Law and upon the theories of Jurisprudence, the subject cannot contract. Statutes Merchant and Staple share the characteristics of judgments. We may therefore dismiss these obligations altogether from our consideration.

2. Contract under Seal.

under Seal.

The only true Formal Contract of English law is the Contract Contract under Seal, sometimes also called a Deed and sometimes a Specialty. It is the only true Formal Contract, because it derives its validity from its Form alone, and not from the fact of agreement, nor from the consideration which Ante, p. 25. may exist for the promise of either party. It will be convenient in dealing with the Contract under Seal to consider (1) how it is made; (2) what are its chief characteristics as distinguished from simple contracts; (3) under what circumstances it is necessary to contract under seal.

(1) How a Contract under Seal is made.

Touchstone,

Signed.

A deed must be in writing or printed on paper or Sheppard, parchment. It is often said to be executed, or made con- 53clusive as between the parties, by being 'signed, sealed, and delivered.' Of these three the signature is a matter as to the necessity of which there is some doubt, though no one, Cooch v. unless ambitious of giving his name to a leading case, would 2 Q. B. 597. omit to sign a deed. But that which identifies a party to

Goodman,

a deed with the execution of it is the presence of his seal; Sealed. that which makes the deed operative, so far as he is concerned, is the fact of its delivery by him. Delivery is effected Delivered. either by actually handing the deed to the other party to it, or to a stranger for his benefit, or by words indicating an intention that the deed should become operative though it is retained in the possession of the party executing. In the Xenos v. execution of a deed under ordinary circumstances, seals are L. R. 2 H. L. affixed beforehand, and the party executing the deed signs his name, places his finger on the seal intended for him, and

Wickham,

296.

Escrow.

Shepp.

Touch. 59.

utters the words 'I deliver this as my act and deed.' Thus he at once identifies himself with the seal, and indicates his intention to deliver, that is, to give operation to the deed.

A deed may be delivered subject to a condition; it then does not take effect until the condition is performed: during this period it is termed an escrow, but immediately upon the fulfilment of the condition it becomes operative and acquires the character of a deed. There is an old rule that a deed, thus conditionally delivered, must not be delivered to one who is a party to it, else it takes effect at once, on the ground that a delivery in fact outweighs verbal conditions. But the 5 Bing. 387. modern cases appear to show that this technical rule will not be adhered to, if the intention of the parties is clear that the deed should be delivered conditionally.

Hudson v.

Revett,

Indenture and deed

poll.

(a) Estoppel.

The distinction between a Deed Poll and an Indenture is no longer important since 8 and 9 Vict. c. 106. s. 5. Formerly a deed made by one party had a polled or smooth-cut edge, a deed made between two or more parties was copied for each on the same parchment, and the copies cut apart with indented edges, so as to enable them to be identified by fitting the parts together. Such deeds were called Indentures. The statute above mentioned provides that an indented edge shall not be necessary to give the effect of an Indenture to a deed purporting to be such.

(2) Characteristics of Contract under Seal.

(a) Statements made in a simple contract, though strong evidence against the parties to the contract, are not absolutely conclusive against them. Statements made in a deed are absolutely conclusive against the parties to the deed in any legal proceedings between them taken upon the deed. Per Taunton, 'The principle is that where a man has entered into a solemn env. Taylor, gagement by and under his hand and seal as to certain facts, he shall not be permitted to deny any matter he has so asserted.' Such a prohibition to deny facts is termed an estoppel.

J.,in Bowman

2 A. & E. 278.

(b) Where two parties have made a simple contract for (b) Merger. any purpose, and afterwards have entered into an identical engagement by deed, the simple contract is merged in the deed and becomes extinct. This extinction of a lesser in a higher security, like the extinction of a lesser in a greater interest in lands, is called merger.

(c) A right of action arising out of simple contract is (c) Limitabarred if not exercised within six years.

A right of action arising out of a contract under seal is barred if not exercised within twenty years.

tion of actions.

These general statements must be taken with some quali- See Part V. fications to be discussed hereafter.

ch. iii. § 4.

(d) Remedies have been and are possessed by the creditor (d) Remedies against by deed against the estate of the debtor, which are not debtor's possessed by the creditor of a simple contract debt, and estate. which mark the importance attached to the Formal contract. In administering the personal estate of a testator or intestate person, creditors by specialty were entitled to a priority over creditors by simple contract. Their privilege in this respect is taken away by 32 & 33 Vict. c. 46.

As regards the real estate of a debtor, the creditor by specialty was also preferred. If the debtor bound himself and his heirs by deed, the Common Law gave to the creditor a right to have his debt satisfied by the heir out of the lands of his ancestor; the liability thus imposed on the heir was extended to the devisee by 3 & 4 Will. & Mary, c. 14. s. 2. This statute was repealed by 11 Geo. IV. & 1 Will. IV. c. 47, only for the purpose of extending the creditor's remedy to some cases not provided for by the previous Act. During the present century, however, creditors by simple contract have also acquired a right to have their debts satisfied out of the lands of the debtor; but it should be noted that the creditor by specialty can claim against heir or devisee of real estate without the intervention of the Court of Chancery, the creditor by simple contract must get the estate administered in Chancery in order to make

(e) Gratuit

under seal

good his claim. When the estate is so administered the creditor by specialty has, since 32 & 33 Vict. c. 46, no priority over the simple contract creditor, whether it be realty or whether it be personalty that is administered by the Court.

(e) A gratuitous promise, or promise for which the proous promise misor obtains no consideration present or future, is binding is binding. if made under seal, is absolutely void if made verbally, or in writing not under seal. It has already been mentioned that this characteristic of contracts under seal is often accounted for on the ground that their solemnity imports consideration, and that this supposition is historically untrue, inasmuch as it is the Form alone which gives effect to the deed. The doctrine of Consideration is, as we have seen, of a much later date than that at which the Contract under Seal was in full efficacy, an efficacy which it owed entirely to its Form. And the doctrine of Consideration, as it has developed, has steadily tended to limit the peculiarity of the Contract under Seal with which we are now dealing, and to introduce exceptions to the general rule that a gratuitous promise made by deed is binding.

Mallan v. May, 11 M. & W.665.

Even at Common Law, in the case of contracts made in restraint of trade, consideration is necessary, though the contract be under seal. This instance is exceptional, but the rule is general that if there be a consideration for a deed, it is open to the party sued upon such a contract to show that the consideration was illegal, or immoral, in which case 1 Sm. L. C. the deed will be void. p. 369.

Collins v.
Blantern,

But it is in the Court of Chancery that we find this privilege most encroached upon. The idea of Consideration as a necessary element of Contract as well as of Conveyance, if it did not actually originate in the Chancery, has always met with peculiar favour there. It was by the weight given Equitable to the presence of Consideration, or by inferences drawn from absence of its absence, that the Covenant to stand seised, the Bargain and Sale of lands, and the Resulting Use first acquired

view of

considera

tion.

validity. And in the department of Contract, Equity has developed similar principles.

ch. iii. § 3.

It would not extend its peculiar remedy of specific perform- See Part V. ance to gratuitous promises, even though they were under seal. It was prepared to exercise its peculiar power of declaring a contract void if absence of Consideration combined with other evidence amounted to proof that Fraud or Undue Influence had been brought to bear upon the promisor.

Specific performance of a gratuitous promise, where that remedy is applicable, is not granted, whether the promise is or is not made by deed. And absence of Consideration is corroborative evidence of the presence of Fraud or Undue Influence, sufficient proof of which will avoid the deed.

The best illustration of a gratuitous promise under seal Bonds. is supplied by a Bond. A Bond may be technically described as a promise defeasible upon condition subsequent; that is to say, it is a promise by A to pay a sum of money, which promise is liable to be defeated by a performance by A of a condition stated in the bond. The promise, in fact, imposes a penalty for the non-performance of the condition which is the real object of the bond. The condition desired to be secured may be the payment of a sum of money or the doing or forbearing from some act. In the first case the instrument is called a common money bond: in the second a bond with special conditions.

A promises X that on the ensuing Christmas Day he will pay to X 500; with a condition that if before that day. he has paid to X £250 the bond is to be void.

A promises X that on the ensuing Christmas Day he will pay to X £500; with a condition that if before that day M has faithfully performed certain duties the bond is to be void.

Common law has differed from Equity in its treatment of Legal bonds much as it did in its treatment of mortgages.

aspect of a bond.

Common law took the Contract in its literal sense and Equitable