Putnam's Handy Law Book for the Layman

An absolute divorce, even though for the husband's fault, divests the wife of dower, unless her right is saved by statute. Quite frequently, the statute provides that there shall be no dower in case of divorce for the wife's fault. Occasionally it is provided by statute that divorce for the husband's fault shall not bar dower; and sometimes a statute requires dower to be assigned immediately upon divorce without awaiting the husband's death. It may be added that the principles of the common law relating to dower have been largely modified by statute in all the states.

Drunkenness.– The courts are reluctant to recognize intoxication as an excuse either for committing a crime or for repudiating a contract, but if from long continued intemperate habits a man has become actually insane or incompetent, his actual mental condition will be recognized whatever may have produced it.

Again, in making a contract the other party could hardly deal with a man badly intoxicated without knowing his condition, consequently the element of fraud appears, and the contract may be declared invalid either for lack of contracting capacity on the part of the drunken man, or for fraud on the part of the other in taking advantage of his condition. His fraud would be still greater if he had designedly caused the drunkenness of the other. Either objection, however, renders the contract voidable rather than void, and should an intoxicated party, after he became sober ratify his contract, or fail to repudiate it and restore the consideration, if any, within a reasonable time, he would become bound.

The courts are still more reluctant to admit intoxication as an excuse for criminal acts. The courts hold that one who voluntarily deprives himself of self-control must have intended the consequences, therefore it is everywhere held that one who voluntarily becomes intoxicated, although he did so with no purpose to commit a crime when intoxicated, cannot claim immunity from criminal responsibility, or even a mitigation of the penalty, though having no capacity to distinguish between right and wrong. And yet, like so many legal rules, there are some marked exceptions to this one. Thus, since burglary is the entering of a house with the intent to commit a felony therein, one who blunders into a strange house because he is too drunk to know where he is or what he is doing has not committed the crime of burglary. So one who carried off the property of another through drunken ignorance does not commit larceny, as there is no intent in such a case to convert the property to the taker's own use. Another application has been made in cases of assault with intent to kill a person.

Again, says Peck, "if one is visibly intoxicated, it is the duty of those who come in contact with him to take his condition into account, and their use of due care will be judged in view of that fact. Even if the drunken person and the other are both negligent, the sober party may be liable under the doctrine of the last clear chance, if he fails to exercise toward the drunken man the degree of care which is evidently required to avoid injuring him. Especially is a common carrier, in dealing with a passenger who is on its car in an intoxicated condition, bound to take his helpless condition into account in removing him from the car or otherwise handling him, and not put him in a place of manifest danger to one in his condition."

It has also been held that the intoxication of one who uttered a slander may be admissible in mitigation of the damages, as utterances of a drunken man could not seriously impair the reputation of any one.

Equitable Remedies.– Elsewhere we have told how courts of law differ from courts of equity. In some states no separate courts exist, and wherever legal proceedings are established by a code or system of statute law, the form of complaint addressed to a court is quite the same in an equity case as in any other. But in states where code practice has not been established, the mode of setting forth one's grievance or wrong is by a bill or petition, ending with a prayer for relief. We will now briefly state some of the things for which relief in equity may be sought.

One of the most common things is to compel persons who refuse to perform their contracts to execute them. Suppose one has agreed in writing properly signed to sell his farm to another, but is unwilling to give him a deed. It may be that he can get more for his farm, or he has made the discovery since selling it that it is worth much more, is underlaid with coal or oil, or that a railway is soon to be built near it that will enhance its value. If he went to a law court, all that it could do would be to compel the seller to give the purchaser such damages as he could prove he had sustained from the seller's failure to execute his agreement. But a court of equity can go further and compel the seller to give the purchaser a proper deed, the kind of deed mentioned in the agreement; or, if none was specified, the kind of deed usually given in such cases.

This remedy cannot be always sought whenever the seller fails to execute his contracts. The important limitation is, when the law has an adequate remedy, and the injured person has no need of resorting to a court of equity. All the ordinary agricultural and manufactured products fall within this class, cotton, cattle, lumber, fruits, stock in trade and the like. But if a chattel has a sentimental value to the purchaser, a court of equity will decree that it must be delivered to him, because in such a case the damages would obviously be inadequate. The same rule applies to all articles of a unique or rare value that cannot be duplicated; also to patented or copyrighted things that cannot be procured in the open market.

Suppose one has purchased the stock of a bank or railroad company, which the seller refuses to deliver, has the buyer a legal remedy for damages, or an equitable remedy to compel the seller to deliver the stock, or has he the choice of remedies? The courts have divided on this question. The better rule is, if the stock can be readily bought in the open market, the buyer has only a law remedy to recover damages from the seller's failure to execute his contract; if the stock cannot be thus purchased, a money damage is not an adequate remedy, the purchaser wants the stock and he can, through a court of equity, compel the seller to deliver it to him. As government bonds can always be bought in the open market, a court of equity will not decree the specific execution of a contract for the delivery of the actual bonds purchased.

If A has agreed to erect a building for B on his land and fails to do it, money damages are usually an adequate remedy, but if B cannot find any one else to do the work as well, or in as satisfactory manner, then a court of equity would compel A to fulfil his agreement. Likewise if a landlord has agreed to repair his tenant's premises and neglects, the legal remedy is usually more satisfactory than a specific execution of the agreement, because work done under compulsion is not likely to be as well done as that done voluntarily.

A contract to render personal services will not be enforced against a person who has agreed to perform them, for several reasons, one is that another person can be employed, another is that the thirteenth amendment to the federal constitution, forbidding involuntary servitude, cuts off the equitable remedy in such cases; of course the legal remedy for damages is still effective. A contract to give a mortgage to secure a loan of money may be enforced by the creditor, but a contract to lend money cannot be enforced by either party, because there is usually an open market for the lending and borrowing of money. Likewise a contract to form a partnership cannot be enforced, for, if it were, the unwilling partner could dissolve it and thus nullify the action of the court.

Where one sells out his business, whether commercial or professional, and agrees not to compete with the buyer, equity will compel the seller to observe his contract unless it was illegal or an unreasonable restraint on trade. This limitation is important. Thus A, a dentist in Philadelphia, agreed with B, another dentist, not to practice in the city for ten years a certain method of extracting teeth. A continued to practice as before and B applied to a court of equity to enjoin him. He failed for the reason that no one ought to have a monopoly, so the court said, in any means or method for relieving human suffering, like the process in dispute. If an employee agrees not to divulge the trade secrets of his employer, equity will enforce the agreement, for damages given in a law court would be wholly inadequate.

Another class of cases must be mentioned relating to injuries to land. By the common law the only relief a landowner had against one who injured it in any way was an action of waste to recover money damages. A court of equity has power to issue a command to the person who threatens or attempts to commit injury ordering and directing him to desist from his purpose. This has been often used by the owners of land against their tenants who attempted to do things that would materially injure the property. This remedy is now often used to secure the owner and occupier of land in its proper use against those who attempt to commit a nuisance. While the occupier could recover damages if he sought the aid of a law court, equity will order the wrongdoer to abate the nuisance. Such a remedy is much more effective than the legal one, because damages that may be recovered relate only to a past offense, while the equitable one prevents it from happening or from its continuance.

Promises not to do some particular act on a piece of land are often made in deeds conveying them; they are called covenants. Equity will usually enforce these covenants, and will compel the wrongdoer to undo what he has done provided that relief is sought promptly. Thus if a purchaser agrees not to build nearer the street than a stated line, he can be enjoined from disregarding it. A purchaser therefore who built two houses three feet beyond the agreed line was compelled to remove them.

The remedy in such a case is an injunction. It may be temporary or permanent. Quite often when one applies for an injunction, if the injury threatened is immediate, the court will immediately enjoin the party from proceeding and fix a time for a future hearing to decide whether the injunction shall be dissolved or made permanent. The time fixed for such a hearing is within the discretion of the court, and depends on the nature of the case. Usually the time is quite short, enough to enable the parties to collect the evidence relating to the controversy. The hearing is conducted very much like any other trial, witnesses appear, all the evidence is given, and is reviewed by contending counsel, after which the judge announces his decision. Some of the more noteworthy injunctions of recent days have been rendered against labor unions or their members who, having struck for higher wages, or other ends, have sought to picket the works of their employers and thus prevent them from employing other workers to take the places of the strikers. The unions contend that this is an improper use of the judicial power, whether it is or not no one will deny that it has been long exercised.

In the early days of administering the patent law injunctions were granted against infringers. Judges soon grew more cautious when they learned that patents were sometimes erroneously granted, and that, on acquiring a fuller knowledge of the controversy, there had been no infringement. The modern practice therefore is, unless the proof is very clear, to require a party who applies for an injunction to try his case first and establish his patent and then, if it has been infringed, an injunction will be issued.

Factor.– A factor receives and sells goods for a commission, is usually entrusted with their possession, and sells them in his own name. He has a special interest or property in them, and a lien thereon for advances in money that he may make to the owners. No formal mode of authorizing him to act is required, usually this is done by word only, and his authorized acts may be ratified by his principal. This authority is largely the outgrowth of usage. The authority of a factor to fix the terms of selling may be by agreement or by usage, like any other agent. Limitations fixed by the principal are ordinarily binding on the factor, and, so far as they are chargeable with notice of them, third persons also. Where goods are confided to a factor without instructions, authority to exercise a fair and reasonable discretion is implied. Unless restricted by his principal, or by contrary usage, he may sell goods on a reasonable term of credit. If he is restricted to cash sales only, or is not protected by usage in selling on credit, he cannot do so. Secret instructions would not affect the rights of a purchaser ignorant of them and relying on customary authority.

A factor is employed to sell goods, and not to barter or exchange them, and if he should do this his principal could recover them. He may insure the goods, but is not required to do so unless instructed or is required by usage, which plays a large part in this matter and must be observed except as qualified by instructions.

He cannot compound or compromise a claim for the purchase price, or discharge the debt on payment of a part only, or submit a disputed claim for arbitration, or rescind a sale, or discharge a purchaser from any part of his obligation, or extend the time of payment, or make, accept or indorse negotiable paper contrary to instructions or usage, or sell the goods thus entrusted to him for sale to himself. See Agency.

Fire Insurance.– Insurance against loss by fire is now effected in companies organized for that purpose. Two kinds exist, stock and mutual. In mutual companies the persons insured act together to insure each other. The members of some of the largest mutual companies are manufacturing corporations. The more general mode of conducting them is to require each member to pay a premium in advance for the amount insured which, unless unusual losses occur, will be enough to pay all the losses for the year. If it is not all needed, the balance is returned to the parties who paid the premiums, or is credited to them for the following year. If the losses exceed the premiums thus paid in advance, then an assessment is made on each member to cover the deficiency. Generally the premium paid is more than enough to cover the losses, and a balance is returned or credited to the insured as above mentioned. As mutual companies do not take such risks as stock companies, the cost of insurance is less and therefore is carried in preference to insurance in stock companies, whenever it can be obtained.

There is another way for paying for losses in mutual companies. Instead of paying cash premiums in advance, the insured gives a bond or note well secured that he will pay in cash whenever a call is made on him to cover the losses that have been incurred at the end of the year or other period. This method is in vogue in some sections, because still less money is required to keep property insured. Of course besides the money to pay losses another sum is required to pay the expense of management. It will be seen that the mutual plan is purely for protection against loss and no profit in the way of dividends is forthcoming, for the companies have no capital. It is true that some companies, instead of returning the unexpended premiums for losses retain them or a part of them and by so doing accumulate a surplus. Many companies, however, return all the contributions not expended for management or losses and have no surplus, or only a very small one.

Stock insurance companies proceed on a different principle. They are organized to make money, a capital is subscribed, the rates of insurance or premiums are fixed and after paying the expense of management and loss, the balance is paid to the stockholders in the way of dividends. The business is one of unusual hazard, and only a rich person, who can afford to lose his money, ought to invest in the stock of such companies. Their profits and losses vary greatly from year to year; and failures have been frequent. Nevertheless some companies have a fine record, enough to tempt them to continue notwithstanding their trying reverses.

As the contract of insurance is for an indemnity, the insured must have some interest in the property insured, otherwise the contract is a mere wager, which the law condemns. Moreover the interest must continue and exist at the time of the loss. Who, therefore, has an insurable interest? A bailee, a carrier of goods, a consignee who has authority to sell them, a factor, pledgee, warehouseman, an assignee for the benefit of creditors, an executor or administrator, an attachment creditor, but not a general creditor, a landlord, tenant, mortgagee of real or personal property, a lienor, for example, the holder of a mechanic's lien, a receiver, residuary legatee or devisee, a trustee, vendees and vendors of real and personal property, the owner of stock in a corporation, any agent who has the care and management of his principal's property, besides many others. But a fire insurance policy may be assigned as collateral security with the company's consent, and continue valid though the assignee has no interest in the property. This rule therefore is fundamental, and if the interest of the insured in the property has been extinguished after making his contract and prior to its loss by fire, he can get nothing from the company. Likewise the property must have been in existence at the time of making the contract, if it was not, the policy is void. Many stories are told of insuring ships after learning of their loss; such conduct is a palpable fraud.

An insurance policy is a contract, of which the policy is evidence. A standard policy has been prescribed in several states by statute: in other states the parties are still free to make such terms as they please. It is usual for companies to execute blank policies in due form to be filled out and delivered by their agents. Such policies are not valid until countersigned, unless the countersigning is waived.

When does the policy become valid or binding on the insured? Says a competent authority: "Where a policy has been duly executed in compliance with an application on the part of the insured, so that the minds of the parties have fully met as to the terms and conditions of the contract, a manual delivery of the policy to the insured is not essential to render it binding on the company. If the contract has become binding by the issuance of the policy and the placing it in the hands of an agent for delivery, then the fact that such delivery is not actually made to the insured until after the loss has occurred, will not defeat recovery by the insured."

The premium usually must be paid at the time of issuing the policy, unless a different agreement is made concerning it. Credit may be given, and an agent generally has authority to do this. A valid payment may also be made in other means than money; a check or note may be given for it.

An insurance policy may be assigned, though it usually contains a clause that the consent of the insurer is needful. When the policy contains this clause and the insurer without valid reason refuses to consent to an assignment, "the assignee acquires the same right as though consent had been given."

Consent to an assignment may be given by the president of the company, without formal vote by the directors. It may also be given by the secretary or by any other agent duly authorized.

When can a policy be canceled? Unless this right is reserved in the contract, or given by statute, the insurer cannot cancel the contract without the consent of the insured. It often is reserved, and if exercised, this must be done before a loss occurs, and a cancellation made afterwards, though without knowledge of it, is void. The motive for making it is not important. If, as a condition of cancellation, the unearned portion of the premium is to be returned, the failure to return it renders the cancellation worthless. Nor is this effective until notice has been given to the insured.

A court of equity will reform a contract of insurance on the ground of accident, fraud, and mistake. Oral evidence is admissible to prove the fraud or mistake; it must, however, be clear before a court will grant relief. If mistake is the ground for asking relief, the insured must not have been guilty in causing it, and must act promptly after his discovery. This rule does not prevent him from seeking relief when the agent of the insurer has been negligent. Furthermore it may be granted even after the happening of a loss.

Should there be a conflict between the written and printed portions of a policy, the written portion will be presumed to represent the intent of the parties. If, therefore, the printed portion excludes certain articles from the risk, and the written portion covers them, they are included. Conditions also written or printed on the margin or back of the policy are regarded as portions of it, and these too will control the printed portions. Besides, the written application is usually considered a part of the contract and the policy is construed or interpreted in connection with it. This is especially so where the proposals and conditions are attached to the policy. If the intent of the policy is not clear from the language used, the surrounding circumstances may be shown for the purpose of ascertaining the intent of the parties. The known usage of trade may also be taken into account in construing the language of a policy.

The language of the policy should be so construed as to cover the property within the intention of the parties, and support, if possible, the contract of indemnity. Mere clerical errors or mistakes in describing it may be corrected even after it has been destroyed. The location is an essential element, and the policy will not be stretched to cover property not within the description. If a building is described this does not include separate structures used in connection with it, nor fixtures constituting no part of the structure. Unless expressly excepted, however, insurance covers those things which have been so annexed as to become a part of the realty but none others. The term store fixtures covers fittings, fixtures, furniture used in the course of trade, whether they are part of the realty or not. Likewise the term "stock" used in a mercantile business includes everything usually kept for sale, in that business, but nothing more; while household furniture includes all articles necessary and convenient for housekeeping. With respect to future additions these are covered by the policy unless it is so drawn as to show a clear intent to exclude them.

The risk usually begins with the date of the policy, unless it is effected by a preliminary contract. In such a case the risk begins from the date of the preliminary contract, and continues for the period fixed in the policy, or, if none has been fixed, for a reasonable time.

A misrepresentation voids a policy generally. It must not only be false in fact, but the insured must have known that it was false when making it in a substantial and material respect. The misstatement of an agent of the insured will have the same effect. Indeed, any fraud of the insured in procuring the policy has the effect of voiding it if the insurer chooses to do so. Of course, the wrongful facts or acts of the insured possess a varied character. His conduct in concealing facts that ought to have been made known to the insurer may have that effect. Thus to conceal a fact of which the insured had knowledge, and which, if known by the insurer the risk probably would not have been taken, is a fraud rightly available to the insurer.

The parties to an insurance contract may agree that the questions put by the insurer and the answers given by the insured shall become a warranty. This, as experience has shown, is a simpler way of effecting a policy of insurance. When this is done a misrepresentation constitutes a breach of warranty and the contract becomes void.

The modern policy provides that it shall be void if the insured "now has or shall hereafter make or procure any other contract of insurance, whether valid or not, on property covered in whole or in part by this policy." If the insured effects other insurance he must not forget to obtain consent of the insurer, and should he forget his good intention will not preserve his policy. Nor can the insured protect himself by canceling the prior policy if he breaks the condition. Nor does its expiration revive the subsequent policy. An overstatement of existing insurance under an express warranty will also violate the policy. While forgetfulness or good intention will not save the insured in such cases, insurance obtained by a third person without the knowledge of the insured on the same property will not endanger his rights under his policy.