Chapter VIII: Part 8

=Patent.=--In the United States the thing patentable is a new and useful art, machine, manufacture or composition of matter, or new and useful improvement thereof, or new, original and ornamental design for an article of manufacture. An idea, principle or law of nature is not patentable, but only the means for utilizing the idea or principle. Many a great discovery has slipped away from the inventor or discoverer, because he sought to hold the discovery or invention of the principle as his own, instead of limiting his claim to the means or methods of putting his principle into use. Morse's invention of telegraphy is one of them. An art or process is patentable as well as machinery, though the inventor may not know the abstract principles involved in his art. But he must know and describe the steps by which the result is accomplished. A composition of matter is a mechanical mixture or chemical combination of two or more substances; and an improvement is an addition to, or change in, a known art, machine, manufacture or composition of matter, which produces a useful result and is patentable if it amounts to invention. Lastly "a patentable design may consist of a new and ornamental shape given to an article of manufacture, or of an ornamentation to be placed upon an article of old shape." It is said that the law relating to this subject intends that the patentability of a design shall be determined by its appeal to the eyes of the ordinary man, and not to the eyes of a jury of artists. Design patents are granted for different periods, three years and a half, seven years and fourteen years, as the applicant may elect.

The subject matter of a patent must be new and useful. It must be new not only to the patentee, but to all the people in this country, and at the time he filed his invention. The federal law, however, secures a patentee who had no knowledge that his invention had been discovered abroad and which had not been patented there, nor described in a printed publication. Before the enactment of this law a patent was not granted without showing that the applicant was the original inventor with relation to every part of the world.

Much has been said concerning the novelty of an invention. This may be in the use of an old means in a new way; or a change of shape or form to produce new functions and results, but the changes must amount to invention, which is more than mere novelty.

A foreign patent in order to invalidate an American patent must antedate the invention patented. A foreign patent exists as a patent only as of the date when the invention was published. In England an invention is not patented within the meaning of the act of Congress until the enrollment of the complete specification.

What is meant by a prior publication? It is a printed book, newspaper or document of a public nature disclosing the invention intended and actually employed for the purpose of informing the public. Publication in a book of general circulation is sufficient; business catalogues or circulars are not such publications as are meant in the law.

To defeat a patent on the ground of want of novelty the proof of prior use or knowledge must be convincing, sufficient to establish the fact beyond a reasonable doubt. The recollection of one witness concerning the peculiar construction of a piece of machinery, especially if the structure is one of complex character, is not enough evidence to defeat a patent. Much less evidence, however, might be sufficient to prove that a very simple invention had been anticipated.

To justify the granting of a patent it must be useful. If the invention be frivolous or pernicious, the inventor cannot secure for it legal protection. The use of the invention must not be contrary to public health or morals. It is not needful that the invention should be the best of its kind, or that it should accomplish all that the inventor claims for it. Furthermore, its utility depends on the state of the art at the time of making the claim or issuing the patent; its subsequent inutility does not invalidate the patent. Extensive use is evidence of utility. The presumption of law favors a patent, and the burden of proof is on the one attacking it to show that it is not useful. The infringement of an invention is in effect an admission of utility, because use implies utility.

A patent also calls for the exercise of inventive power. Though invention must be seen in every patent, it is difficult to define. Says a former commissioner of patents, Justice Duell: "It is a matter resting in judgment and therefore no fixed rule for its determination is possible." Some principles, however, assist in defining the term. "Thus, it is declared that an act of invention is primarily mental and involves the conception or mental construction of a means not previously known for accomplishing a useful result. It is not the mere adaptation of old means by common reasoning, but is the construction of new means through an exercise of the creative faculties of the mind." Between invention and discovery the patent laws draw no distinction. Again, it has been often said that the design of the patent laws is to reward those who make a substantial invention or discovery, which is an additional step in the useful arts. The law never intended to grant a monopoly for every trifling device which would naturally occur to a skilled mechanic in the ordinary progress of manufacture.

An article of manufacture is not patentable because means have been devised to make it more perfectly than before; it must be new in itself and not merely in its workmanship. A machine-made article therefore is not patentable simply because it is thus made, and no longer by hand.

The substitution of an art, manufacture, or composition of matter of one element or device for another which does the same thing in the same way and accomplishes a similar result is not invention. Even if the substituted part performs the function better, there is no patentable invention unless some new function or result is secured. Changes therefore of the relative location of parts without changing the functions performed by them are not an invention, nor is the omission of a part with a corresponding omission of function.

A patent can issue only to the inventor, or if he is dead to his executor or administrator. If there be two original inventors the one who first made it or brought it to this country is entitled to a patent. A patent granted on the application of a non-inventor is void. By first inventor is meant the one who first had a mental conception of the invention provided he exercised diligence in perfecting it. If there be a rival claimant the party who first reduced to practice the invention was, until the contrary fact is shown, the first inventor. One who merely utilizes the ideas of others is not an original inventor and is not entitled to a patent. In the United States any person, regardless of residence, citizenship or age may obtain a patent.

An invention is reduced to practice when it is so far perfected that it may be put into practical and successful use. The machine may not be perfectly constructed, but it embodies all the essential elements of the invention. Demonstration of its success by actual use is usually necessary, but not always. The reduction to practice must be by the applicant for a patent, or by his agent; to do this by a third party will not suffice. The person who first conceived the invention, but was later than his rival in reducing it to practice, is not regarded as the first inventor unless he exercised due diligence to perfect his invention after the time that his rival entered the field against him.

Two or more parties may contribute in developing an idea and producing an invention, which is truly the result of their joint mental efforts, and not the separate invention of either. In such case both must apply for the patent, which is granted to them jointly. But if a patent is thus issued to two and only one of them is the inventor, the patent is invalid. Nor can one of two joint inventors make application and secure the patent on assignment from the other; both must join.

The patent must issue on the application of and in the name of the real inventor even though he was employed to make it for the benefit of another. Notwithstanding, the employer is the owner of the patent and may compel the patentee to transfer it to him. Of course their respective rights may be changed by agreement. If no agreement exists, a company that employs a skilled workman to make improvements on its machinery is not entitled to the patents granted to the workman. Says Justice Duell: "An employee, performing all the duties assigned to him in his department of service, may exercise his inventive faculties in any direction he chooses with the assurance that whatever invention he may thus conceive and perfect is his individual property. The company, however, has an implied license to make, use and sell the invention."

Where a party employs another to assist him in perfecting an invention the presumption is that the employer is the real inventor of the thing produced by their joint effort. On the other hand, where a person is employed to exercise his inventive skill, because he is known to be the possessor of it, Edison for example, the presumption is in favor of the employee. Government employees may secure patents on inventions made by them during their employment, after their relationship has ceased. The government may have an implied license to use the invention without any title thereto.

Patents may be issued and reissued to assignees on the application of inventors. On the death of an inventor before a patent has been issued to him, his executor or administrator may apply therefor, who takes the patent in trust for the heirs. A foreign executor or administrator may make a similar application. He must, however, present a proper certificate of his authority to act. Likewise, a legally appointed guardian or conservator of an insane inventor may apply for and obtain a patent in trust for him.

The inventor must apply to the commissioner of patents for letters patent which secure to him his invention. The application comprises a petition, specification, claims, oath, drawings if the nature of the invention may be thus shown, and a model, when this is required by the patent office. A fee of fifteen dollars also must be sent with the papers. The application must be signed by the inventor and two witnesses.

The specification is the written description of the invention and of the manner and process of making, constructing, compounding, and using the invention; whatever it may be. He must describe not merely the principle of the invention, but the mode of applying it in such a clear, intelligible manner that those who are "skilled in the art" can, without other aid, use the invention. Nothing should be left to experiment. The phrase "skilled in the art" means persons of ordinary skill. Whether a description is clear, exact and sufficient is a question for the jury whenever it is a matter of legal contention.

In describing an improvement the same rule is applied. The description should show clearly the nature of it. The description should distinguish between the old and the new. "A description in a patent for an improvement is sufficient if a practical mechanic acquainted with the construction of the old machine in which the improvement is made, can, with the aid of the patent and diagram, adopt the improvement." If an inventor intentionally conceals facts or misleads the public by an erroneous description, his patent is void.

Concerning the claim or claims with which the inventor concludes his specification many questions have arisen. First, the claim must be clearly stated so that the public may know what it is. The claim should not be too broad. Several claims may be made, but they should not be varying phraseology for the same thing. They should state the physical structure or elements of mechanism by which the end or result is produced.

The inventor must make oath that he believes himself to be the original and first inventor, that he does not believe that the thing was ever before known or used, and as to his citizenship. If dead or insane, the oath must be made by his executor, administrator, or other representative. After the application is granted another fee of twenty dollars must be paid.

The commissioner of patents must make an examination for the purpose of deciding whether a patent may be granted or allowed. This examination is made by an examiner, whose decision, however, is not conclusive and may be set aside by the commissioner. The patent office is not confined to technical evidence in rejecting applications, but may base its action on anything disclosing the facts relating to the matter.

When objection is made to the form of the application, an amendment may be made by the applicant or his attorney to correct the error; and this may be done at any time prior to the entry by the first examiner of a final order of rejection, and within one year from the date of the preceding action by the patent office.

When two parties apply for a patent for substantially the same thing an interference is declared and the respective parties must present proofs in support of their claims. The question between them is priority of invention. The proceeding then is much like an equity trial with perhaps a wider latitude in admitting evidence bearing on the inquiry.

The applicant, if dissatisfied with the rejection of his claim by the first examiner, or with the decision in an interference case, can appeal to the board of the examiners-in-chief, and if dissatisfied with their decision he may appeal to the commissioner in person, and if still dissatisfied he can appeal to the Court of Appeals of the District of Columbia. All appeals must be taken from the patent office within a year, or a shorter period, if one has been fixed in a decision.

The decision of the commissioner of patents in granting a patent is not conclusive that the inventor is the first and original inventor, but only prima facie, that is, in the absence of other evidence to the contrary. Consequently, the question of patentability in every case may be reexamined in the courts. In the early days of administering the patent law an inventor often applied to a court for an injunction to prevent an infringer from continuing his work. The court, assuming that the patent had been properly granted, did not hesitate, on adequate proof of the infringement to grant the injunction. The courts were not slow in finding out that patents were sometimes granted that ought not to have been, and so the practice was changed and patentees were required to establish their right to a patent in a court of law before a court would enjoin an infringer, except in very clear cases. These hearings in the courts to decide the claims of patentees, are often prolonged, running through years to collect testimony, and are appealed from one court to another finally reaching the supreme federal tribunal. After a patent is thus judicially established injunctions are readily granted against all infringers.

=Payment.=--In making payment the parties to an agreement always have in mind cash, unless they otherwise agree. Not every kind of money can be used, nor only in limited amounts. Thus, if one owed another a thousand dollars he could not deliver to him, unless he were willing to accept them, one thousand silver dollar pieces, but only ten of them. Nor can a debtor compel his creditor to receive one cent and five cent pieces to a greater amount than twenty-five cents. National bank notes may be paid or tendered to the government, and by one bank to another, yet they may be refused by an individual in payment of his debt. It is important, when one owes another and there is a dispute over the amount, that the debtor should tender or offer to pay his creditor the proper kind of money, because should he offer him some other kind, national bank notes for example instead of United States notes, or those issued by the federal reserve bank, and he declined to take them and should afterwards sue his debtor for the amount, the latter's offer to pay in national bank notes would be regarded as no payment, or even offer of payment.

A note or check given for a bill of goods is not payment. In everyday affairs a check is thus given and received, in fact it is only a payment conditioned on payment of the check. Consequently if it is not paid, the creditor can sue to recover on the check, or for the original goods as he might elect. In most cases he would ignore the check and sue for the original bill. Suppose some one had endorsed the maker's check, then the creditor would probably sue on that in order to hold both parties.

Does a debtor who turns over a note to his creditor in payment, thereby cancel the debt? If he does not, of course the creditor can still sue the debtor; but if he turned the note over in actual payment, then his right to sue his debtor is gone. What was the intention of the two parties? This is a question of fact to be ascertained like any other.

How shall the money be applied of one who owes several debts to the same person and makes a general payment? The debtor can make the application, if he does not, the creditor can do so; if neither does this, then the law applies it, first to the payment of interest that may be due on any of the debts, and the balance left, should there be any, to the payment of the principal. Of several debts the law applies it to the oldest debt. Again, if there is a surety for any of the debts, he may insist on the application of the money in order to be relieved.

If a depositor in a bank has made a note payable there this is regarded very much like a check, it is a direction to the bank to pay it, especially by the Negotiable Instruments law. Unless the maker of a note is insolvent, a bank can never pay the unmatured note of a depositor. Nor can a bank apply a deposit, which is known to be trust money, or belonging to another person than the depositor to the payment of his note. Generally a bank declines to pay a note that is overdue though there is no law, except in a few states, against paying it should the bank decide to do so. In all cases a depositor may make any application of his deposit he desires, for it is his own and the bank cannot divert it in any way against his direction.

A receipt taken in payment of a debt is not conclusive evidence of payment and may be contradicted by other evidence, though it is regarded on its face as payment. When received, a receipt should be kept for at least six years, because it is such strong evidence of payment. After that period the statutes of limitation in most states have the effect of canceling a debt, on the theory or presumption that it has been paid. If the debtor afterward promises to pay, his new promise is valid though there is no consideration therefor, and he is legally required to pay the debt.

Should a receipt also contain any other statement or contract beside the payment of money, this would have the same effect as any other contract between the parties, and would be equally binding on them.

The effect of a seal after the receiptor's name may be explained in this connection. A sued B and C for a debt. Before trial he gave C a receipt stating that if he did not recover from B he would nevertheless not hold C liable. Having failed in his suit against B, he sought to hold C notwithstanding his receipt releasing him. And he succeeded for the reason that his release was given without consideration and therefore was worthless. Had A added after his name a seal this would have imported or implied a consideration and the receipt would have been an effective release.

=Prescriptive rights.=--A person may gain rights in the land of another by acting in such a way as to indicate that he clearly makes a claim to them. Thus, if a man goes over the land of another in the same direction to his own land for a period of fifteen years or longer, the period differing in the several states, he acquires the right to continue, in other words he acquires a permanent right of way by such action. As such a right is contrary to the interest of another, it cannot be gained against a person who is incapable of preventing the acquisition of such a right if he pleases. Such a right, therefore, cannot be gained against a minor, nor an insane person, nor any one who is incapable of defending his possessions.

Whether the right has been fully acquired is not always easily determined. Suppose one claims a right of way over another's land, and the right is disputed. How often has he traveled that way? Has the other person known of his going and said nothing? Again, suppose a man sells another a piece of his farm away from a road, the law presumes that he intended to grant or permit the buyer to have ingress and egress to his land, otherwise he would not have purchased. This is called a way of necessity. Can the purchaser choose any outlet he pleases? The law says he must exercise reasonable discretion in making his selection.

When a way has been acquired by such use, the law is strict in confining the gainer in the use of it. Thus A buys a piece of land of another for the purpose of erecting a house thereon. The use of the way thereto must be confined to A and his family, friends and those who come to see him on business. Suppose A should decide to divide it into building lots, which would require a greatly increased use of the way. This could not be done without a new agreement with the seller. Again, a tenant cannot by any use of the land acquire a right therein that will continue beyond his lease. If he had a long lease, say thirty years, and could gain a prescriptive right by an adverse use of fifteen or twenty years, he would, if gaining any prescriptive rights, be obliged to give them up at the end of his tenancy. In claiming a right of way the use need not be exclusive. Other persons may also use the way with the same claim of right.

The owner of land has no natural right to light or air and cannot complain that either has been cut off by the erection of buildings on adjoining land. He may, however, acquire, by grant or some other way, a right to have light and air enter a particular window, or other place, without interruption by the owner of adjacent land. Nor can he acquire a right to light and air across another's land for his own house by simply erecting it on the edge of his own land while the adjoining land is unoccupied. To erect windows on that side is not an adverse use of the land adjoining. But a person may gain a right to light and air by presumption, and if one has acquired the right to maintain a window in a specified place he loses his right by closing it up and opening another of a different size in another place. And the same thing happens to one who tears down his house and builds a new one with windows of the same size and in the same places as in the old one. A person cannot maintain an action against another for cutting off his view unless the right has been expressly acquired.

The general rule with respect to the use of water is, any person through whose land flows a stream may use it in a reasonable manner. What is such a use has occasioned many a legal dispute, especially among mill owners. Each one of them located on a stream may use the water, but can they hold it back for any length of time? As a general rule this can be done for a short time in order to get the use of the power, if they could not, the water could run to waste and no one would derive any benefit. Again, can any diversion be made of it? Any use, almost, is a diversion. If one used water even to supply his cattle, it would be a diversion, yet such a use ordinarily is lawful. Suppose one had a very large herd, then the use might be excessive especially in view of the needs of other users on the stream. A still more important question has arisen of late concerning the fouling of water. Has a factory the right of putting its dyestuffs into the water, impairing its quality and rendering it unfit for use by all below? This cannot be legally done. Can a stream be used as a sewer? Naturally all the water in a valley flows downward and at last reaches a stream running through it. As population increases the use of streams becomes greater, and questions concerning their use more difficult.

Suppose a land owner on the hillside wishes to use all the surplus water, can he gather it and thus prevent its flowing to the land below? He can. Can he build ditches or other obstructions whereby he can collect the water and pass it to the land below in other than the natural way? He cannot. On the other hand, the lower proprietor can, if he pleases, make an embankment that will prevent the water from coming upon his land. This, though, is not the law everywhere.

The owners of a well may prevent its overflow and thereby cut off water that formerly ran into a stream. But the owner of a spring that flows into the land of another cannot change its course, nor exhaust the water, nor pollute it to the injury of another. Nor can surface water be changed into a water course by impounding it. On the other hand this rule does not apply to water or springs beneath the surface. If in digging a well the source of supply to another is cut off, it is a loss for which there is no redress, unless the well has been dug maliciously. But where percolating water abounds and is obtained by artesian wells a land owner has no right to sink wells on his land and draw off the water supply of his neighbor. The right to cut ice is a natural one, and the owner of a lake or stream may cut a reasonable quantity, but not enough to diminish the water appreciably to the lower proprietor.

While a person has the natural right also to the lateral support of his land, yet he cannot use it to the injury of another. This is a legal maxim. If, therefore, he should excavate to the edge of his land and his neighbor's building should in consequence fall down, would he be without redress? The rule is, the excavation must be made in a reasonable manner. This is a question of fact in every controversy of the kind. The owner of land adjoining a highway has no right to the lateral support of the soil of the street. Therefore, if the grade of a street were lowered by proper authority and one's house located by the side of it should fall, he would have no redress against the city or other public body.

=Quasi Contracts.=--A quasi contract is a legal obligation arising without the assent of one from the receipt of a benefit which, if retained, would be unjust. The law therefore compels him to make restitution. He is required to do this, not because he has promised to make restitution, but because he has received a benefit which he cannot justly retain.

If one at the time of conferring a benefit on another confers it as a gift, it cannot afterward be claimed that the gift was conferred relying on a supposed contract. Consequently, though the donor's intention may be subsequently altered, no obligation to make restitution will arise. Nor does the failure of the donee to reciprocate the donor's generosity or indirectly reward him, create any right or claim on the donor's part to a return from the donee.

Where one, in the preservation of his own property or the promotion of his own interests, bestows some incidental advantage to another, there is no legal obligation to pay for the value of it. Thus the owner of the lower part of a house is not liable for the advantage resulting to him from the repair of the roof by the owner of the upper part and roof. Nor is one who has thickened and strengthened that part of an ancient party wall which is on his own land, in order to sustain the building he is erecting, entitled to recover from the adjoining owner who used the wall. Nor can anything be recovered from the owner of a vessel by the underwriters who had her docked for repairs though by such docking the owner gained an important benefit. Nor can one who in pumping out his quarry frees another quarry from water recover anything for the service. Nor can one who is benefited by experiments made by another to test the value of patented inventions, in which both are interested, be legally required to pay for the benefit he has received.

As no expectation of payment does presumptively arise when services are rendered by one member of a family to another member, one who claims payment for them must prove that they were not rendered as a gratuity, but on the legal supposition that he had a right to compensation.

One who knows or who has reason to believe that compensation is expected for goods or services tendered to him ought not to accept them unless he intends to pay for them. If he does his act of acceptance will be regarded as a promise of payment, and can be enforced. But if one accepts goods or services without knowledge or reason to believe that compensation will be expected, what then? Suppose A sends a barrel of apples to B supposing, from their previous course of dealing, that B will return them if he does not want them? B should either return them or pay. Suppose B is misinformed and learns that A is giving a barrel of apples to each of his customers? Then he would be justified in keeping them until he learned the truth.

If, in making a contract it is taken for granted by both parties that a certain fact exists, which, if not existing, would make the contract impossible of execution, the contract is void. Thus, in contracts for the sale of specific personal property, its existence at the time of the sale is generally assumed. If the property has perished or been destroyed, the contract is void. The same rule has been applied to the sale of non-existent reality, of the transfer of void or spurious securities, of the assignment of a void lease. In all these cases the money paid in misreliance on the void contract is recoverable.

Premiums paid on a policy of marine insurance by one who in reality had no goods on board, or for a voyage that was never begun, may be recovered. The existence of a risk is assumed by both parties, in fact there is no risk, consequently there was nothing to which the contract of insurance related.

"A promise," says Woodward, "which is so general or indefinite that it does not enable the courts to determine the nature and extent of the obligation assumed must be regarded as no promise at all. Such has been the fate of a promise to pay good wages; a promise to convey a hundred acres of land, the land not being described; a promise to divide profits, no rate of division being indicated. Instances might be multiplied. A benefit conferred, in the honest, though mistaken, belief that such a promise is binding ought in justice to be restored. Restitution is accordingly enforced."

The law requires some kinds of contracts to be executed in a particular manner. Thus, by statute, many municipalities can make contracts, or those of a particular kind, only on sealed bids or proposals and after proper advertising for bids, etc. If these things are not done, the contract made in disregard of them is invalid. The courts of this country have got into deep confusion in applying this rule to private corporations. Suppose a corporation makes a loan without proper authority and receives the money, can the lender recover it? The corporation had no right to borrow, of this the lender knew as well as the borrower. Both parties are in the wrong. The highest court in this country has been more consistent than many of the state courts, and holds that a contract it cannot make for lack of legal power is not made and cannot be ratified. "No performance on either side can give the unlawful contract any validity, or be the foundation of any right of action upon it." Nevertheless though a contract is unlawful and void because the corporation was unable to make it, a court strives to do justice between the parties by permitting property or money, parted with on faith of the unlawful contract, to be recovered back, or compensation to be made therefor.

The lack of another legal requirement in making contracts gives rise to serious consequences. We have learned that the Statute of Frauds requires for the validity of many contracts that a memorandum of them be made in writing and signed by one or both contracting parties. By English law the statute provides a rule of evidence, that a writing must be shown as proof of a contract before the courts will consider it as having been made; by some of the American courts a contract that does not meet the requirements of the statute is held to be void; by other courts they declare that though the contract is not void it cannot be enforced.

While the Statute of Frauds in some states is regarded as completely nullifying contracts not conforming to its requirements, they are not anywhere held to be illegal, that is, are not made in violation of law. "There appears," says Woodward, "to be no reason of policy, therefore, for denying to a party thereto in a proper case, the aid of the court in obtaining quasi contractual relief, or the right to establish the justice of his quasi contractual demand by proving the terms of the unenforceable agreement. True, the evidence of the agreement in such a case, must be oral; but since the evidence is for the purpose of proving, not a contract as such, but a transaction resulting in an unjust benefit to the defendant, its introduction would seem not to contravene the statute."

A purchaser of land under an oral contract, who is given possession and subsequently fails to pay, is liable for the use of the land to him while he has occupied it. Though the act of the seller in giving the purchaser possession without conveying the title may not be regarded as a part performance of the contract of sale, yet the benefit resulting to the purchaser creates an obligation to make restitution which the courts will enforce. The improvement of land by the purchaser under an oral contract is an act which enables him to enforce the contract in equity. Improvements made by a lessee under an oral lease within the statute are governed by the same rules as those of improvements made by a purchaser.

If no benefit has been derived from the contract, nothing can be recovered. Thus, a son worked for his father on his father's farm under an unenforceable contract with his uncle. The latter was under no quasi contractual obligation to pay the value of such service, since he had derived no benefit from them. Likewise one who, relying on an unenforceable contract, constructed a wood-chopping machine that was not accepted could not recover for the value of his labor and materials.

Again, where one party by his own act or default has prevented the other party from fully performing his contract, the party thus preventing performance cannot take advantage of his own act or default, and screen himself from payment for what has been done under the contract. Thus, if one party agrees with another to work on a house the law implies that the employee owns the building in which the work is to be done. This is a part of the contract whether the house is clearly specified or not. Therefore, an employer who does not own the house, or parts with it before the work is completed, is liable to the other party.

The destruction of a thing in the course of alteration or repair without the fault of the bailee is a case like that above mentioned. The labor and materials are expended in response to the desire of the owner of the property, and therefore it is just that he should pay for the property he destroyed. In one of the old cases a horse was sent to a farrier to be cured and was burnt before a cure was completely effected. Nevertheless, the farrier was entitled to payment for what he had done. Likewise, the owner of a ship that is destroyed by fire a few hours before the completion of repairs, cannot escape payment on the ground that he has reaped no advantage.

As the illness or death of a contractor does not, like fire or shipwreck, deprive the other party of the fruits of what has been already done, the benefit resulting to him is more obvious, and the element of hardship is wanting that appears in many of the cases. The value of his services or the materials he may have used may therefore be recovered. In one of the cases A agreed that he and his wife should live in B's house and maintain him for life. As A's wife died the contract could not be performed. Nevertheless, A recovered the value of the service he had rendered to B during the lifetime of his wife.

Wagering contracts either by statute or judicial decision are illegal and void in most or all the states. In many of them the statute permits the recovery of the money from the stakeholder or the winner. Payment over to the winner after notice or demand by the loser is not a good defense in an action against the stakeholder. Again, the winner is liable who, when receiving the money, knows that the stakeholder has been notified not to pay it over, or has received notice not to take it.

The legality of contracts made or to be performed on Sunday is determined generally by statute. Generally, when a contract is made on Sunday, or is fully performed on both sides, the money paid or other thing done in execution of it cannot be recovered. Again, one who is induced by fraudulent representations to enter into a contract which is in violation of a Sunday law is not so much in the wrong as the other, and consequently may recover a benefit he has conferred on the other party in performing the contract.

If a member of a firm gives a promissory note signed by the partnership name, for a debt of his own, which his partner is compelled to pay, he may recover the money from the other. So, if a carrier by mistake delivered goods to the wrong person who keeps them, and the carrier is obliged to pay for their value, he can recover the amount of the other person who thus wrongfully keeps them.

Whenever a person makes a payment to another under such a mistake of the material facts as to create a belief in the existence of a liability which does not really exist, the money may be recovered back. Such an obligation arises where money is paid as due on the basis of erroneous accounts, and on a true statement of account is found not to have been due. A voluntary payment with knowledge of all the facts cannot be recovered, even though there may have been no obligation to pay.

A person cannot recover money paid under a mistake of fact who has received the equivalent for which he bargained, because there is no failure of consideration. Nor is the fact immaterial that he need not, and would not have made the payment had he known the true state of things. A bank, for example, that pays the check of a depositor under the erroneous belief that it has sufficient funds, may not recover from the payee the excess to the depositor's credit. But if the purchaser of goods has paid the price, and the seller fails to deliver them, the purchaser may recover his money. And in any case, a person who has paid money under an agreement which he may rescind and does so, because there was a failure of consideration, may recover what he has paid. An action will lie against a person who sells goods as his own, but which do not belong to him, whenever the real owner claims them from the purchaser. In like manner an action will lie against a person who sells bills, notes, bonds, stock or other securities which prove to be worthless, or against a person who agrees to transfer the title to land which, for lack of title or other reason, cannot pass.

As a rule, the consideration of a contract must totally fail to entitle a person to recover back the money he has paid. If the consideration has only partly failed, the remedy, if there is any, is for a breach of the contract, and not to recover back the money he has paid. Thus, if an article is sold with a warranty of its quality, and it is not worthless, his remedy is an action to recover damages for a breach of the warranty, and not an action to recover back the money paid for the thing purchased.

A liability cannot be imposed on a person without his act or consent. One man cannot force a benefit on another without his knowledge or consent, and then compel him to pay for it. "If a person," says Clark, "intentionally and knowingly performs services for another or otherwise confers a benefit on him without his knowledge, so that he has no opportunity to refuse the benefit, the law will not create a liability to pay for it. So, where a person supplies another with goods, the latter supposing that he is being supplied by another person with whom he had contracted for the goods, the law will not even imply a promise to pay for the goods." Where benefits are conferred by one person on another under such circumstances as to raise no promise in fact or in law to pay for them, he may, nevertheless, become liable by retaining them. Thus, if a person were to receive goods from another reasonably but mistakenly believing them to be intended as a gift, and, after learning of his mistake, should retain them, when he might return them, or if he should receive part of the goods purchased from another, and retain them after failure of the latter to supply the rest of the goods, the law would compel him to pay for them. And the same rule applies where benefits are in any other way received under such circumstances as to create no contractual obligation, and are retained when they should in justice be returned. If, however, the benefits thus received are incapable of being returned, as where they consist of services, or of materials which have been used in repairing a house, no liability is created.

=Sale.=--By a contract to sell goods the seller agrees to transfer the property in them to the buyer for a consideration called the price. There is an important distinction between a contract to sell in the future and a present sale. The first is called an executory, the other an executed, sale. If the goods are to be transferred, there is an executed sale even though the price is not to be paid at the same time. But if the price is paid, and the goods are not then to pass, the transaction is a contract to sell, or an executory sale. Both kinds of sales may be by deed or sealed contract as well as by parol or orally.

Sales and contracts to sell are based on mutual assent, the intent, therefore, of the parties fixes the nature and terms of the bargain. If the offerer understood the transaction to differ from that which his words plainly expressed, it is immaterial, "as his obligation must be measured by his overt acts." Thus, if an offer to buy or sell is sent by telegraph, and is improperly transmitted by the telegraph company, an acceptance by the offeree creates a binding bargain. By using the telegraph as an agency of communication, the offerer makes himself responsible for the offer actually delivered. Of course the telegraph company would be responsible to the offerer for any damage he may have suffered unless relieved by some neglect or fault of the sender of the message.

A contract of sale may be conditional, for example, that the property shall not be transferred until the price is paid. Though the property is transferred by the sale, promises or obligations may still be unperformed by the seller. Or the transfer of the title may be conditional on payment of the price. In such sales the goods are delivered to the buyer, but the title is retained by the seller until payment.

The capacity to buy and sell is regulated by the general law concerning the capacity to contract, transfer and acquire property. When necessaries are sold and delivered to a minor, or to an insane or drunken person, or to a married woman, who is lacking in mental capacity to make a contract, he must, by the general Sales Act, pay a reasonable price therefor. Necessary goods by this act mean those suitable to the condition of the life of the minor or other persons above mentioned at the time of their purchase and delivery.

As we have seen (See _Minor_) a minor may avoid his contracts. The right to do this is given for his protection, and should not be stretched beyond his needs. Therefore the right is confined to himself or his legal representatives. Neither creditors, nor trustees, nor assignees in bankruptcy can do this, but his heirs can do this, and probably his guardian. By the common law a purchaser for value who did not know that the seller bought them of a minor could not retain them if the minor wished to reclaim them as his own. This rule has been changed by the Sales Act, and a bona fide purchaser is therefore safe in purchasing such goods even though the seller did buy them from a minor.

As a minor may disaffirm his contract, any act clearly showing this intent is sufficient. "It was early settled," says Williston, "that an infant's conveyance of realty could be avoided only after he attained his majority. In the case of personal property a sale may be avoided during his minority by an infant seller or buyer. Though an infant may thus avoid his sales, purchases or contracts during infancy, he can make no effective ratification until he becomes of age, for an infant's ratification clearly can be no more effective than his original bargain."

In the Sales Act the Statute of Frauds (See _Statute of Frauds_) has been reënacted, and provides that in a sale or contract to sell goods amounting to five hundred dollars or more, it cannot be enforced unless the buyer shall accept a part of the goods, or give something in earnest to bind the contract, or in part payment, or makes some note or memorandum in writing of the sale which is signed by the party or his agent against whom the other party seeks enforcement.

This statute applies to a contract for goods that may be intended for future delivery, but not to goods that are to be manufactured by the seller especially for the buyer and are not suitable for sale to others in the ordinary course of the seller's business.

The Sales Act contains an important section relating to the sale of an undivided share of goods. If the parties intend to effect a present sale, the buyer becomes an owner in common with the owner of the remaining shares. How important is this section may be easily learned. The grain of many owners is often mingled in an elevator. It is delivered to those who call for it, the kinds and quantities mentioned in the receipts given to them at the times of storing it. The grain in the elevator may be delivered many times before a particular depositor makes his demand. The elevator company must keep on hand enough grain to meet all outstanding receipts. Each depositor thus retains title to some portion of the grain in the elevator. The company is the bailee with the power to change the bailor's separate ownership into an ownership in common with others of a larger mass, and back again. At any given moment all the holders of receipts for the grain are tenants in common of the amount in store, each owning a share and all owning the entire amount, each having the right to sell his share and demand its separation and delivery in accordance with custom and the terms of the receipt.

When a party has specific goods which, without his knowledge, have perished partly or wholly, the buyer may treat the sale as avoided, or as transferring the property in all of the existing goods and as binding him to pay the full agreed price if the sale was indivisible, or if divisible the agreed price for the goods in which the property passes. One can readily imagine trouble when none of the goods have been destroyed but all are in a condition inferior to that supposed at the time of the bargain. In such a case the "only question is whether the article has been so far destroyed as no longer to answer the description of it given by the contract."

The price may be fixed by the contract or in such a manner as the parties may agree, and may be made payable in personal or real property. When the price is not determined in the way mentioned in the Sales Act, the buyer must pay a reasonable price. This is a question of fact in each case. Usually, the price, either in an executed sale or in a contract to sell, is fixed by the parties at the time of making the bargain. In the agreement to sell there must be a consideration on both sides to sustain it. Sometimes the parties agree that the amount of the price shall vary according to the happening, or failure to happen, of a future event. Such a contract may be a wager, which is forbidden by law, or it may be legal, as we shall soon learn. Whenever no price has been fixed the law has established a rule, a reasonable price. It is the intention and understanding of the parties that a buyer who orders a barrel of flour from his grocer will pay a reasonable price. Likewise a buyer who orders a carriage to be made for him and says nothing about the price.

What is a reasonable price? Generally the market price at the time and place fixed by the contract or by law for delivering the goods, but not always. Under unusual conditions the market price does not furnish the only test. Said the court in one of these cases: a reasonable price may or may not agree with the current price of the commodity at the place of shipment at the precise time of making it. The current price of the day may be highly unreasonable from accidental circumstances, by the action of the seller himself in purposely keeping back the supply.