cable. In most of our states this rule obtains, provided the chattel to be made is one which the seller is in the habit of making in his business. On the other hand, if the chattel is to be specially manufactured the statute is not applicable. Though in New York and a few other states the rule was somewhat different, the Massachusetts rule has been almost universally adopted through the Uniform Sales Act. (Chap. 571, Laws New York, 1911.)

The expression, "goods, wares, and merchandise," comprises all portable corporeal property. In this country, it also comprises incorporeal property, such as promissory notes, bonds, stocks, etc. In England, incorporeal personal property is not included. In both countries the expression comprises emblements, i. e., growing annual crops, but not perennial crops, such as grass, fruits, etc. It does not include standing trees, except where the ownership is not to pass until after

severance.

EXAMPLES

60. A makes B an oral offer of $10,000 for a certain farm. B accepts the offer in writing. B is bound but A is not.

61. A holds a promissory note against B which B refuses to pay. C orally promises A that he will pay the note if A will not sue B, and A agrees. C is not bound. His promise is to answer for the default of another party, and to be binding must be in writing.

62. A desires to purchase of B a suit of clothes on credit. Corally promises B that if A fails to pay for the suit that he will. C's promise is a collateral undertaking and not binding.

63. A orally promises his son, B, that he will transfer to him (B), a certain farm if B will marry C. B marries C. A's promise is not binding because it is not in writing.

64. A orally agrees with B to sell him an acre of growing

turnips for $25. B gathers the turnips and A claims them on the ground that their contract falls within the fourth section of the statute of frauds. A's contention is wrong. Growing turnips are personal property.

65. A orally agrees with B to sell him the standing timber on a certain tract of land for $25, ownership to pass at once. Before the timber is cut, A repudiates the contract. A is not liable for breach of contract. The standing timber is realty. The timber would be personalty if A agreed to cut it and measure it before he passed title to B.

CHAPTER V

FORMATION OF CONTRACTS: VOID AND VOID-
ABLE CONTRACTS

93. Legality of object.-An agreement whose object is illegal does not result in a contract and therefore is not enforcible at law. It may be illegal either because it is in violation of positive law or because it is contrary to public policy. An agreement to do an act which is positively prohibited by statute is illegal and void. But an agreement to do an act, the doing of which is penalized by statute is not necessarily illegal. The question of its illegality is one depending upon the construction of the particular statute.

An agreement to do an act involving the commission of a crime is illegal. And an agreement to commit even a civil wrong is usually illegal. Thus, an agreement to carry out a fraudulent scheme and divide the profits is illegal. And an agreement to defraud creditors is illegal. A debtor may make a composition with his creditors, but if, in order to obtain the consent of a particular creditor, he secretly promises him some advantage over the others, the agreement is illegal and void. This was held in an English case:

Each creditor consents to lose part of his debt in consideration that the others do the same, and each creditor may be considered to stipulate with the others for a release from them to the debtor in consideration of the release by him. Where any creditor, in fraud of the agreement to accept the composition, stipulates for a preference to himself, his stip

ulation is altogether void; not only can he take no advantage from it, but he is also to lose the benefit of the composition.1

94. Wagering contracts.-At common law, wagering contracts were enforcible. By statute, however, both in England and in this country, they are illegal. A wagering contract is one by which one of the parties agrees to pay the other money or property upon the happening of an uncertain event.

Contracts of insurance, although in the nature of wagering contracts, are enforcible.

95. Board of trade contracts.-Contracts made for the sale and future delivery of commodities at definite prices are legal or illegal depending upon the intention of the parties. When the intention is actually to deliver the commodities as agreed they are legal. But when the intention is merely to make a settlement by one party paying the difference between the market price and the contract price, they are illegal. And a note or bond given in payment of such settlement is void.

96. Usurious contracts.-Statutes prescribe what shall constitute a legal rate of interest on loans where the agreement for interest does not specify the rate. They also prescribe what shall constitute a maximum rate. When the agreement specifies a greater rate than the maximum allowed by statute the excess is usury.

The statutes relating to usury are not harmonious. Some declare the excess void; others declare the whole interest forfeited; while still others declare the contract void. In a few states and in England the usury statutes have been repealed.

Corrupt devices the object of which is to defeat the usury laws are ineffectual.

1 Mullalieu v. Hodgson, 16 Q. B. D. 689.

97. Contracts in restraint of trade.-Contracts which unreasonably restrain trade are void. Such contracts are against public policy because they tend to create monopolies and because they take away from one of the parties a mode of making his living.

When the restraint imposed is greater than is reasonably necessary it is void. If it is not unreasonable and does not unduly prejudice the interests of the public and is founded upon a valuable consideration it is enforcible.

The restraint may relate to space or time, and in regard to either may be unlimited. In all cases, however, it must be reasonably necessary to protect the party in whose favor it is imposed.'

98. Unlawful combinations.-Combinations between dealers in staple commodities to control and increase the price by decreasing the production, or preventing competition are illegal and void. This doctrine was set forth in a Pennsylvania case:

2

When competition is left free individual error or folly will generally find a correction in the conduct of others. But here the companies have combined together to govern the supply and the price of coal. This combination has a power in its confederated forms which no individual can confer. The public must succumb to it, for it has left no competition free to correct its baleful influence. When the supply of coal is suspended, the demand for it becomes importunate, and prices must rise; or, if the supply goes forward, the price fixed by the confederates must accompany it. . The influence of a lack of supply, or a rise in the price, of an article of such prime necessity, cannot be measured. Such a combination is more than a contract; it is an offense.

1 The text of the Sherman Anti-Trust Act will be found in Appendix I. See also the leading case of Diamond Match Co. v. Roeber, 106 N. Y. 473, 11 St. R. 47; 27 N. Dig. 174.

2 Morris Run Coal Co. v. Coal Co., 68 Pa. 173.