 135-136, 183, r88.

189, 203, 209; liability of sharcholders in, 205; incorporation of, 211-212, 213; offer to take over the national debt, 2tz; notes of the, r91.

Bank Notres, r90-191; payment by, r91.

Bankers, act as exchangers, r27; used by the merchants to effect a transport of money, r29-130.

Banking, 177-192; origins of, 177-178; comparison of origins of, with origins of bills of exchange, 130; uses made of banks, 178-179; political importance of, 179-180; state control of, 180-181; state banks, r81-182; sixteenth and seventeenth century descriptions of, r82-183; proposals to establish banks in England, 183-184; not definitely organized in Elizabeth's reign, 185; private banking--becomes connected with the goldsmith; r85-186; why no public bank was established till the Revolution, r86-188; establishment of the Bank of England, r88-189; its services to the government, r89; beigninings of law as to, 189-192; effect of on development of joint stock companies in Italy, 208; see _Cheques_, _Bank Notes_, Bankrupt, promises to pay by a, 26, 27, 31; state of--rule ofateable division, 239, 242; of what it consisted, 239-240; after-acquired property of, 239; equitable interests and settled property of, 241, 242; see _Voluntary Conveyances_, _Rebutted Ownership_, _Bankruptcy_, 229-245; Italian development of law of, 299-930; not known in England till the sixteenth century, 229-233; the Council and the unfortunate debtor, 233-234; bad effects of the abolition of its jurisdiction, 245; seventeenth-century legislation as to unfortunate debtors, 234-236; measures against dishonest debtors, 236; these measures are the origin of the bankruptcy law, 236-237; Henry VIII.'s Act, 236-237; Elizabeth's and James I.'s Acts, 237-240; persons who can become bankrupt; 237; acts of, 237-238, 240-241; jurisdiction in, 238; powers and duties of commissioners in, 238-239; assets available for distribution 19, 239-240; effect of on bankrupt's liability, 240; policy of the statutes of, 240; issue of commissions in, 241; cases on the statutes of, 241-242; joint and separate estates of bankrupt partners, 242-243; vendor's lien, 243; stoppage in tranitiu, 243; defects of the statutes of, 243-244; need for the chancellor's interference, 244; unsatisfactory state of the law, 244-245; actions for imputation of, 349, 355; see _Compositions with Crediors_.

Banks, private and public--abroad, r80, r81-182; in England, r85-189.

Barbon, Nicholas, 294.

Barsour, 42.

Barcelona, its code of insurance law, 28T; historical importance of this code, 28T-282; its contents

## Index

### 1.8.1 Bensficium Compretntile

Bensficium Compretntile, as between partners, t95. Bensfic of Clergy, 444. Bensfic to Promisop, not an essential element in consideration, to-ii; confusion caused by regarding it as such, 24. Bensa, 261, 262, 274, 275, 276, 283, 296, 297. Bensfium, too. Bensfley, J., Sir. Berruda Company, The, 209. Bensfic of Conformity, 244. Bills of Debt, i48-i5t; proposal to make them assignable, t7I. Bills of Exchange, \_Contmental origins and development--the contract of cambium, t26-i3t; machinery to give effect to that variety of the contract which concerned the transport of money, t3I. Bovers, t32; this is the probable origin of these bills, t32, t36-i37; other suggestions as Bensfium, Lord, 478. to origins of, t32-t36; relations of the parties to, t37-t40; see _Draver, Accepttor, Payce, Indorsee;_ development of their negotiable character, t40-t45; Bensficial development--the contract of cambium, t26-i3t; machinery to give effect to that variety of the contract which concerned the transport of money, t3I. Bovers, t32-t32; this is the probable origin of these bills, t32, t36-i37; other suggestions as Bensficial, Lord, 478. to origins of, t32-t36; relations of the parties to, t37-t40; see _Draver, Accepttor, Payce, Indorsee;_ development of their negotiable character, t40-t45; Bensficial development--the contract of cambium, t26-i3t; machinery to give effect to that variety of the contract which concerned the transport of money, t3I. Bovers, t32-t32; this is the probable origin of these bills, t32-t32; this is the probable origin of these bills, t32-t32; other suggestions as Bensficial, Lord, 478. to origins of, t32-t36; relations of the parties to, t37-t40; see _Draver, Accepttor, Payce, Indorsee;_ development of their negotiable character, t40-t45; Bensficial development--the contract of cambium, t26-i3t; machinery to give effect to that variety of the contract which concerned the transport of money, t3I. Bovers

## Index

As to usury, I01; the law of the English Church in the Middle Ages, 402.

Caroisin, the, 177.

Capias, ad respondendum, 231; ad satisfaction, 231.

Capital, trading with borrowed, helped by growth of banking, 189; utilization of by means of joint stock companies, 205, 207-208; hindered by the Bubble Act, 221; hazy ideas as to nature of 217; dividends paid out of, 216-217.

Carr, 199.

Carr, 254-261; incidents of, 261-273; see _Bottomy, General Average, Salvage, Maritime Lions_.

Carrers, duties of enforced by actions on the case, 89; liability of at common law, 259, 452-453; in the court of Admiralty, 259; 449, 474, 475.

Case, actions on the, brought by persons to whose use property has been conveyed, 222; how they helped to introduce the idea of negligence, 449-451.

Cattelle Trespass, liability for 451-452, 470-471.

Causa, in continental law, 42-45; writing as a, 45-46.

Cautious, ex causa cambi, 136-137.

Cavat Emfort, 69.

Certainty, needed in a consideration, r-18.

Crssio Bonorum, Roman system of adopted in the Italian cities, 230.

Champagne, the fairs of, 129.

Chmarcy, the court of, effect given by to an agreement, r; elements in consideration due to, 3: meaning attached to consideration by, 4:5; influence of this meaning on common law doctrine, 7-8, r2-13; early case on a bill of exchange in, 152; jurisdiction in insurance cases, 292, 293.

Cartrier Partizes, 254, 255.

Chatters, of trading companies, contents of early, 200-20; questions whether their activities were limited by their, 215, 216; trade in obsolete charters, 215-216.

Crisques, 190-197; payment by, 191.

Crisses In Action, why not assignable in early law, 175, 147, 150; partly caused by fear of maintenance, 393; how the prohibition against assignment was evaded, 177-118; transfers of documents allowed to operate as transfers of, r18-119.

Cris

## Index

### Index

#### 1.1.1.1 Non-uniformity

The \_

## Index

Constitution Debit Alieni, 137. Construction, of defamatory words, 35-359; had effect of reporting cases as to the 359-360. Constructive Reason, see _Treason_. Contarin, 179. Contaract, its essence, I ; need to distinguish enforceable from unenforceable agreements, I-2, see _Consideration_, causes of invalidity of, 49-65, see _Midake, Dures, Illlegality, Impossibility, Fraud, Mirpresentation, Alterations_, effects of invalidity, 65-67, see _Void, Voidable, Unenforceable_ ; enforcement of, 79-76, see _Dependual Sifulations_, _Indebradent Stigulations, Concurrent Condition, Special Contrast_; discharge of, 77-87; see _Breach, Performance, Center, Agreement, Novation_; liability on if made by an agent 233-224, 227-228; implied in law, 98, see _Musalout, Implied Contract_; persuasion to break a, 448. Contractual Relations, interference with, 429, 431, 448. Contracts Trains, The, 104-105. Constructive Neglioence, 459-462; origin of doctrine, 459-460; roughly pieced on to medieval principle of liability, 460-467; effect of this on the law, 461-463; anomalous character of the doctrine, 462; compared with the Admiralty rule, 268-269. Conversion, absolute liability for, 466-468. Convey, ship warranted to depart with a, 292. Co-owners of Ships, their rights inter se, 427-420; powers of the court of Admiralty in relation to, 248. Cornwallle, Ralph, to2. Corporate Ibela, application of to commercial societies, 199, 200, 205, 215-217; application of to those societies stopped by the Bubble Act, 219-227. Corbsmorre, J., 85. Cottinston, Lord, 187. Council, the, its interference in favour of unfortunate debtors, 233-234; in cases of fraudulent bankruptcy, 236; and results of the cessation of this jurisdiction, 244-245; its regulation of insurances, 255-288. Covenant, action of, performance must be proved as a condition of recovery by, 72. Cranworth, Lord, 454, 455, 468, 478. Creightor, promise to pay to the nuncius of a, 15-116, 119-121. Crew, rules as to the legal position of the members of a, 253-254. Crime and Tort, distinction between them, 306. Criminal Conversation, the action for, 430. Criminal Law, influence on, of the Legislature, 307-302, 305; of the Council and Star Chamber, 302; of the common law, 302, 305; of the combination of Star Chamber and common law doctrines, 306; external influences, 306-307. Criminal Offence, actionability of words imputing a, 347-348, 353-354. Crowe, J., 15, SI. Crowe, THOMAS, JO8, Culpa, liability grounded on by the civilians, 258; not by the common law, 259; if effect on rules as to collisions at sea, 266-269. Cunningham, 189. Custom, assumpti for money due by virtue of a, 90.

## Index

- sale, I4; and to enforce quasi-contractual relations, SS8.
- Deceigt, action of, 67, 68, 426.
- Derby, when "' non est factum " can be pleaded, 50; effect of in discharging a contract, 80-87.
- Defamation, 333-378; a crime and a tort, 333; the division between libel and slander, 334; early history, 334-335; development by the common law courts and the Star Chamber, 335-336; _The Criminal Offence_-336-346; against private persons, 336-337; against the government, 337; obscene writings, 337; 407; seditious libels, 337-338; rules to, 338-341; effect of the copy of the Licensing Act, 341; the malicious intent, 341-342; this question important after the abolition of the Star Chamber, 342-343; the position of the jury, 343-345; beginnings of the controversy on this matter, 345; rudimentary state of the law on many points, 346; _The Tort_ --346:378; nature of the action on the case, 346-347; words actionable per se, 347-350; other words, 350-351; slander of title, 351-352; torus analogous thereto, 352; discouragement of the action on the case, 353-355; doctrine of "mitor sensus," 355-356; liability for repetition of a defamatory statement, 357; rules as to the damage recoverable, 357-358; effect on the law, 358-361; origin of the distinction between libel and slander, 361-365; good and bad results on the law of its establishment, 365-367; the innuendo, 368-369; the colloquium, 369; proof that the statement was made of the plaintiff, 370-371; publication, 371; the place of malice, 371-375; justification, 375-376; privilege, 376-377; good and bad points of the law, 378; actions for to question a decision that a man is a bankrupt, 241.
- Defamatory Words, not generally a crime, 337.
- Defamatio, I32, I33.
- Defametry, when needed to pass the property in a ship, 246.
- Defamriage, 260.
- Defamst, C.J., 34, 37, 45, 413.
- Defamst, D., 272.
- Defamst, D., 72.
- 476; history of the doctrine of, 472-479; why the modern doctrine was introduced, 473-474; Holt's decisions, 474-475; influences which created it, 475-477; confusion as to its principle, 477; its real basis, 477-479; limitations on it--the independent contract, 478-480; common employment, 480-442. Employers, contracts in restraint of trade imposed on, 58, 59, 61, 62. Enforement of Contracts, rules as to, 70-76; how far performance is a condition precedent, 71; rules in action of debt, 71-72; in actions of covenant and assumption, 72-73; variation of these rules--independent promises 73; development of artificial rules of construction, 73; unsatisfactorily state of the law, 73-74; mutual pro-misses and concurrent conditions, 74-75; rules applicable to indebitaus and special assumption, 76; action on a quantum mruit, 76. Equity, rules of as to contracts of laminates and drunken persons, 53; rules of as to partners, 217-248; as to liability of a principal for his agcnt's acts, 229. Equity of Redemption, influence of the usual laws, t66. Erle, C.J., 41. Erskine, L.C., 345, 43, 454. Erskine, J., 475. Esnir, M.R., 397. Ex Nudo Pactor, etc., 30, 44.

INDEX

Friendly Society (insurance), the, 294. Fund of Credit, conception of a, how used in seventeenth century, 211-212; exaggerated ideas as to the powers of, 218-219.

Hamburg, bank of, 181; system of fire insurance in, 294.

Hand in Hand Society, the, 294.

Hardowicz, L.C., 28, 409, 413.

Hawkins, 308, 326, 399, 408, 441.

Heath, Sir R., 183.

Herns, his book on pleading, 159, 160.

Horn Commission, the court of, 406-407.

Hobyst, 54.

Hobys, 382.

Hollks, 339.

Hollks, 349.

Hollowy, J., 473.

Holmes, Mr. Justice, 372, 472.

Jettison, 264; development of, 264-265; how limited, 265; what contributes to, 265; rules as to valuation of goods lost, 265; lien on cargo for, 265.

General Ships, 254.

Genoa, the fairs of, 129; loans raised by, 208; the bank of, 208; its Officium Robarie, 275; oldest insurance contract in archives of, 276; centre of insurance business, 278; insurance legislation at, 281.

Grebier, Sir Bathasar, 183.

Germanic Law, duty of keeping faith in, 43, 44; procedure in how different from Roman procedure, 122.

Gildens, influence of on companies and partnerships, 193-195, 200.

Glanvil, toz.

Glanville, J., 428.

Goldsmith, exchange business of, 127; deposit of money with, 172; development of banking by, 178; 185-186; criticized for undertaking this business, 187-188; practice of followed by the Bank of England, 188-189.

Good Consideration, 5, 6; will not support a contract, 12; influence of on doctrine of consideration in relation to contracts, 12-13.

Gordon Riorts, the, 320-321, 331.

Government, what amounts to a libel on the, 340-341.

Governmental Powers, contained in early charters of companies, 201; cease generally to be given, 209-270.

Greek Law, stipulations as to risk in contracts of carriage, 274.

Grose, J., 454.

H

H Habas Corpus, writ of, to question the legality of a commitment by Bankruptcy Commissioners, 241.

Hagenbuck, Christopher, 183.

Hale, 308, 309, 312, 313, 314, 317, 319, 320, 329, 364, 408, 436, 437, 438, 440, 441, 442, 443, 444, 445, 464, 469.

Hales, J., 304.

Hamburg, bank of, 181; system of fire insurance in, 294.

Hand in Hand Society, the, 294.

Harbovick, L.C., 28, 409, 413.

Hawkins, 308, 326, 399, 408, 441.

Hearth, Sir R., 183.

Herns, his book on pleading, 159, 160.

Horn Commission, the court of, 406-407.

Hobart, C.J., 54.

Hobys, 382.

Holless, 339.

Hollowy, J., 473.

Holmes, Mr. Justice, 372, 472.

Holford, J., 374.

Holt, C.J., his opposition to the extension of indebitatus assumpist to remedy quasi-contracts, 90-97; his views as to the non-negotiability of promissory notes, 172-176; his decisions on employers' liability, 229, 252-253, 474-75; 477 ; 39, 93, 94, 95, 96, 145, 167, 166, 167, 168, 169, 191, 257, 299, 303, 316, 326, 337, 339, 341, 344, 354, 390, 393, 400, 244, 426, 435, 452, 453, 469, 470, 471.

Hoodic, 303-304; when justifiable, 304, 330-331.

Houghton, John, 214.

Huson, 3

**Index**

bonds, $6\_{3}$; legal impossibility, $6\_{3}$; when a promise is absolute, $6\_{3}$; when conditional on possibility, $6\_{4}$; created by one of the parties, $78$.

Indemitrants Assumpsit, when it lay, $75$%; use of enforce quasi-contracts, $88$%-89, $89$%-6; $8$%, $16$%, $17$.

Indemitry, marine insurance a contract of, $278$%, $279$%, $290$%; different from life and accident insurance, $295$.

Indemitendar Contractor, employer not generally liable for torts, $479$%-48%.

Indemitendar Promiss, $73$%; failure to perform, $77$.

Indobserest, position of inter se, $143$.

163-164; rights of,

## Index

Italian States, money borrowed by, to6; legislation as to banking in, r50-ISI.

J Jeffrey, L.C., 341.

J Enks, 116.

J Lisselt, 55.

- \[199\]Lorenzen, Professor, 47. Lost Bill, liability on a, 156. Luccium cessans, 103. Lunatres, contractual capacity of, 53. Lushington, Sir Godfrey, 394. Luther, his views on usury, rog. Lyons, the lairs of, 129. Manslaughter, 303; the mens rea in, 436-437. Macauley, Lord, 214. Madox, 147. Mantrenace, 397-402; why it assumed its modern form, 395; its criminal aspect tends to disappear, 395-399; essential features of, 399; how far the rules of the tort and the crime are the same, 399-400; need to prove damage, 400-401; effect of the success of the maintained litigation, 401-402; effect on development of law of, the abolition of the Star Chamber, 361-364. Maitland, 223. Malice, how far essential in libel, 345, 377-375; legal and actual, 374 Malice's Arbortentooth, 435-436. Malicious Proscection, 385-391; the medieval remedies, 385; comparison of the statutory writ for with the action on the case, 385-386; compisencies to inlet for treason, 386-387; for misdemeanver, 387; need for acquital, 388-389; elimination of the element of conspiracy, 389-390; restatement of the law by Holt, 390-391; relation to false imprisonment, 388. Malicious Statements, action for, 352. Malynes, his views as to the usury laws, 106, III; his description of a public bank, 182-183; opposes the establishment of such a bank in England, 187; information as to brokers, 224; as to factors, 226; account of Italian bankruptcy laws, 230; of the commissioniers in bankruptcy, 238; of bills of lading, 256; as to freight on goods saved from wreck, 260; as to insurances against personal risks, 297-298; 127, 148; 49, 150, 152, 153, 154, 155, 167, 251, 152, 254, 255, 261, 288, 293. Manning, Sergeant, 429. Manorial Courts, jurisdiction of in cases of defamation, 335. Mansfield, Lord, his views on consideration, 25, 26-31; their rejection, 3538; effect of this, 34, 38-42, 46-47; his views were an intelligent anticipation of the future, 47-8; his contribution to the law of quasi-contract, 97; 168, 171, 293, 320, 344; 414, 445, 453. Mansfield, C.J., 33, 36, 365, 366. Manslaughter, 303; the mens rea in, 436-437. MansWOOD, C.B., 7. MansWOOD, C.B., 7. Mansch, 355. Maritime Law, 245-273; see _Ships, Master, Creu, Carriage, Bills of Ladiving, Bottomary, General Aeroreg, Collision, Salvage, Maritime Lies_, 270-273; definition of, 270; how they arise, 270-271; compared with common law liens, 271; origins, 271-273. Marius, his information as to bills of exchange, 155-157. Markry, his criticisms of the doctrine of consideration, 46. Marlow, 320, 434. Marquardus, his views on usury, III; on banking, 182; 142, 187. Married Women, their contractual capacity, 51. Marsden, 268, 272. Martin, B., 31. Master, liability of for servant's acts, see _Employers' Liability_. Master, The, of a ship, powers of, 248-249; comparison with the common law rules of agency, 249-250; liability to passengers and merchants for the torts of the crew, 250-251; liability of owner for his torts, 251-252; effect of these doctrines on the common law, 252-253; relation to the crew, 253-254. Master and Servant, see _Princifial and Agent_. Master's Mate, The, 248. McCardie, J., 395, 450. Melanchon, views as to usury, rog. Mens rea, the basis of criminal liability, 433-435; its nature in different crimes, 435-437; see _Infancy, Insanity, Drunknessness_. Mercantile Law, Lord Mansfield's use of the doctrines of, 29-30. Merchant Adventurters, The, 199. Merchants, their legal relation to shipowners, 253-260; their regulation of insurances, 255, 256-261; ther regulations of insurances, 255, 256-257. Mer

## Index

Misrepresentation, originally no remedy for non-fraudulent, 67, 68; law developed through the rules as to implied warranties, 69-70, 78.

Mississililta, 116.

Mistake, remedy for money paid by, 94.

Mitiot Sensus, The, 335, 355-356, 366.

Molloy, 226.

Monarchy, a public bank said to be incompatible with, 186-r87,

Monery Changes, The, the earliest bankers, 177, 178.

Monopoly, illegality of, 60; contracts creating a, 61.

Montes Piteratiis, 106, 180.

Monal Opligation, confusion with consideration, 3; T; Mansfield's use of this idea, 26-29; prevalence of his views, 30-33; their rejection, 36-38; effects of this, 34, 45.

Motrie, confused with consideration, 32-33; distinguished from consideration, 38.

Mwreder, 303-304; the mens rea in, 435-436.

## Index

- \[1\] **Rogrators, 57.**
- \[2\] **Rogrators, 57.**
- \[3\] **Rogolatred Companies, see** _Combanies,_ \*\*Rogolatred Companies,\_ \*\*Rogolatcontributory negligence in, 459; influence of on- doctrine of employers' liability, 475-476. Roman-Dutch Law, causa in, 43, 44, 45. Romlly, Lord, 417. Rortreydm, bank of, rsr, Rout, definition of a, 324. Royal African Company, the, 209. Russia Company, the, 209, 210, 33. S St. Giorof, bank of, 18r. St. Germain, 5, 14. Saler, contract of enforced by action of debt, 14; insurance contracts disguised as, a, 275-276, 277; effects of this, 277-278. Sale of Goods, warranties in connection with, 68-69; 70; growth of idea of fraud in connection with, 68-69; no need to show performance to recover on a contract for, 72. Salman, the, 222. Salvag, 269-270; actions for, 270. Salvors, rights of in the court of Adaritsky, 269-270; at common law, 270. Scaccia, 136, 142, 143, 19S. Scandalum magnatum, 335, 340, 376. Schutz, J., 389. Scinner Rule, the, 45I, 457, 455, 469. Scotch Law, English law of contract might have been assimilated to if Lord Mansfield's views had prevailed, 34; the firm a legal person in, 198. Scott, Dr., 193, 211, 213, 221. Scripta obligation, 170. Scrusers, connection of with banking business, 185. Scroggs, C.J., 12, 340, 343. Scrutton, L.J., 395. Sael, contract under, effect of in discharging a contract, 80-8I; bills of exchange said to be in the nature of, 168, 175. Sedition, relation of to religious nen-conformity, 407, 408-409, 419-420. Seditious Works, 339-340. Seditious Writings, 333-34I; the editions intent, 341-342; functions of the jury in relation to, 342-345. Seduction, the remedy for, 428-429. Sedborn, L.C., 40. Self Defense, 304. Sedivn, 32. Separate Estate of a firm, administration of in bankruptcy, 242-243. Servants, threatened violence to, 453; remedy for abduction, 429. Severrance of legal from illegal stipulations in a contract, 53-54. Shareholders, liability to creditors, 203-204; to the company, 204; limitation of their liability, 204-205. Sharrs, transferable, 203, 207, 208, 220, 221; dealings in, 214; misgeeds of dealers in, 214, Shaw, C.J., 478, 48I. Sherifts, liability of for acts of their subordinates, 474, 475, 477. Ship, presumption of the loss of a, 280, 29I. Ship's Boy, the, 248. Ship's Register, 255. Shipowners, liability to merchants, 258; how far insurers, 258-259; right to freight, 259-260; right to have a cargo provided, 260; right to withhold delivery till payment of freight, 260. Ships, modes of acquisition, 246; declaration of title, 246; 1iens on, 246; 247; co-ownership, 247; disputes between co-owners, 247-248; arrest of, 247; process of arrest and maritime items, 272-273, see _Maritime Liens_. Showerri, The, 248. Showerri, Sir Bartholomew, 9I, 257. Sicato, when a proper mode of pleading, 65-66. Simple Contract, operation of in discharging a contract, 81-85; no effect on a contract under seal, 8I; modification of this rule, 82; executed and executory contracts, 82-83; see _Acord and Satisfaction_. Skynner, C.B., 36. Slander, see _De/amation_: origin of, distinction from libel, 361-365. Slander or Title, 351-352. Smith, Adam, 180. Smiths, 449, 45I. Socitras, the, how it differed from Commentions, 197; relation of the partners, 197-198; its collective name, 198; in some countries a legal person, 198; influence on development of English law, 198-199; like a corporation, 207; developed by state needs, 207. Societe en Commandite, 196. Somers Islands Company, the, 209. South Sea Company, the, 210; proposal to take over the national debt, 212-213, 218-219; its failure, 216; the ensuing panic, 219. Special Assumpsit, when it lay, 76. Stakeholder, remedy of winner to recover from a, 94. Star Chamber,

## Index

393; its influence on maintenance, 395; its jurisdiction as censor morum, 407.

Starkie, 415.

Statute, operation of a, which makes a contract illegal, 54.

Statute Merchant, arrest of debtors by, 33I.

Steremsman, the, 24S.

Stephen, J., jio, 31S, 320, 322, 337, 340, 341, 344, 410, 415, 416, 418, 441, 442, 444, 445.

Stock Brokers, 214.

Stock Exchange, growth of a, 214.

Stoprago in Transitu, 243, 257.

Stowell, Lord, 266.

Stracda, 279, 290.

Stret, Mr., 5, 70, 84, 161, 165, 423, 453.

Stubroation, how used by the creditors of a company, 204.

Sue and Labour Clause, 281, 290.

Sucidle, 304.

Stunker, Lord, 39, 419, 461.

Steprentitions Uses, 412-413, 417-418.

Storgbons, 449.

Sturvorship, excluded as between partners, 217.

Sword Blade Company, the, 215-216.

Symbolic Delivery, 11S-I19.

Treby, C.J., 86, 91.

T

Tasking, when remediable by indebitatus 465-466; limits of its application, 466-assumpist, 95-96.

Taverners, 449.

Tawnis, M., III.

Tennis, unicained violence to 443.

Tendr, 79-So.

Tendrden, Lord, 37, see _Abbott_.

Ternes be la Ley, 6.

Trorp, C.J., 433.

Time Barabans, 214.

Time Policies, 280.

Tindal, C.J., 19.

Tolerration Act, the, 405, 410, 411.

Tort, encroachments on by criminal law, 302; developments in law of, 305; effect on of combination of Star Chamber and common law doctrines, 306; external influences, 306; growth of the substantive law of, 432; how dis untinguished from crime, 306.

Trade, contracts in restraint of, 56-62; the medieval law, 56-57; law of the sixteenth century, 57-58; of the seventeenth century, 58-59; change of ideas at the Revolution, 59; restatement of the law by Parker, C.J., 60-62; the modern cases, 62.

Trade, how promoted by banking, 17S-179; organization of the object of early

## Index

### Index

The index $\\alpha\\
