Part 17

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.