Savings banks are not unconstitutionally discriminated against by making applicable to them alone the provisions of Mass. Laws 1907, c. 340, that deposits which have remained inactive and unclaimed for thirty years, where the claimant is unknown or the depositor cannot be found, shall be paid to the treasurer and receiver general, to be held by him as trustee for the true owner or his legal representatives. The obligation of the contract between

a savings bank and its depositor is not unconstitutionally impaired by Mass. Laws 1907, c. 340, providing that deposits which have remained inactive and unclaimed for thirty years, where the claimant is unknown or the depositor cannot be found, shall be paid to the treasurer and receiver general, to be held by him as trustee for the true owner or his legal representatives.

1442.

CONTRACTS:

No.

May be made by correspondence; may be partly oral; parol evidence inadmissible to complete or vary an insufficient written contract; formal written agreement required to make contract, after correspondence and oral negotiations. Page 31a, No.

1408.

The place where a contract is made depends not on the place where it is actually written, signed, and dated, but on the place where it is delivered. Page 46a, No. 1416. A stipulation in a bill of sale of a business that the seller will not

engage in a competing business within a limited territory for a limited period of time, is not contrary to public policy, but will be enforced to enable the seller to sell his business at full value, and to enable the purchaser to obtain the personal favor of the seller. Page 47a, No. 1417.

Where a contract made written acceptance by the architect a condition precedent to payment, a recovery

CONTRACTS Continued.

can be supported only by proof of acceptance.

Where a contract made written acceptance by the architect a condition precedent to recovery, and no waiver was pleaded, an acceptance after suit will not support recovery and is inadmissible in evidence, for until acceptance the purchaser is not in default. Page 157a, No. 1483.

A reduction of a contract to writing supplants all prior or contemporaneous verbal agreements. Page 166a, No. 1490.

Contracts in violation of statutes, enacted to protect the public against fraud or imposition, or to safeguard the public health or morals, which contain a prohibition and impose a penalty, are void. Page 171a, No. 1493.

CONTRACTS-CONSIDERATION: In the absence of fraud or overreaching, the courts will not inquire into the adequacy of the consideration of a contract, but will only inquire into its legality. Page 64a, No. 1427.

CONTRACTS

REFORMATION OF: When an owner granted right of way to a railway in consideration of switching privileges, conveyance and privileges constituted an instrument, and though the owner was not a party to his tenant's contract with the railway, he could sue to reform the contract; the covenant in the contract ran with the land and a subsequent lessee was entitled to the benefits.

A suit in equity to reform an instrument may be brought at any time within the statutory limit of ten years. Page 32a, No. 1407. CONTRACTS

TRADE:

-

RESTRAINT

OF

A contract for the sale of a business may impose a reasonable restraint of trade.

A contract imposing a partial restraint of trade must be incidental to another contract or sale, in which the covenantee has an interest requiring protection.

A contract in restraint of trade will be sustained only when the restraint is not more extensive than is reasonably required to protect the covenantee's interest in the property sold, and when it does not interfere with the public's interest by creat ing a monopoly.

TRADE-Continued.

Plaintiff sold to defendant certain laundry machinery, which plaintiff had used in his business, in consideration of $1,600, and the contract further provided that plaintiff had abandoned the shirt, collar, and cuff laundry business, and confined its business to doing family laundry and special work in shirts, collars, and cuffs from hotels, and that such stipulations should bind plaintiff, so far as the city or territory adjacent thereto was concerned. Held, that the agreement to abandon the shirt and collar business in the city was merely ancillary to the contract for the sale of the laundry machinery, within the rule requiring a contract imposing a partial restraint of trade to be incidental to another contract. Page 79a, No. 1437.

Mass. St. 1907, c. 290, effective April 13, 1907, relating to the dissolution of certain corporations, provided (section 2) that nothing in the act should affect any suit pending by or against any corporation mentioned in the first section thereof. Held, that the word "suit," as used in such section, included every proceeding in a court of justice by, which a person might pursue a rem-" edy afforded by law, including an action at law, and that the word "pending" was descriptive of the action from the date of the writ, so that, the writ in a suit by a corporation having been dated April 9, 1907, the suit was pending, and was not abated by the dissolution of the corporation under such act, notwithstanding the reference in section 1, St. 1903 of Mass., c. 437, sections 52 and 53, continuing the corporate existence of dissolved corporations, for three years only, to prosecute and defend suits. Page 44a, No.

1415.

Where the incorporators took the formal steps required by statute to entitle the corporation to a certificate of incorporation, and the secre

CORPORATIONS

Continued. tary of state issued a certificate in due form, the corporation was a de facto corporation, though it had no stockholders, and though no part of its capital stock was paid in. A transfer of property by or to a de facto corporation cannot be collaterally attacked, and is valid against all persons except the state. Page 65a, No. 1428.

In detinue for machinery, in which a claim was interposed by a third party under a chattel mortgage, evidence that plaintiff had informed a stockholder and director of claimant, though before the claimant corporation was organied, that the title to the machinery was in the plaintiff, was admissible in evidence to show actual knowledge of plaintiff's claim by claimant corporation, making its exclusion prejudicial error to plaintiff. Page illa, No. 1457. The fact that the secretary of a corporation, in signing a renewal note of the corporation which the payee understood was to be signed by the directors personally, in adding the word "Sec." to show that he signed merely for the corporation, used different ink from that in which the original signatures were written, would not of itself give notice to the payee afterwards accepting the note of such change. Page 124a, No. 1463.

Where an officer of a street railway company which purchased the right of way of an insolvent company was also an officer of the insolvent company, his knowledge as to the rights of a railroad company in a crossing was attributable to the purchaser.

General Corporation Law (N. Y.) provides that no foreign stock corporation, other than a moneyed corporation, shall do business in the State without having first procured a certificate that it has complied with the requirements, and that no foreign stock corporation shall maintain an action upon any contract made in the State unless it has secured such certificate. Held, that a contract executed within the State by a foreign stock corporation which had not complied with the statute was not void, but only unenforceable in the courts of the State. Page 158a, No. 1484.

COURTS:

The damage caused by the failure of a connecting carrier in an interstate shipment to deliver the goods to the consignee, for which failure the initial carrier is made liable, is not traceable to a violation of the statute, redress for which can only be had in the Interstate Commerce Commission or in the federal courts. The jurisdiction of State courts extends to any civil and transitory cause of action created by a foreign statute, provided it is not opposed to the public policy of the State in which the suit is brought.

A State court may enforce the liability of an initial carrier of an interstate shipment by which such carrier is made liable for a loss beyond its own line. Page 153a, No. 1480.

DAMAGES:

For any inexcusable violation of a valid contract, the defaulting party, whether there be any express stipulation to that effect or not, must respond in damages to the extent of fairly compensating the other party for the injury suffered.

a

Where a contract is conditioned for the performance of collateral agreement, the sum mentioned therein as accrued damages will be presumed to be a penalty; and it is incumbent upon the party desiring to recover the sum mentioned as liquidated damages to show that it was so intended by the parties. When the actual damages in the case of a breach of contract must necessarily be speculative, uncertain, and incapable of definite ascertainment, the stipulated sum will be regarded as liquidated damages, and may be recovered as such without proof of actual damages, unless the language of the contract, or the circumstances under which it was made, indicate a contrary intention, or it so manifestly exceeds the actual injury suffered as to be unconscionable. Where parties are competent to contract, are equal masters of the situation, and deal at arm's length, a court of equity will not disturb the measure of damages established by them, unless it is so grossly unconscionable and oppressive as to shock the conscience of the court. Defendant conveyed real property to the plaintiffs for the purchase price of $16,300, of which a part was paid in cash, and a remaining $7,500 paid by a note which stated that it was subject to all the terms

and conditions of a mortgage of real property, which it was given to secure; the mortgage by its own terms, and by reference to the terms of a separate agreement, providing that the plaintiffs should furnish defendants a certain amount to be expended on the property within a year, and that on performance of such condition plaintiffs should have an option either to pay the note, or within a year to require defendant, upon prescribed notice, to repurchase the property for $24,000 cash within thirty days; and, as liquidated damages for the defendant's failure to repurchase, it was provided that the mortgage given by plaintiffs should, together with the debt secured thereby, become immediately void, and the defendant should thereupon cancel the note and release the mortgage of record. Held, that the provision for liquidated damages in the alternative,

on

defendant's failure to repurchase, was not so unconscionable as to prevent its enforcement in plaintiff's action for the cancellation of the note and mortgage. Page 114a, No. 1458.

DEEDS:

A corporation, by its president, executed a deed to another corporation of which the same person was president, and on the same date the grantee, by its president, executed a deed of trust to secure purchasemoney notes. Both corporations treated the deed as delivered, and the deed of trust and the purchasemoney notes were pledged as collateral for a loan made to the grantor by a third person. Held, to show that the deed was delivered so that title passed thereunder prior to the execution of the deed of trust. Page 65a, No. 1428.

ESTOPPEL:

Where one of two innocent persons must suffer for the wrongful act of a third, he who gave the power to do the wrong must bear the burden of the consequences. Page 72a, No. 1433.

An estoppel, whether resting in judg ment, deed, contract, or in pais, means only that a man is forbidden to show the existence of a fact where, by his past conduct, declarations, agreement, deed, or judgment, it would work an injustice and an

XX

ESTOPPEL- Continued.

injury to his adversary to permit him to do so. Page 117a, No. 1459. One holding an option to purchase an undivided half interest in land at four dollars an acre, by claiming on a former trial of a suit for specific performance, that the option was an offer to sell the vendor's interest at two dollars an acre and that a tender made in the language of the option was a tender of that amount, was not estopped to claim on a subsequent trial, and after the Supreme Court decided on appeal that the price was four dollars an acre and not two dollars, as found by the trial court, to present his offer as a sufficient tender at four dollars an acre and as an acceptance of the option; he not having been put in default by any demand by the vendor for payment.

An equitable estoppel is not raised by conduct of one party to a suit unless, by reason thereof, the other party has been so placed to as make it unjust to him to allow the first party to change position.

One suing on a contract can claim a construction unjustly favorable to him and ask for a larger judgment than he is entitled to without being estopped to claim his lawful right before the cause is determined, if the other party will not be prejudiced by the change of claim. To constitute estoppel, the condition caused by the conduct of him to be estopped, must be such that the other party will be prejudiced, if the first party is permitted to pursue another course, and claimant of the estoppel must himself have been ignorant of the truth of the matter

or of the extent of his rights concerning the same. Page 119a, No. 1460.

Any negligence of the cashier of a bank in accepting a renewal note without examining it to see if it was signed by the directors of the maker-corporation personally as understood by the parties would not estop the bank from rescinding acceptance of the renewal note for mistake, in absence of a showing that the parties had changed their position to their injury. Page 124a, No. 1463.

a

Where the applicant for insurance was not deceived and no fraud was practiced, parol evidence is inadmissible to vary the application. One who signed a contract without reading it, cannot plead that fact. Though an insurance company retains part payment of a policy, and the applicant dies before delivery of policy, the company incurs no liability. Page 29a, No. 1406. Where a written contract between retail piano dealer and a third person proceeded on the theory that the title to pianos procured from manufacturers and paid for by the third person was in the latter, but did not show how the title was to pass to him, evidence of a prior oral agreement that the third person should take the place of the manufacturers, and that the dealer would buy the pianos and give a consignment receipt for them to the third person, was admissible to illustrate the meaning of the contract, without contradicting it. Page 61a, No.

EVIDENCE - - Continued.

The rule that one who signs a contract without reading it, when he has an opportunity to do so, cannot rely upon his ignorance to avoid the contract, would not apply to prevent the payee of a note from showing that a renewal note was accepted by it under the belief that it was signed personally by the directors of the corporation as well as by the corporation; no rights being asserted under the contract, and the note not being signed by the accepting party and not being the sole evidence of the transaction. Page 124a, No. 1463.

Parol evidence being inadmissible to vary or contradict a written instrument, a contract of indorsement, whether special or in blank, cannot be explained or denied by parol evidence, except to show failure of consideration or an irregular indorsement, or to impeach the indorsement for fraud, or to show that it is the subject-matter of a trust. Page 146a, No. 1475.

When an administrator filed only a first account, on which no action was taken until after his death, decree upon the second account, presented by the second administrator, who was also administrator of the first administrator, is decisive

against the surety on the first administrator's bond as to the amount of his defalcation, and cannot be collaterally attacked in a suit by the second administrator against the bank in which the estate funds were deposited to recover moneys which the bank's negligence perImitted the first administrator to embezzle.

The failure of the next of kin to ascertain that the estate was being misappropriated, where such failure did not mislead the surety on his bond, would not defeat a suit on such bond by the second administrator. The second administrator of an estate, after a defalcation by the first administrator, by relying on his surety bond, did not thereby waive his right to proceed subsequently against the bank charged with participation in the misappropriation, even if, by agreement between them, the expenses of the suit were to be borne by the surety, and, if successful, the amount recovered was to be

EXECUTORS AND ADMINISTRATORS Continued.

divided in certain proportions for its benefit and the benefit of the estate.

Where an administrator gave an agreement of indemnity to procure a contract of suretyship, the failure of the surety to enforce such agreement, the agreement being only for the protection of the surety, does not estop the second administrator from proceeding against a bank which participated by negligence in the first administrator's embezzlement of the funds of the estate. Where a bank receives deposits of an individual, and also of an estate, naming such individual as administrator, and pays checks of the estate to the individual account to reimburse for overdrafts on individual account, the estate fund was not changed by the transfer.

A bank, knowing a fund on deposit is a trust fund, cannot appropriate it, or join in assisting others to appropriate it, without being liable, if the appropriation is a breach of trust. Page 141a, No. 1471.

FRAUDS, STATUTE OF:

An oral promise of a father to pay a debt due from his infant son is void under the statute of frauds. Page 73, No. 1434.

GOOD WILL:

An owner of a butcher business sold the business and fixtures in storeroom, and agreed not to enter into such business within twelve blocks thereof for two years. Within the prohibited area and time he advertised a butcher business as his own to be carried on under his name, followed by the word "manager. No one else publicly appeared as having any interest in the business. Held, that there was a breach of the agreement. Page 64a, No. 1427. A bill of sale of a business recited that in consideration of a specified sum paid, the seller sold his butcher business and fixtures and tools located in a storeroom and that the seller would not enter into such business within twelve blocks of the building for two years. Held, that the consideration paid was a consideration for the sale of the business and fixtures, and for the agreement not to enter into a competing business. Page 64a, No. 1427.