Tender. Appropriation of The tender of a money debt must be in the current coin of the realm, or that which the law regards as equivalent to it. Gold is good to any amount; but silver is not beyond 40s., nor copper beyond a shilling. A Bank of England note, payable to bearer, is a legal tender for all sums above £5 (1). In order that the tender should be good, there must be actual production of the money, or the creditor must dispense with it. This may be done either expressly or it may be implied from conduct. Thus in a case where a man called on his creditor, and said he had eight guineas in his pocket, which he had brought for the purpose of satisfying his demand, and the creditor told him that he need not trouble himself to offer it, as he would not take it, the matter being in the hands of his attorney, the Court considered that there was a sufficient tender (2). A tender to be valid must be unconditional, and accordingly, where an offer was made to pay a sum of money if the other party would give a stamped receipt, it was held to be bad (3). A tender made under protest is likewise bad. A tender must be of the whole amount due; but, if the alleged debt consists of a variety of items, there may be a good tender as to one or some of them, if the item for which the tender is made be clearly indicated. The exact sum must be tendered. The person to whom the payments. money is payable must not be required to give any change (*). The important rule of law with regard to appropriation of payments may here be noticed. The principle is that, when money is paid, it is to be applied according to the expressed will of the payer, not of the receiver (solutio accipitur in modo solventis). A debtor who owes several debts, and makes a payment, has accordingly a right to appropriate that payment to any debt he pleases. If, however, at the time of payment the debtor does not expressly or impliedly appropriate the payment to any debt, the creditor may appropriate it to any debt he pleases, even though it be a statute-barred debt, though here it has not the effect of reviving the debt. Where neither debtor nor creditor appropriates the payment, the law appropriates in order of time (5). () 3 & 4 Will. 4, c. 98, s. 6; 33 Vict. c. 10. (2) Douglas v. Patrick, 3 T. R. 683. (3) Cole v. Blake, Peake, 238; Laing v. Meader, 1 C. & P. 257, but see Richardson v. Jackson, 8 M. & W. 928. (4) See the very numerous cases on tender collected: Chitty on Con tracts, 12th ed. p. 787, et seq. (5) See as to appropriation of payments: Clayton's Case, Mer. 605; Mills v. Fowkes, 5 Bing. (N.C.) 455; Nash v. Hodgson, Kay, 650; Thompson v. Hudson, L. R. 6 Ch. 328; Re Hallett's Estate, 13 Ch. D. 512; The London and County Banking Co., Limited v. Ratcliffe, 6 App. Cas. 722; 3. A contract is also said to be discharged by breach or default Breach. of performance, that is, the contract itself is converted into a claim for damages or a claim to have the contract performed "with such equitable qualification as may be necessitated by the default" (1). The claim or right of action so arising can then no longer be satisfied or discharged by performance or tender unless the aggrieved party consents to accept satisfaction in this way. 4. Impossibility of performance is in general no answer to an Impossiaction for damages for non-performance. If the thing to be bility. done is notoriously physically impossible, and was known to be so by both parties, at the time of making the contract, the contract is void, unless the promissor has taken it upon himself to warrant that it is possible. If the thing to be done was possible at the time of making the contract, but has become impossible since, the promissor is liable to an action for damages for nonperformance if he has expressly or impliedly undertaken and without any qualification to do it (2). 5. The acceptance of a security that in the eye of the law is By operahigher, instead of a lower, merges or extinguishes the lower. tion of law. Thus, as we have already seen, a judgment recovered in an action extinguishes the right on which the action was grounded. Again, if two parties to a simple contract enter into a contract under seal in reference to the same subject-matter, the simple contract is discharged. "The general principle is clear," said Baron Rolfe in Middleditch v. Ellis (3) "that where a debt is secured by a bond, covenant, or other specialty, there the obligation by simple contract is gone. The lesser security is merged in the greater." The policy of the law, said Mr. Justice Maule, is, that there shall not be two subsisting remedies, one upon the covenant and another upon the simple contract by the same person against the same person for the same demand. The conditions necessary to merge a lower in a higher security are that the two securities should be coextensive, i.e. that they should be for the same identical debt, and between the same parties, e.g. a joint bond given by a principal and surety will not merge the original debt of the principal (4). Novation. 6. A contract is also discharged by the operation of the Statutes of Limitation. Actions in respect of specialties must be brought within twenty years from the accruing of the cause of action (1). Actions in respect of simple contract debts within six years (2). The rights of persons under disability, infants, lunatics, are saved until the disability is removed, and when the debtor is beyond seas the creditor has six years after his return. A debt may be taken out of the statute by acknowledgment, which must be in writing and signed by the party himself or by his agent lawfully authorized (3). 7. Again, a contract is discharged by "novation." The term "novation" is derived from the civil law, and its meaning was defined in the House of Lords as follows: "There being a contract in existence, some new contract is substituted for it, either between the same parties, or between different parties; the consideration mutually being the discharge of the old contract" (*). The common instance of novation is in the case of dissolution of a partnership (post, p. 623), where a creditor agrees to accept the liability of the new firm in lieu of that of the old. Contracts, with the exception of those in which personal skill or taste is required, are not discharged by death (5). The discharge of the contract of suretyship will be considered hereafter (post, p. 682). In a case which came before the Court in 1890 it was decided that (6) a party to a contract made and to be performed in England is not discharged from his liability in respect of such a contract by a discharge in bankruptcy or liquidation under the law of a foreign country in which he his domiciled. (1) See as to money charged on land, &c., and mortgage debts, ante, pp. 205, 206. (2) See, as to condition precedent of cause of action, Atkinson v. The Bradford Third Equitable Benefit Building Society, 25 Q. B. D. 377. (3) Chitty on Contracts, 12th ed. p. 759, et seq. (*) Per Lord Selborne in Scarf v. Jardine, 7 App. Cas. 345. See as to novation in respect of the contract of insurance (ante, p. 276); and see, as to the Roman law in respect to novation, Justin. Inst., Lit. III. Tit. xxix. 3. (5) Chitty on Contracts, 12th ed., p. 150. (*) Antony Gibbs & Sons v. La Société Industrielle et Commerciale des Metaux, 25 Q. B. D. 399. CHAPTER IX. STOPPAGE IN TRANSITU AND LIEN. in transitu. It is obvious that there are many cases in which it would be Stoppage greatly to the disadvantage of a person who has sold goods, but has not been paid for them, to allow them to pass into the possession of an insolvent purchaser and then have recourse to an action for damages. In such a case the law mercantile has conferred upon the vendor a right, as it is called, of stoppage in transitu, which may be defined as the right of the unpaid vendor when the purchaser has become insolvent to stop the goods while in transitu, although the property in such goods might have passed to the purchaser. When the goods have not been delivered to the purchaser or to any agent of his to hold for him, otherwise than as a carrier, but are still in the hands of the carrier as such and for the purpose of the transit, then, although such carrier is the purchaser's agent to accept delivery so as to pass the property, nevertheless the goods are in transitu, and may be stopped. The doctrine of stoppage in transitu has always been construed favourably to the unpaid vendor (1). The great leading case on the doctrine of stoppage in transitu is Lickbarrow v. Mason (2), decided nearly a century ago, which established two most important propositions: 1st, the right of the unpaid vendor, in case of the purchaser's insolvency, to stop the goods sold while yet in transitu; 2nd, that this right of stoppage in transitu may be defeated by negotiating the bill of lading with a bona fide indorsee. The reason on which the rule is based is well stated in Smith's Leading Cases. The right of a vendor to stop in transitu is bestowed upon him in order to prevent the injustice which would take place, if, in consequence of the vendee's insolvency, while the price of the goods was yet unpaid, they were to be seized upon in satisfaction of his liabilities, and so (1) Bethell v. Clark, 20 Q. B. D. 617, 620. (2) Reported 2 T. R. 63; 1 H. Bl. 357; 6 East, 21; and see Smith's Stoppage in transitu. When does end. the property of one man were to be disposed of in payment of the debts of another. The power to defeat the right of stoppage in transitu has been extended by the Factors Act, 1889, which provides that where a document of title to goods has been lawfully transferred to a person as a buyer or owner of the goods, and that person transfers the document to a person who takes the document in good faith and for valuable consideration, the last-mentioned transfer shall have the same effect for defeating any vendor's lien or right of stoppage in transitu as a transfer of a bill of lading has for defeating the right of stoppage in transitu (1). The doctrine of stoppage in transitu was much considered in a case which came before the Court of Appeal in 1888, to which we have previously alluded (2). Goods had been purchased by merchants in London of manufacturers in Wolverhampton. The order for the goods did not specify any place to which they were to be sent, but subsequently the purchasers wrote to the vendors asking them to consign the goods by the Darling Downs to Melbourne, loading in the East India Docks. The goods were delivered by the vendors to a railway company to be forwarded to the ship. The vendors were afterwards informed of the purchasers' insolvency, and gave notice to the railway company to stop the goods, but too late to prevent their shipment on board the Darling Downs. The ship then sailed for Melbourne with the goods on board; but, before she arrived there, the vendors wrote to the shipowners claiming the goods as their property. The Court of Appeal decided, affirming the judgment of the Queen's Bench Division, that the transitus was not at an end, and therefore that the vendors' right to stop them in transitu continued. The principles on which the Court proceeded were stated as the transit follows:-" If the goods have so far reached the end of their journey that they wait for new orders from the purchasers to put them again in motion, to communicate to them another substantive destination, and that without such orders they would remain stationary, the transitus is at an end. But where a place is fixed by the directions given by the buyer to the seller as the ultimate destination of the goods, and à fortiori if there is an express stipulation as to their destination in the contract of sale, the transit is not at an end until the goods reach that place." (1) 52 & 53 Vict. c. 45, s. 10, repealing, but to a great extent re-enacting, part of 40 & 41 Vict. c. 39. (2) Bethell v. Clark, 20 Q. B. D. 617, 620, citing with approval Dixon v. Baldwen, 5 East, 175. |