3. Cases of executory gift which the courts torture into cases of contract in order to enforce the gift. 4. Parol gifts of land where the donee takes possession and acts upon the gift. 5. Defective conveyances to a creditor by way of security, to a wife by way of settlement, or to a child by way of advancement, where there was no legal duty but on the basis of the moral duty equity gives reformation under circumstances amounting to specific performance of the promise; and 6. Options under seal. § 218. Statutes changing the common law of sealed instruments. In many States the distinction between sealed and unsealed written contracts is in terms abolished. This is true in Alaska,78 Arizona,79 Arkansas,80 California,81 Idaho,82 Indiana,83 Iowa,84 Kansas,85 Kentucky, Minnesota,87 Mississippi,88 Missouri,89 Montana,90 Nebraska, Nevada,92 North Dakota,93 Ohio,94 Oklahoma,95 South Dakota, Tennessee, Texas, 98 Washington.99 97 In most of these States it is also enacted that any written contract shall be presumed to have been made for sufficient consideration. Whether if lack of consideration is affirmatively proved the agreement is invalid is often left subject to doubt. 78 Code Civ. Proc., § 1041. But if a seal is used it still has its commonlaw effect. 79 Civ. Code (1913), § 5564. 80 Const. of 1868, Kirby & Castle's Dig. (1916), p. 180. 81 Code Civ. Proc., § 1932. 82 Rev. Code (1908), § 3319. 83 Burns' Ann. St. (1914), § 466. 88 Code (1917), § 7419. 93 Comp. Laws (1913), § 5894. 94 Annot. Gen. Code (1912), § 32. 95 Rev. Laws (1910), § 944. 96 Comp. Laws (1913), Civ. Code, § 1243. Shannon's Code (1917), § 3212. 98 McEachin's Civ. Stat. (1913), Art. 7092. 99 Remington's Code (1915), § 8751. Though the statute provides that the addition of a private seal to a contract "shall not affect its validity or legality in any respect," the Supreme Court, without citing the statute, says that a seal prima facie imports consideration. Considine v. Gallagher, 31 Wash. 669, 72 Pac. 469; Gates v. Her 12 Wash. 131, 172 Pac. 912. 2 8 3 4 5 Arizona,1 California, Idaho, Iowa, Kentucky, Mississippi," Missouri, Montana, North Dakota, South Dakota, 10 Tennessee, 11 Texas 12 have such provisions. In other States it is enacted only that sealed contracts shall be presumed in the absence of contrary evidence to have been made for sufficient consideration, and in such States sealed contracts differ from ordinary written contracts to this extent. This is the law in Alabama,13 Michigan,14 New Jersey, 15 New York, 16 Oregon, 17 Wisconsin. 18 In Illinois under a statute of different form a similar result has been reached. 19 Some differences of construction of these Statutes may be noted. In New Jersey it has been held that a covenant which was and was intended to be voluntary is binding. the word "presumed" in the Statute being construed as meaning conclusively presumed. 20 But it may be doubted if this construction would generally be followed. It is rather to be supposed that where a Statute states that a sealed instrument is presumed to have sufficient consideration, the presumption intended to be created is disputable.21 The New 1 Civ. Code (1913), § 5564. 2 Civ. Code, § 1963 (39); Vickrey v. Maier, 164 Cal. 384, 774, 129 Pac. 273, 276; In re Thomson's Estate, 165 Cal. 290, 131 Pac. 1045; Anderson v. Wickliffe, (Cal. 1918), 172 Pac. 381; Patterson v. Chapman, (Cal. 1918), 176 Pac. 37, 2 A. L. R. 1467. Rev. Stat. (1908), § 3314. • Code (1897), § 3069; Gould v. Gunn, 161 Ia. 155, 140 N. W. 380; Mahaska County State Bank v. Brown, 159 Ia. 577, 141 N. W. 459. 5 Ky. Stat. (1915), § 471. Code (1917), §§ 7419-7421. 7 Rev. Stat. (1909), § 2774 (only promises to pay money). Rev. Code (1907), § 5023. 11 Shannon's Code (1917), § 3214. Art. 7093; Panhandle &c. Ry. v. Fitts (Tex. Civ. App.), 188 S. W. 528. 13 Code (1907), § 5324. 14 Comp. Laws (1916), § 12534. 17 Lord's Oreg. Laws (1910), § 513. 19 Bullen v. Morrison, 98 Ill. App. 669; Bartholomæ Brewing Co. V. Motycka, 163 Ill. App. 238; Pabst Brewing Co. v. LePage, 186 Ill. App. 468. See also Cortelyou v. Barnsdall, 236 Ill. 138, 86 N. E. 200; cf. Chicago &c. Mfg. Co. v. Haven, 195 Ill. 474, 63 N. E. 158. 20 Aller v. Aller, 40 N. J. L. 446; Braden v. Ward, 42 N. J. L. 518; Waln v. Waln, 58 N. J. L. 640, 34 Atl. 1068. 21 Gardner v. Watson, 170 Cal. 570, 150 Pac. 994; Danby v. Beebe, 147 Mich. 312, 110 N. W. 1066; Axe v?Tol York Statute applies to executory contracts only; therefore a voluntary release, 22 or assignment of a chose in action, 23 under seal is valid. In Idaho, 24 New Mexico, 25 and Wyoming, 26 while seals are abolished, unsealed written contracts are clearly given the effect which sealed contracts had at common law, so far as concerns their validity without consideration. § 219. The desirability of such statutes. It is most unfortunate if no method be left in a system of law by which a confessedly voluntary promise may be binding. The seal at common law furnished such a means. It may be said that this means was arbitrary and artificial; but, nevertheless, it fulfilled the purpose, though sealed instruments were also subject to technical rules in regard to their execution by agents, 27 and their modification or discharge by parol,28 which often worked injustice. To abolish altogether the common-law effect of the seal without substituting something in its place is a serious mistake. Such undesirable attributes as the common law attached to sealed instruments might well be abolished, but the rule that they need no consideration should not be. It is probable that the commonlaw rule is better even than the statutory extension to all written instruments, of the principle that no consideration is necessary.29 If such statutes are construed as merely making a written promise prima facie evidence that consideration for it existed, they are of little value, since when a promise is without consideration it is ordinarily easy to show that fact. If, on the other hand, they are construed as establishing that there is a "conclusive presumption" of consideration for all written contracts or if they expressly state consideration bert, 179 Mich. 556, 146 N. W. 418; In re McLaughlin's Est., 182 Mich. 707, 715, 716, 151 N. W. 745. 22 Homans v. Tyng, 56 N. Y. App. Div. 383, 67 N. Y. S. 792; Finch v. Simon, 61 N. Y. App. Div. 139, 70 N. Y. S. 361. In Alabama, California, North Dakota, Oregon, South Dakota and Tennessee the express terms of their statutes give effect to an unsealed release. See infra, § 418. 23 Hull v. Hull, 172 N. Y. App. Div. 287, 158 N. Y. S. 743. 24 Rev. Stat. (1908), § 3314. 25 Ann. Code (1915), §§ 2181-2182. 26 Comp. Stat. (1910), §§ 3641, 3642. 27 See infra, §§ 275, 296. 28 See infra, §§ 1834-1836, 1849. 29 See Statutes referred to, supra, § 218, and First National Bank v. Home Ins. Co., 16 N. Mex. 66, 113 Pac. 815. for them is unnecessary, it may be doubted whether the solution is wholly satisfactory. What is a "written contract?" Is an informal letter accepting an offer in another letter? Is an informal letter accepting an offer made orally? Is a letter containing a gratuitous promise? In any event the requisite of a written promise as distinguished from an oral promise is a technical formality as much as the requirement of a seal. Moreover, if formal writings only are to be within the protection of the Statute the distinction between such writings and informal ones will be often hard to draw (much more so than between sealed and unsealed writings). On the other hand, if all written promises are to be protected, the rule goes too far. A writing may be of a very informal character, and to make every gratuitous promise in a letter or memorandum as binding as a sealed covenant was at common law seems extreme.30 § 220. Recognizances. Recognizances are in form like bonds, containing an acknowledgment of indebtedness subject to a condition upon which the obligation will become void. They are not executed by signing and sealing by the obligor, but by the certification of the judicial officer before whom they are taken. A recognizance, therefore, partakes of the nature of a judgment or of indisputable evidence of indebtedness; but being voluntarily entered into by the obligor and implying in fact an undertaking to perform the condition, it may be classed as a contract. At the present time where recognizances are in use, they are often required to be signed, but as all matters in connection with entering into recognizances depend upon local statutes and practice which are well understood where they are in force, further treatment of the subject is unneces sary. § 221. Negotiable instruments. Though negotiable instruments are ordinarily classed as simple contracts and undoubtedly partake to some extent 30 A contrary argument is ably presented by Professor Edward H. Decker, in the Illinois Law Bulletin for February, 1918, p. 166. of the nature of simple contracts, yet they are also formal contracts. It is necessary in order to constitute a negotiable instrument that a writing shall contain an unconditional order or promise. It must be payable in money, must contain no independent order or agreement, must be certain as to parties, as to time of payment, and as to the amount payable, and, finally, it must be payable to order or to bearer.31 At common law it was necessary that it should be unsealed, but by the Uniform Negotiable Instruments Law, which has been enacted in most of the United States, negotiability is not destroyed by the addition of a seal.32 The points of resemblance in a negotiable instrument to a formal contract, as distinguished from a simple contract, may be thus enumerated. 33 (1) None but parties to a bill can be parties to an action thereon, whereas in simple contracts the law of undisclosed principal is applicable.33 (2) A bill is treated as a speciality in pleading, that is, the instrument itself is set out and sued upon without statement of the consideration for the instrument or the circumstances out of which it arose. (3) A negotiable instrument merges an antecedent obligation for which it is given. It is true that the antecedent obligation will not infrequently be revived if the negotiable instrument is dishonored at maturity, but until maturity the old obligation is merged and in many cases the merger is final and complete, the instrument being taken in full and unconditional satisfaction of the antecedent obligation.34 (4) The law of mutual assent as applied in simple contracts is to a considerable extent inapplicable to negotiable instruments, since a negotiable instrument takes effect upon delivery and may be binding though the maker dies before the payee becomes aware of the existence of the instrument.35 (5) The secondary obligations on negotiable instruments, 31 See Uniform Negotiable Instruments Law, Sec. 1-6, infra, §§ 11361138. 32 Negotiable Instruments Law, Sec. 6, infra, § 1138. 33 The enumeration is in the main adopted from 2 Ames' Cas. Bills and Notes, 873. 33a Infra, § 298. 34 Infra, §§ 1922-1924. 35 Dean v. Carruth, 108 Mass. 242; Worth v. Case, 42 N. Y. 362. |