Part II — Chapter I: On Contracts in General

611. A contract is nothing other than one of the modes of acquiring various rights: first indeed man occupies things of no one; afterward by labor he produces new things which he legitimately makes his own; but since he cannot by his own art make all things which are necessary or useful to him, he strives to procure the same from others, namely by exchange, sale, lease, in one word, by pacts or contracts.

The origin of contracts, therefore, must be sought from the very social nature of man; for since man was born for society, by that very fact he tends not only to living, but also to making pacts with other mortals: namely, his powers are very limited and he soon understands that he cannot at the same time devote labor to agriculture, pastoral life, and various mechanical arts; indeed, even if he could, this would not be expedient; for by devoting himself to one art only, he becomes more skilled in the same, and produces far more things and more perfect things: by division of labor, as they say, manufactured things increase immensely. But if a thing of one and the same genus only is made, he will have more than are necessary to him; moreover he needs many things which by his own labor he cannot acquire for himself; therefore it is necessary that by making pacts with others he obtain them.¹

¹ F. Bastiat lucidly explained this origin of contracts and social utility, Harmonies Economiques, Paris, 1851, p. 74-113; cf. Ahrens, Cours de Droit naturel, Leipzig, 1875, t. II, § 81-82.

612. For completing this matter, first indeed we shall discuss contracts in general, namely by setting forth those things which are common to all; afterward the principal contracts in particular, but not individual ones; for when the moral principles concerning the principal pacts have been elucidated, it is not necessary to go through individual cases minutely; but it suffices that, when the occasion is given, when a difficulty occurs, recourse be made to the civil Codes of various Nations, which for the most part solve the matter according to the norms of equity, and also to jurists, to whom it is known how laws of this kind are authentically explained by magistrates.

Preliminary notes:

• On the general concept of contracts.
• On the force of legal nullities in conscience.

Chapter I. On Contracts in General:

• On consent:
  • on its qualities;
  • on defects harmful to consent.
• On the matter of a contract.
• On the subject of a contract, or on those contracting.
• On the effects of contracts.

Chapter II. On Contracts in Particular:

• On gratuitous contracts:
  • on promise;
  • on donation;
  • on testaments;
  • on successions.
• On onerous contracts of certain event:
  • on buying and selling;
  • on lease;
  • on the hiring of services, or on the contract of labor;
  • on loan;
  • on the contract of partnership.
• On onerous aleatory contracts:
  • on insurance;
  • on gambling;
  • on stock-exchange speculations.

We shall speak: 1. of the general concept of contracts; 2. of the force of legal nullities in conscience.

¹ Lugo, disp. XXII, n. 1-35; Salmanticenses, Tr. XIV, de Contractibus, cap. 1, n. 1-7; Haunoldus, de Justitia et Jure privatorum, Ingolstadt, 1672, Tr. VIII, cap. 1; Beusch, de Pactis et Contractibus, in Migne, Curs. Theol., XVI, cap. I, n. 1-7; cap. II; Carriere, De Contractibus, n. 2-16; 86-172; Marres, lib. III, n. 1-6.

613. 1. Definition. A contract can be defined as an agreement between two or more persons, by which some right is transferred and a certain obligation is produced.

It is said (a) an agreement, that is, the consent of several persons in one and the same agreed thing: for at least two persons are required, so that a right may be transferred from one to another; moreover, unless the contracting parties consent to one and the same thing, the essential condition for the moral transfer of right will be lacking, namely handing over made by one and accepted by the other.

(b) By which a right is transferred and an obligation is produced; that right can be in a thing or to a thing; for each can be transferred; - but a right cannot be transferred unless by that very fact some obligation is undertaken, or bond of right by which someone is bound toward another to giving, doing, or omitting something.

Hence in a contract three essentials can be distinguished: - (a) consent of the parties concerning some right to be transferred; (b) the object about which consent can be concerned; (c) persons capable of contracting.

Besides, in a contract certain things are said to pertain to its nature, namely those which by law or custom are included in it, unless they are excluded by explicit agreement, e.g., insurance against eviction to be furnished by the seller to the buyer. But accidental things are said to be those which can be added to the contract, but are not judged added unless by a special pact, e.g., delay of payment beyond the time established by law or custom.

614. 2. Various species of contracts.¹ (A) By reason of effect, contracts are: (a) bilateral, or synallagmatic, when they beget an obligation in each contracting party, as are buying-selling, lease; (b) unilateral, which beget an obligation in only one of the contracting parties, such as promise, donation.

¹ Divisions of this kind are found in most civil Codes, but the formalities for a solemn contract are various among various Nations. - For France, cf. Cod. civ., a. 1102-1106; Planiol, II, n. 947-996, Supplement., p. 76*.

(B) By reason of cause, or motive: (a) some are gratuitous, when someone transfers a right to another gratis, that is, without his own emolument, as happens in donation; (b) but others are onerous, when each of the contracting parties receives something of advantage and something of burden, as in sale and lease; (c) finally others are called mixed, when they are partly gratuitous and partly onerous; e.g., if in a sale it is stipulated that only half of the price must be paid by the buyer, - or if a donation is made under an onerous condition, although light. - But, as is clear from the notion itself, mixed contracts are referred to onerous ones.

Every bilateral contract by that very fact is onerous, since it begets an obligation, and therefore a burden, in each contracting party; but there are given onerous contracts which are not perfectly bilateral: thus a loan in which an increase is stipulated is indeed onerous, because each contracting party feels a burden, the lender by alienating money for a time, and the borrower by obligating himself to return the thing with an increase; but it is not properly bilateral, because only the borrower undertakes an obligation.

615. (C) By reason of the thing to be furnished, onerous contracts are: (a) of certain event, or commutative, when the thing to be furnished is certain and at the same time determinate, e.g., if such a thing is sold here and now for such a price; (b) aleatory, or of uncertain event, when the thing to be furnished, or at least the quantity of the thing, depends upon a fortuitous event, as in gambling, insurance, speculations.

(D) By reason of the mode by which they are perfected, contracts are: (a) consensual, if they are perfected by consent alone; and these indeed are called simple, if they are contracted without a special formality; but solemn, if they cannot be contracted validly without certain formalities; (b) or real, which are perfected not by consent alone, but by handing over the thing, such as loan, pledge, deposit.

Likewise by reason of mode, contracts can be entered explicitly, by words, writings, or other signs expressly showing consent; or implicitly, or by tacit consent, or quasi-contract; when, e.g., the office of judge, pastor, is undertaken, by that very fact implicitly, and by force of quasi-contract, the obligation is undertaken of rightly fulfilling all offices attached to the same.

616. (E) Finally, besides named contracts, namely those which have their own name in law, - there are unnamed contracts which lack their own name, and are reduced to four species: (a) I give that you may give; (b) I give that you may do, or omit doing; (c) I do that you may do, or not do; (d) I do that you may give.

617. We presuppose, from the Treatise on Laws, that there is present in the civil power the faculty of making laws concerning merely civil contracts, and also of defining conditions for their validity. Now human law can touch contracts in seven ways:

¹ Laymann, lib. I, c. 16; Carriere, n. 88-172; Bouquillon, Theol. Fundament., n. 237-240; Van Gestel, De Justitia et Lege civili, Groningen, 1896, n. 63-87; Noldin, n. 346-347.

1. Sometimes it neither prohibits nor approves them, but only attributes no force to them in the external forum; thus, in many regions, contracts from gambling are not acknowledged by law, insofar as rights arising from them cannot be vindicated before judges; then there is no difficulty: the value of the act must be defined from natural law.

2. At other times, it prohibits certain acts, but acknowledges their validity if they in fact are done; thus often brokers (courtiers) are forbidden to conduct business for themselves in those things in which they exercise their function; then likewise there is no difficulty, since the act, although illicit, is held as valid by law.

618. 3. Sometimes it is decreed that contracts are not null of themselves, but only rescindable; thus, e.g., as regards many acts of minors; then contracts are to be held as valid as long as they have not been invalidated by a judge.

4. But sometimes contracts are declared null by the law itself, yet in such a way that from the context or purpose of the law it can be understood that the act is indeed invalid in the external forum, but remains naturally valid or valid in the forum of conscience; in which case, before the sentence of the judge, he whom the contract favors can hold it as valid and use it, since it retains its force in the forum of conscience; moreover those whose interest is concerned can, with a safe conscience, use their own right and demand the nullity of the contract; and after the sentence of the judge, each party must acquiesce in this: for the public good demands that legitimate sentences of tribunals have force in conscience. - Indeed, even before the intervention of the judge, if the contract is evidently null from civil law, and one party seeks the rescission of the contract, charity demands that the other party not stand in the way of this rescission, lest useless expenses of litigation be incurred.

619. 5. Finally, law can invalidate a contract not only civilly, but also naturally, or in the forum of conscience, even before the declaratory sentence of the judge, as often as the public good demands this. - Thus commonly.

Most admit that the civil power can make such laws: for just as the Church, in religious matters, can invalidate certain contracts even before the sentence of the judge, so likewise political power, in temporal matters, can invalidate contracts in the same way, even in the forum of conscience, as often as the public good demands this: for each power proceeds from God, and is supreme in its own genus, so that it can make laws which, before the sentence of the judge, oblige in conscience.¹

¹ This can be confirmed by a recent example; the Italian law of May 1, 1866 had established that creditors were bound to accept paper money (monnaie en papier) in payment, notwithstanding any contrary pact; now the Sacred Penitentiary, having been asked whether a law of this kind had force in the forum of conscience, on January 21, 1873, responded: "regularly in the affirmative, unless particular circumstances stand in the way." (Acta S. Sedis, t. VII, p. 211.)

But the whole difficulty is in defining which civil laws oblige thus. When the legislator has clearly declared this, there is no difficulty; but today legislators do not explicitly speak of the moral obligation of laws; hence the question must be solved from the purpose of the law, common interpretation, or custom; namely, if the public good demands that the law be held as invalidating even before the intervention of the judge, immediately it must be held as invalid in conscience; such would be, e.g., an agreement by which children would make a pact with parents about not giving support, or a contract concerning the furnishing of an illicit thing. - Otherwise, a contract can be held as naturally valid before the sentence of the judge; for an act valid by natural law ought not to be held as null, unless it is morally certain concerning its nullity.

6. Today by some jurists not only null and rescindable contracts are acknowledged, but also non-existent ones,¹ namely those which lack one of the elements absolutely necessary for validity, e.g., free consent; these are null, even in the forum of conscience, before the sentence of the judge. - Yet if the matter is doubtful, the declaratory sentence of the judge can be awaited.

¹ Planiol, I, n. 345.

7. Contracts entered into in fraud of the law are affected by that nullity which the violated law decrees, by reason of the public good.

Theologians and jurists teach with unanimous voice that consent is required for the essence of a contract; therefore we shall speak: 1. of the qualities with which it must be clothed; 2. of the defects which can harm it.

² Lugo, disp. XXII, n. 35-186; Salmant., cap. I, n. 8-22; Haunoldus, Tr. VIII, cap. 2; Billuart, diss. I, art. 2-4; St. Alphonsus, n. 709-710; 714-719; Beusch, cap. I, n. 18-92; Carriere, n. 19-80; Marres, l. III, n. 38-103; Noldin, n. 521-528; cf. Supplem. for France, p. 77*; Planiol, II, n. 1047-1076.

620. Principle. For the validity of a contract, consent by natural law must be: 1. internal and free; 2. external, or manifested by external signs; 3. mutual.

1. Internal and free, that is, not feigned, nor indeliberate or coerced, but furnished from the soul, with that advertence and liberty which are required for a truly human act, and with the intention of obligating oneself. For by a contract a right is transferred and a moral obligation is undertaken; but a right, since it is a moral power, cannot be transferred without a moral and free act; likewise a moral obligation cannot be undertaken without a truly human act, and therefore one internal and free.

Therefore consent uttered in jest, or merely presumed, or given on the condition that it can be withdrawn at pleasure, does not suffice for a contract; nor consent furnished by him who is actually drunk, hypnotized, or insane.

621. Corollaries. (A) He who consents fictitiously, although externally he seems seriously to utter words, in fact does not perfect a contract. But in the external forum, both civil and ecclesiastical, consent seriously given is deservedly presumed to be internal, until the contrary is morally certain.

(B) He who, coerced by no force, consented fictitiously, has unjustly inflicted damage upon another, and from justice is bound to repair it; but often the damage cannot be repaired except by furnishing true consent, and therefore by perfecting the contract.

(C) He who enters a pact with the intention of obligating himself, but with the mind of not fulfilling the obligation undertaken, validly contracts, undertakes a true obligation, and is bound to fulfill it; for for the essence of a contract the intention of undertaking an obligation suffices, which is included in the will of contracting. - Yet, if someone were to manifest the intention of not fulfilling the obligation, saying, e.g.: I promise you one hundred coins, which nevertheless I shall never give, such a mode of speaking could be held as a jest.

622. 2. External, that is, manifested by sensible signs; for since contracts are entered among men, who cannot understand the intimacies of the heart unless they are externally manifested, merely internal consent by no means suffices for the validity of a pact.

By natural law it is not required that consent be expressed by words, but any external sign suffices by which the mind of those making the pact is clearly understood. But often by civil law it is commanded that consent be manifested by words or writings, so that lawsuits may more easily be guarded against.

But silence, or taciturnity, generally is not held for consent unless from the circumstances it signifies assent. Now in gratuitous contracts, as in donation, silence can for the most part be held as acceptance; yet not so in French law (below, n. 681); for in favorable things, he who is silent seems to consent; but otherwise in onerous contracts, since no one is judged to undertake an obligation unless he manifests consent by some sign.

Hence, if publishers of newspapers, by sending papers to various persons, declare that the price of subscription is owed by those who do not send the newspapers back, silence cannot be held as consent, at least where civil law decrees nothing concerning this matter.

623. 3. Mutual, or furnished by each contracting party concerning the same object after the notification of at least one to the other. For there are at least two contracting parties, namely one who proposes, or offers, something, and the other who accepts; and therefore, if the consent of either party concerning one and the same thing is lacking, there will no longer be a contract. This indeed is clear where the question concerns a bilateral contract, since no one can obligate himself without some consent; and it holds also for a unilateral contract, because no one acquires a right unless he accepts the thing offered.

It is not required that each contracting party elicit or signify consent at the same time, but it suffices that the consent of one morally persevere when the other expresses his consent or at least manifests it to the other: for then both truly consent to the same agreed thing. Hence a contract between absent persons can be perfected through a procurator, letters, or by the help of telegraph or telephone.

624. Corollaries. (A) He who has offered some thing to another can by natural law recede from his promise as long as it has not been accepted by the other; for a mere offer does not bind unless after it has been accepted. - He can moreover determine the time within which the other must consent, saying, e.g., I offer you this horse for one thousand coins, if you consent within three days; then, if the other consents within this time, the contract has force; but if after the elapsed time, it does not have force, because the prior consent no longer virtually perseveres. - If no time has been fixed beforehand, the consent of the offerer given absolutely is judged to continue until it is revoked; but sometimes civil laws define something concerning this matter, which, as determinative of right, obliges in conscience.

(B) When a contract between absent persons is perfected, it is doubted whether it is entered at the time at which the accepting party expresses his consent, or only at that time at which this acceptance becomes known to the offerer.

(a) In gratuitous contracts, by natural law the contract is perfected as soon as acceptance is manifested by an external sign, even if it is not yet known to the offerer; for, in a favorable thing, silence itself is held as consent, and a fortiori positive acceptance, even if not yet notified. - Yet sometimes, by civil law, acceptance notified to the donor is required, as happens in France for solemn donation.

(b) In onerous contracts, the matter is controverted; some affirm that acceptance suffices, without its being notified to the other; for since the consent of the offerer perseveres, now there is the consent of two in the same agreed thing; - but others deny it, because as long as the offerer does not know the acceptance, he can revoke the consent previously given. Each opinion is probable; hence the matter must be defined by civil law or custom, which is not the same among various Nations.¹

¹ Thus, in France, jurists generally teach that a contract does not have force until after acceptance has become known to the offerer (Planiol, II, n. 986); the same prevails in Germany, from art. 130 of the Civil Code.

Certain defects can harm the validity of a contract, which impede consent from being perfectly free, and therefore render the contract either null or rescindable. There are three: error and fraud, by which the intellect is deceived; and force, or fear, by which the liberty of the will is injured.¹

¹ Those things which we explain here from natural law are accepted among most Nations; but as regards particulars they must be completed from the various Codes. - For France, cf. Cod. civ., a. 1109-1122, in Supplem., p. 77*; Planiol, II, n. 1047-1076.

625. 1. Notion and species. Error is a false judgment concerning some matter; speculatively indeed it differs from ignorance, which is the lack of knowledge; but practically and juridically error and ignorance produce the same effects. - It matters little whether the error is an error of law or an error of fact.

Error is substantial or accidental, according as it concerns the essence or the accessories of a contract. - In our matter, the essence or substance of a contract is that about which consent is principally borne.

Now error is held as substantial: (a) when it falls upon the very nature or species of the contract: e.g., if someone thinks the question concerns sale, while the question concerns lease; (b) when it falls upon the thing itself, e.g., Titius intends to sell such a white horse, while Caius wishes to buy another red horse; for then there is no consent concerning one and the same thing; (c) when it concerns a substantial quality, to which consent is attached, so that the consent would not have been furnished if it had been known that this quality was lacking; thus, e.g., he who buys a gilded chain as a gold one; he who procures new wine as old.

On the contrary, error is reputed accidental which concerns less principal qualities of the thing, to which the contracting parties do not attach their consent. - Yet it can happen that someone in fact, because of a special motive, attaches consent to an accidental quality; then it is called accidental error giving cause to the contract.

626. 2. Principles. (A) By natural law, substantial error renders a contract invalid. For he who errs concerning the substance of the thing, or the very nature of the contract, or a substantial quality to which he attaches consent, does not furnish true consent concerning the matter about which the contract is concerned.²

² By French law, error concerning a substantial quality makes a contract rescindable, but not null. Cf. Planiol, II, n. 1053.

627. (B) Accidental error of itself does not render a contract invalid; for, for the value of a contract, consent in the substance of the contract suffices; but this can consist with accidental error, which, as was said, does not fall upon the substance of the act, but only upon accessories.

I said: of itself; for it can happen that someone in fact attached his consent to some quality or accidental circumstance; then the error, although accidental, truly gives cause to the contract, and, in the internal forum, the consent is null. - But in the external forum, the contract is held as valid, unless from circumstances or explicit declaration this can be proved; for the security of commerce demands this; for if it were permitted to each one to rescind a contract by asserting, without any proof, that he had attached consent to such or such an accidental quality, scarcely any contract would exist whose validity was certain.

Hence if a priest buys blue cloth, thinking it to be black, for making a cassock, the purchase is null, because from the circumstances he attached his consent to the black color. But if someone, in buying a horse, erred about the color, without having manifested anything about his intention, the contract is valid, because from the circumstances one could not suspect that he wished to buy a horse of white color rather than red.

628. Corollaries. (A) Error concerning the person does not invalidate a contract, unless the consent of at least one of the contracting parties was attached to such a person, because of his special qualities or reasons; this is clear from what has already been said.

Thus if I buy a book from Victor, thinking him to be Jacob, the contract has force, because, as is supposed, the principal intention is to buy the book, by whomsoever it is sold; - but if I wished to have a painted picture from such a celebrated painter, error concerning the person invalidates the contract: in which case, however, the painter who in good faith began or completed the work must be furnished unharmed; - in gratuitous contracts, error concerning the person invalidates the donation, as often as this is made with regard to the person, so that someone wishes to give only to this person; otherwise, if the prevailing intention is to give something to the poor.

629. (B) Error concerning the extrinsic motive of the contract does not invalidate it, unless the pact was entered conditionally.

The matter is explained by example. Titius buys a horse, because he falsely thinks that his own horse has perished; but he is altogether silent about this motive: certainly the contract has force, because otherwise the security of commerce would perish; - he manifested the motive to the other contracting party, without however adding any condition to the purchase: more probably the contract has force, at least in the external forum, because a sufficient reason of paying the price subsists, namely the value of the horse; - but if he bought under the condition that the horse which he already has is dead, the contract is invalid, because the condition was not fulfilled.

630. 1. Notion. When the error of one contracting party is induced by the frauds or fallacies of another, fraud is present. Therefore here we suppose that fraud is joined with error; for if the contracting party detects the fallacy and nevertheless contracts, consent is not vitiated. - But fraud can be substantial or accidental, as was said concerning error.

631. 2. Principles. (A) Substantial fraud renders a contract null by natural law; for it destroys consent. Besides, the deceiver is bound to repair the damage unjustly inflicted upon the deceived, from what was said above, n. 466 sq.

(B) Accidental fraud giving cause to the contract, that is, truly moving the other to contract, by natural law makes the contract not invalid, but rescindable, at the option of the deceived person. For, on the one hand, accidental fraud does not remove consent; but on the other, it unjustly injures the freedom of making a pact, and therefore the deceiver must repair this injury; but this can be done in no more efficacious mode than by making for the deceived party the faculty of seeking the rescission of the contract and compensation of the damage inflicted from this.

(C) Accidental fraud which in fact does not have influence upon the contract does not stand in the way of its validity, because it neither removes consent nor efficaciously injures freedom.

632. 3. Corollary. If a contracting party has been deceived by a third person, without the cooperation of the other contracting party, the contract will indeed be null by natural law, if the error was substantial; otherwise, it will be valid; - but in either case, the damage inflicted upon the deceived person must be repaired by the deceiver, not by the innocent contracting party. The former is clear from what was said concerning error, n. 626; the latter, from what was said concerning the damager, n. 466.

633. 1. Notion and species. (A) Force, or violence, is sometimes physical and absolute, when someone, e.g., is physically compelled to sign a contract against his own will: then by natural law there is altogether no contract. - But more often force is only moral and is produced by threats; it is usually defined: a motion brought from an extrinsic principle against the inclination of the will. In this sense, it does not substantially differ from fear, which from Roman law is described as: trembling of mind on account of some impending evil; - namely force is as it were the cause of fear: for when moral violence urges, the mind begins to tremble, or to fear.

(B) Fear is grave or light, according as the trembling of mind disturbs the mind more or less; hence subjectively, and in the internal forum, the gravity of fear depends on the trembling of mind itself; but objectively, and in the external forum, its gravity depends on the gravity of the evil itself which threatens.

Hence fear can be absolutely and relatively grave: absolutely, when the evil which is feared is so grave, certain, and impending that it can disturb a steadfast man; - relatively grave, when the evil of itself does not suffice for moving a man, but in fact seriously disturbs the contracting party, account being had of that person's age, sex, or condition.

But fear is light when the evil which is feared is light, or indeed grave, but not certainly or immediately impending, so that it does not seriously move the mind.

634. 2. Principles. (A) Extreme fear, which altogether disturbs the use of reason, by natural law invalidates a contract, since it removes the freedom necessary for contracting.

635. (B) Fear, even grave, arising from a natural cause, or justly impressed, does not invalidate a contract, provided it does not impede the use of reason. For, even if the consent is not perfectly free, but given with some repugnance, nevertheless it is furnished voluntarily and prudently; moreover no injury is done to the contracting party; therefore the contract is neither invalid nor rescindable.

Thus the contract has force of him who, in a fire or shipwreck, seized by fear, offers to another a sum of money so that he may be snatched from danger, provided the promised price is proportioned to the work furnished; or of him who offends another, and, from fear of penalty, promises money lest the matter be brought to the judge.

636. (C) Grave fear, unjustly impressed for extorting consent, by natural law invalidates gratuitous contracts, - but makes onerous contracts rescindable, at the option of him who suffered the fear. (a) It invalidates gratuitous contracts; for for the value of a gratuitous contract altogether free consent is required, since the cause of this contract is the liberality of the giver; but grave fear, by which consent is unjustly extorted, destroys this perfect freedom. (b) It makes onerous contracts rescindable; for for the value of these pacts that freedom suffices which is required for undertaking a grave obligation; but such freedom can consist even with grave fear unjustly impressed; for although the mind is disturbed in some way, it can sufficiently apprehend the nature of the obligation which it undertakes, and freely embrace it. - Yet since injury is inflicted upon him who suffers grave fear, he can seek the reparation of damage by demanding the rescission of the contract.

We suppose in this case that consent was truly furnished; for if he upon whom fear is impressed furnishes only external assent, in order to avoid grave damage, the contract is null; thus, e.g., if a traveler promises money to a robber, in order to avoid death.

Besides, by positive law contracts entered with grave fear can be invalidated; thus by canon law religious profession, vows, or marriages entered from grave fear are invalidated.

637. (D) Grave fear unjustly impressed, not indeed for extorting consent, but for another end, makes a contract rescindable if it is impressed by the other contracting party, because this party is bound to repair the damage which he himself inflicted; thus if someone promised money to a calumniator so that he would abstain from defamation, he can rescind the contract. - But if grave fear of this kind was impressed by a third person, the contract is valid, because the contracting party himself inflicts no injury; thus if someone, attacked and terrified by a robber, promises money to a traveler coming by, so that he may be freed from this danger, he is bound to give the promised price.

638. (E) Light fear is not considered in the external forum; but in the internal forum it more probably invalidates gratuitous contracts, for which perfect liberty is required; and, according to some, makes onerous contracts rescindable when it truly was the cause why these were entered; but it by no means stands in the way of their validity if it did not give cause to them.

Consent, necessary for the value of a contract, must be concerned with some object; now the object of consent can be either a thing, or an action, or a passive submission, in which or to which a right can be acquired, in one word, whatever is the object of right or dominion.

¹ Lugo, disp. XXII, n. 304-309; Billuart, diss. I, art. 8-9; St. Alphonsus, n. 712-713; Beusch, cap. IV; Carriere, n. 209-244; Marres, lib. III, n. 135-150; Noldin, n. 515-517; Supplem. for France, p. 79*; Planiol, II, n. 997-1016.

639. Principle: In order that a contract be valid, the matter about which it is concerned must be: 1. possible and existing; 2. determinate; 3. proper to the contracting party; 4. licit and honorable.

1. Possible and existing. (A) Possible indeed; for no one can obligate himself to the impossible; hence if the thing is physically impossible, e.g., if someone promises to migrate to the moon, the contract is null; but if the thing is morally impossible, that is, very difficult, the contract has force, but no one is judged to wish to obligate himself unless he explicitly said this, e.g., if he expressly promised to climb a mountain whose ridge rises into a high peak. If the object of the contract is divisible, and partly possible, the contract has force as regards the possible part, because the useful ought not to be vitiated by the useless.

Sometimes the thing which was promised, from unforeseen circumstances, e.g., illness or wound, becomes impossible for the contracting party himself; nevertheless the contract of itself remains valid if the contracting party can furnish the same through another without grave inconvenience.

He who by his own fault brings it about that the matter of the contract becomes impossible (e.g., because he is guilty of negligence), is bound to repair the damage inflicted upon the other contracting party from this; otherwise, if he was culpable in no way, e.g., if without his fault there arises a general cessation from work (greve generale).

(B) Existing in reality or at least in hope; thus fruits of an orchard, not yet ripe, - crops, before they are white for harvest, can be sold; for even a right to a thing is something estimable by price; but if a thing exists neither in reality nor in hope, its dominion certainly cannot be transferred.

640. Corollary. Hence things which are not placed in commerce, nor estimable by price, cannot be the object of a contract.

Thus by natural law the following are outside commerce: things which cannot be occupied, such as air, the ocean, etc.; likewise those things which it is not licit to estimate by price, such as the votes of electors or judges.

By divine or ecclesiastical law certain sacred things cannot be sold, such as sacraments, sacred oils, indulgences.

Likewise by civil law certain things are prohibited from being bought and sold, e.g., those which pertain to public dominion, public offices and functions; concerning these the civil Codes can be consulted.

641. 2. Determinate or at least determinable; for no one can obligate himself to something altogether indefinite. Wherefore two things must be determined: the quality of the thing, at least as regards the species, and its quantity: but this sometimes is defined mathematically, e.g., if ten pounds of sugar are sold; sometimes morally, e.g., if someone for such a price promises to furnish the wheat necessary for the support of some family for an entire year.

642. 3. Proper to the contracting party; for no one can transfer to another a right which he himself in no way has; hence the donation or sale of a thing which a thief has unjustly taken away is invalid. - But if someone has a thing in hope, by natural law he can sell it; yet generally positive laws invalidate the sale of an inheritance which is expected from a person still surviving; and deservedly, lest either contracting party desire and procure the death of this person.

(a) Hence generally each one can promise something to be furnished by himself, but not by another. - Yet someone can contract with another concerning a thing to be furnished by some third party, insofar as he obligates himself to take care that the other give or do the thing concerning which the contract is made: if the latter refuses, he who obligated himself thus must furnish the other contracting party unharmed. Thus, in the partition of an inheritance, Charles can promise that his absent brother Augustus will ratify the same; and under this head he is bound to take care that Augustus assent to the partition.

(b) A stipulation can be made between two contracting parties in favor of a third person; thus Titius can promise to pay a certain sum of money each year to an insurance company, so that, at the time when he himself dies, twenty thousand coins may be given to his nephew.

643. Corollaries. (a) When something is already owed to another from strict justice, one cannot contract concerning the same; thus a judge cannot accept something for a just sentence which from office he is bound to pronounce; for he obligates himself to nothing new, nor therefore under this head can he accept a price.

(b) But if something is owed from charity alone, or another virtue, a contract concerning the furnishing of this thing is indeed illicit, but not invalid; e.g., a physician, who from charity ought to furnish his work gratis to some poor man, validly makes a pact with the same about receiving some reward.

644. 4. Honorable and licit: for no one can obligate himself to something evil, nor demand that an illicit thing be done.

(A) Wherefore if two entered a pact concerning an illicit thing, or under a base condition, - e.g., I give you one thousand coins that you may kill Titius, or if you kill Titius, it is certain that the contract is invalid before the evil work has been perpetrated; and therefore neither contracting party is bound to fulfill it, but each is bound to recede from it; indeed, if the price for the base action has already been paid, it must be restored.

645. (B) After the work has been perpetrated, it is controverted whether one contracting party is bound to pay the promised price, and the other can licitly demand and retain it. - All indeed acknowledge that the price must be paid when the thing which was promised is good in itself, although from an accidental circumstance it was illicit; e.g., if a reward was promised to one working servilely on Sunday. - But the question is whether the same must be said when the matter concerns a thing evil in itself.

646. (a) The first opinion teaches that the contract is void, even after the work has been perpetrated, and therefore that the price is not to be paid, nor, if paid, can it be retained.¹ For 1) the promised reward is not owed as the price of the illicit thing, since this is not estimable by price, but rather worthy of chastisement; nor by force of promise: for a contract invalid from the beginning cannot be strengthened by the passage of time; 2) moreover the public good demands that such a price cannot be exacted: for if after the crime has been perpetrated it can be exacted, but not before, the evildoer by that very fact is induced to perpetrate the crime immediately, lest he be deprived of the agreed reward. Hence generally civil laws prohibit the promised price from being paid, because deservedly it is judged to be nothing other than an incitement to crime.

¹ Comitolus, Resp. moral., l. III, q. 5; Carriere, n. 331-338, with many authors alleged there; Beusch, cap. IV, n. 272; Gousset, n. 753.

647. (b) The second opinion holds that, after the work has been perpetrated, the price can be exacted.² For 1) an illicit work, although by reason of fault and formally as a sin, is not estimable by price, nevertheless materially taken, insofar as it is an action useful or pleasant to one, but laborious and dangerous to another, can be estimated by price, and is worthy of reward. 2) Moreover the contract of which there is question is composed of two contracts, of which one is a promise concerning an evil thing (I promise you one thousand coins that you may kill Titius), but the other is concerning the paying of the price, if the evil work has been perpetrated (I give you one thousand for the killing of Titius); the former contract, as concerning an illicit thing, is invalid, but the latter has force, because it is not concerning an illicit thing, but concerning the paying of the price for a material work, which is estimable by price. 3) The Sacred Penitentiary seemed to confirm this opinion when it declared that a prostitute can retain the price of prostitution.³

² St. Thomas, 2. 2., q. 32, a. 7; q. 87, a. 2, ad 2; Lugo, de Justitia, disp. XVIII, n. 45-74; Billuart, diss. I, art. 8; St. Alphonsus, n. 712; Ball. P., n. 581-599; Noldin, 517, and others sufficiently commonly.

³ Sacred Penitentiary, April 23, 1822, in Carriere, n. 338. Doubt: - "A prostitute who obtained a great sum of money by granting the use of her body to various lovers has very recently been converted. Is she bound to restore every price of her crimes, or only a part, or to spend it on pious works? And if she is held to either, is it from strict justice, or only from counsel? N. B. this prostitute, restitution having been made, would not be reduced to the greatest poverty." - The response was: "The penitent woman is not to be compelled, but to be exhorted, that she spend the price of prostitution, according to the judgment of a prudent confessor, for pious uses."

648. If it is permitted to disclose our mind, we think that the contract, even after the delict has been perpetrated, remains invalid: for a contract invalid from the beginning cannot be strengthened; and moreover the alleged distinction of a twofold contract does not seem to rest upon a solid foundation: for morally there is one contract, and, since the act is illicit from its own nature, the labor annexed to it cannot be said to be estimable by price. - But, if he who acted illicitly has suffered some damage, under this head he can receive proportionate compensation; thus perhaps the decision of the Sacred Penitentiary adduced above can be understood: namely, the prostitute can retain the price accepted as compensation for damage inflicted upon herself; and in the same way not a few theologians who favor the second opinion can be understood.

649. Practical conclusions. (a) Today, in most regions, civil laws declare invalid contracts entered concerning an illicit thing; and, since they were passed for the common good, they oblige in conscience, at least after the sentence of the judge. Therefore he who promised money for a dishonorable thing is not strictly bound to pay it, even after the work has been perpetrated: for he can use the benefit conceded to him by law, especially since, with natural law inspected, the matter is doubtful; but by natural law he must compensate damages which followed from this work, according to the principles explained above concerning the unjust damager.

(b) Moreover he who, after the work has been perpetrated, has accepted the price promised to him, can retain it with a safe conscience if it does not exceed the limits of just compensation owed to him for the damage inflicted; but if the price exceeds these limits, he is indeed to be exhorted, but not compelled, to restore this excess.

650. (c) If someone, without any pact, has accepted gifts which, all circumstances being considered, are given for this end, that the donee may be induced to sin, these are not necessarily to be restored from strict justice, because they can be regarded as gratuitous gifts. But restitution is altogether to be counseled, lest from the retention of the gift someone be enticed to sin; thus, e.g., an honorable woman who from the circumstances understands that many things are being given to her by a man so that she may act more freely with him, must firmly reject all these things if she wishes to remain chaste.

651. I. By natural law all and only those can validly contract who enjoy the use of reason sufficient for understanding the obligation which they undertake: for for a valid contract on the part of the subject nothing else is required except free consent by which dominion can be transferred and an obligation undertaken.

¹ Lugo, disp. XXII, n. 280-303; Salmanticenses, Tr. XIV, De Contractibus, cap. I, n. 32-48; Haunoldus, Tr. VIII, cap. 3; Billuart, diss. I, art. 5; Beusch, cap. III, n. 21-226; Carriere, n. 174-203; Marres, l. III, n. 104-134.

Therefore by natural law the following are altogether incapable of contracting: (a) infants and children who have not yet attained the use of reason, but not those below puberty who already enjoy sufficient use of reason; (b) the perpetually insane; (c) the drunk and the furious at the time when they are not masters of their mind. - Less capable of contracting are the half-witted, and others who enjoy some, but not full, use of reason; and therefore it is altogether fitting that these should not be able to contract without a tutor or curator, who may furnish them counsel and help.

II. By civil law, prevailing among various Nations, all those can contract who are not prohibited by law. Now by positive law the power of contracting is limited for minors, interdicted persons, and wives, and indeed in a diverse way, according to diverse Nations.

652. For France, these things especially are to be noted: -

1. On Minors. These are those who have not completed the twenty-first year of age; they can be held in a threefold state: under paternal power, - under tutorship, - under curatorship.

(A) They are situated under paternal power when they are orphaned neither of father nor of mother, nor moreover are emancipated. - If they have their own goods, the father has the administration of them, and indeed the usufruct up to the eighteenth year of age (above, n. 146). - As regards contracts to be entered, they can furnish that which minors under tutorship can, with a few exceptions.

653. (B) Minors not yet emancipated, who are orphaned of at least one parent, are constituted under tutorship. - Tutorship is called: (a) legal, when by the law itself it is deferred to the father, the mother having died, - or to the mother, the father having died, - or to ascendants, both parents having died; (b) testamentary, which by the surviving father or mother, legitimately enjoying paternal authority, is deferred to someone to be exercised after the death of the one deferring; (c) dative, or nominative, which is deferred to someone by the family council, legal or testamentary tutorship being lacking.

Now minors cannot contract in their own name, but in all pacts are subject to the tutor, who acts in their name and administers their goods as a good father of a family. But the tutor can complete acts of mere administration alone; but acts of greater moment, only with the concurrence of the family council or tribunal added; indeed he is altogether prohibited from carrying out certain acts, as is explained more fully in the Supplement, p. 95* sq.

Acts entered by minors with all legal forms are valid and firm. But when forms of this kind are lacking, a distinction must be made: if common forms have been neglected, as is, e.g., the assistance of the tutor, the acts are rescindable, provided it is established that the minor was injured; if special forms were neglected, as is the consent of the family council, the acts are rescindable at the option of the minor and those having his cause, but not of the other party, even independently from injury; ten years are granted for seeking rescission.¹

¹ Cod. civ., art. 466, 1309, 1314; Planiol, II, n. 1081-1088.

654. (C) Emancipated minors are constituted under curatorship: this emancipation indeed is called tacit, or legal, when it happens by the law itself through marriage; and express, when it happens by a juridical act, with the explicit consent of the surviving father or mother, or of the family council.²

² Cod. civ., art. 476-479, in Supplement., p. 100*.

Emancipated minors indeed act in their own name, and can enter certain contracts of mere administration; but in matters of greater moment, they need the assistance of the curator, family council, or judge, according to the various prescriptions of civil law.³ - But if, with the consent of parents or of the family council, they undertake the office of merchant, they alone can carry out all things which pertain to the business, if the alienation of immovable things is excepted.

³ Cod. civ., art. 481-484; 840; 935.

655. 2. On interdicted persons.⁴ When adults, on account of weakness of mind or habitual dementia, are incapable of managing their goods, they can be interdicted by the authority of the judge: then they are constituted under a tutor, and contracts which they enter without the intervention of the tutor are rescindable, insofar as rescission of them can be sought, for ten years, by the interdicted persons themselves or their heirs. - But acts carried out before the judgment of interdiction can be invalidated if the cause of interdiction was already notorious at the time of the contract entered.

⁴ Cod. civ., art. 489-512, in Supplement., p. 101*; Planiol, II, n. 1090.

Those akin to interdicted persons are those to whom a judicial council has been juridically given, namely prodigals and the half-witted, who cannot prudently manage their goods. For these cannot litigate, transact, borrow money, accept movable goods, alienate their goods, or subject them to mortgages, without the assistance of the aforesaid council; and if nevertheless they furnish this, their contracts are rescindable. But other contracts entered by them cannot be rescinded.¹

¹ Cod. civ., art. 513-515, Supplement., p. 104*; Planiol, I, n. 2684-2725.

656. 3. On wives.² Wives who are still under the power of a husband cannot enter certain contracts without the special consent of the husband, or the authority of the judge; thus they cannot donate their goods among the living, alienate, grant a mortgage, or accept donations and successions. - Yet if they publicly exercise commerce, with the husband consenting, they can enter contracts which pertain to their commerce; even outside this case, they can be obligated by reason of delict or quasi-delict, - or by reason of domestic expenses, because, unless the contrary is established, the husband is judged to consent to these expenses. - Besides, under the dotal regime, the wife has the administration of her paraphernal goods (art. 1576), although she cannot alienate immovable goods (art. 1449-1538). - Finally, if the wife is separated from bed from her husband, she can now freely dispose of her goods, with dotal goods excepted.

² Cod. civ., art. 215-226; Planiol, III, 254-326.

Contracts entered by a wife against these provisions of law are rescindable at the option of the husband, of the wife herself, and of their heirs, for ten years; unless however they have been confirmed by the wife, with the husband consenting. - The Law of July 1907 concerning the salary of wives must be kept before the eyes.³

³ You will find the text of the law in Suppl., p. 224a*.

657. 4. On moral persons, or societies which have obtained juridical capacity, there are various provisions of civil law, which often restrict too much their faculty of contracting. In a general way, since they do not exist except by force of civil authority, they can do nothing except what is permitted to them by concession of the law. - Now those societies which are called etablissements publics or etablissements d'utilite publique are constituted under the tutelage of the Government, especially as regards the acceptance of donations or legacies, as if they were minors.⁴ - But private societies which are acknowledged by the Government, as civil or commercial societies, or guilds of workers, enjoy greater liberty in the administration of their goods.

⁴ A. Hudelot, Des obligations, Paris, 1908, n. 104-129.

658. III. Moral principles concerning contracts of minors, wives, and interdicted persons. The question is whether all these can in conscience use the benefit conceded to them by law; namely whether they can seek the rescission of a contract, even when they were not injured; and whether, the contract having been rescinded, they can retain the thing accepted (e.g., money borrowed).

1. If they acted without fraud, or have not been made richer from the contract, they can use the benefit of the law, since the law was passed for the common good; - moreover those who contract with minors, interdicted persons, or wives ought to impute to themselves the damage inflicted, since they are warned by the law not to make pacts with these except under the conditions defined by the Code.

659. 2. But if minors, interdicted persons, or wives used fraud, pretending that they are capable, or if from the pact they have become richer, they must compensate the damage unjustly inflicted by frauds, and restore the thing accepted in itself or in an equivalent: for then they are unjust damagers or possessors of another's thing.

Thus if a minor, already of mature character, falsely pretends that he is older by birth and borrows money, he must return it; likewise, he who is absent from the paternal home for the sake of studies and procures those things which are necessary for himself for honorable support; likewise a wife who borrows money for assisting her own and her family's necessities: for they have been made richer. - On the other hand, if minors, wives, and interdicted persons are known as prodigals, and spend the borrowed money uselessly by indulging in drinking and pleasures, neither these nor their parents or tutors are bound to restoring; for they have not been made richer from this, nor moreover have they used fraud. - Likewise, if someone in good faith handed over money by loan to some minor, thinking him worthy of trust, and the coins were consumed for useless uses, strictly speaking the minor is bound to nothing; but equity demands that compensation be given to the lender.

From the very notion of contract handed down above (n. 613), it is clear that there is a twofold effect of pacts, namely the transfer of right and the production of obligation. But the former in practice is not distinguished from the latter, since a right in one person imports an obligation in another. Therefore we must treat of obligations: of their nature, species, and extinction.

¹ Lugo, disp. XXII, n. 187-248; Salmant., cap. I, n. 54-73; Billuart, diss. I, art. 6-7; Beusch, cap. 6; Carriere, n. 259-444; Marres, lib. III, n. 177-377.

A contract obliges to two things: directly, to furnishing that concerning which the pact was made; indirectly, to compensating the damages which followed from the non-execution of the pact.

660. 1. On the direct obligation of contracts. (A) A valid contract begets an obligation in conscience, even if its validity cannot be proved in the external forum; for it is deservedly held as a law as regards the contracting parties themselves, who freely entered the pact and undertook a moral obligation upon themselves.

(B) The nature and extension of the obligation depends on the will itself of the contracting parties, insofar as it can be understood from all the circumstances. - For contracts, as ordered to the common good, are to be entered and fulfilled in good faith; therefore they oblige to all those things which those making the pact intended. But their intention is gathered not only from the words employed, but also from the character of the persons, the usage of places, or civil laws. - But if, after all things have been carefully weighed, some doubt remains, a friendly transaction is to be advised.

(C) Contracts do not have obligatory force except between the contracting parties themselves, and those who hold their place; for no one incurs an obligation from a pact unless he has furnished consent to it.

(D) A rescindable contract obliges at least one contracting party until he who has the right of rescinding seeks rescission; but if rescission has not been sought within the time defined beforehand by law, the contract becomes firm, and binds the two contracting parties.

661. 2. On the indirect obligation of contracts. (A) By natural law, when the contracting parties, from theological fault, have not fulfilled the obligation undertaken, they are bound to compensate the damage which followed from this, because they are truly the unjust and culpable cause of this damage; but if the damage happened fortuitously, without any fault, the debtor is not bound to repair it, unless he has undertaken fortuitous events upon himself.

If damage arises from merely juridical fault, it certainly must be repaired after the sentence of the judge, from what was said above, n. 476; indeed probably, according to some, even before the sentence, because the contracting parties are judged to obligate themselves according to the sense of the law; but, according to the laws, damage must be repaired as often as fault even merely juridical is present. Yet the more probable opinion teaches that they are not bound except after the sentence of the judge, or at least after the petition of the injured person; for no one is judged to obligate himself morally beyond that which is required by natural law, unless he explicitly declared this.

(B) By French civil law, compensation is owed on account of non-execution of a contract as often as the debtor is in delay, and at the same time damage arises from juridical fault, or from the omission of ordinary diligence which the laws presume and require.¹ But generally he is not held concerning fortuitous event, unless he obligated himself to this, or some fault preceded the fortuitous event itself.²

¹ Cod. civ., art. 1136, 1142, 1145-1155, in Supplem., p. 80*; Planiol, II, n. 221-277.

² Cod. civ., art. 1148, 1302, 1807, 1881, in Supplem., p. 81*, 89*; Planiol, n. 231-233.

Among the various species of obligations about which jurists discuss, there are two which it will not be useless to explain briefly, namely obligations confirmed by oath, and conditional obligations.

662. 1. On an obligation confirmed by oath. Sometimes the contracting parties, or at least one of them, obligate themselves to furnishing something under the faith of a promissory oath; it is asked whether from this a new obligation arises. To solve this, it must be kept in mind that an oath in this case is something accessory to the contract, since it is only added to it. Now a threefold hypothesis can be imagined, according as the contract is valid, invalid, or rescindable.

(A) If the contract is valid and firm, the oath adds another obligation to the natural obligation, namely the obligation of religion; and therefore, if it is broken, there will be a twofold malice, against justice and against religion. - But the obligation of the oath is not broader than the obligation of the contract, and, when the latter ceases, the former also ceases: for the accessory follows the principal.

(B) If the contract is invalid from natural or divine law, - because, e.g., free consent is lacking, or the object is illicit, - the contract does not become valid from the oath, which cannot supply consent nor be a bond of iniquity; - nor does the oath itself have force, since the accessory follows the nature of the act to which it is added.

663. (C) If the contract is indeed valid by natural law, but invalid or rescindable from civil law, a distinction must be made between the oath itself and the contract to which it is added: (a) the oath is valid, and therefore must be observed, unless a dispensation has been obtained from it. For he who sanctioned by oath a promise of doing something which is good in itself, - e.g., a minor who swore that he would not rescind a contract otherwise just, - is bound, by virtue of religion, to keep the promise: for the obligation arising from oath is grave, and moreover the minor, by not seeking rescission, does not undergo a grave inconvenience. But if a dispensation has been granted by ecclesiastical authority, now the obligation of religion ceases, and rescission can be sought.

(b) But it is controverted whether by such an oath the contract which was rescindable becomes firm and valid, and therefore immediately obliges the two contracting parties from the virtue of justice. Formerly by Roman civil law a contract was strengthened by oath; but today, in French law, and in many other codes, this is not admitted; and since the matter here concerns temporal matter, the provision of civil law can be observed in conscience;¹ and therefore he who, using the benefit of the law, seeks rescission of the contract does not injure justice, but only religion.

¹ But in sacred matters, which must be judged from canon law, by oath a contract otherwise rescindable becomes firm, because, as Alexander III says, "it is not safe for anyone to come against his oath, unless such an oath is one which, if observed, tends to the ruin of eternal salvation" (Decret. Greg. IX, lib. II, tit. 24, c. 8, p. 361, ed. Friedberg).

664. N. B. In the aforesaid cases it is supposed that the oath was freely furnished; but if it was so extorted by fear that it can in no way be called free, it is not valid, nor therefore adds any force to the contract; if fear did not remove deliberation of mind, more probably the oath has force, but a dispensation from it can easily be obtained. Hence if someone, from fear of death, promised money by oath to a robber, strictly speaking he is not bound to pay it, but for caution he can seek a dispensation from the oath.

665. 2. On conditional obligation. Sometimes a condition is added to a contract, and therefore the obligation is called conditional, insofar as it depends on the fulfillment of the condition. - The condition added can concern the present, the past, or the future. If it concerns the past or the present, even uncertain, it does not suspend the obligation, but at that very instant at which the contract is entered, the obligation exists or does not exist, according as the matter has happened or has not happened.

Therefore it remains to speak of the obligation which depends upon a future event. But this can be twofold: suspensive, when the existence of the obligation depends on the fulfilled condition; resolutory, when an obligation already existing at the time of the contract, afterward, the condition having been fulfilled, is resolved or removed, e.g., I sell you this horse, yet under this law, that the contract be null if war is stirred up within ten days. - Let us explain this briefly.

(A) On the effects of a suspensive condition. (a) Before the event, the obligation is suspended, and therefore the debtor preserves the dominion of the thing, while the creditor acquires only a conditional right. (b) When the condition has been fulfilled, the contract immediately becomes perfect, without renewal of consent, and the obligation is judged to have existed from the day of the contract entered. (c) When the condition is lacking, the contract is judged to have been invalid from the beginning, and therefore to have begotten no obligation; hence if the thing had already been handed over, it must be restored with the fruits received.

666. (B) On the effects of a resolutory condition. (a) Before the event, the contract is held as valid, and the debtor is held by the same obligations as if the contract were firm; thus he must furnish or hand over the thing promised. (b) When the condition has been fulfilled, the contract is dissolved, without any sentence of the judge, and therefore the obligation arising from it is judged never to have existed. (c) When the condition is lacking, the contract becomes altogether firm, and from it the same obligations arise as if no condition had ever been added.¹

¹ Cod. civ., art. 1168-1184; Supplem. for France, p. 83*-89*; Planiol, II, n. 374-388. - On obligations for a day, alternative, in solidum, divisible and indivisible, with stipulation of penalty, see Cod. civ., art. 1185-1233.

667. 1. Various modes are enumerated. Obligation can be extinguished in many ways, namely:

(a) by prescription, concerning which it was said above, n. 243;

(b) by rescission of the contract, when a rescindable contract is dissolved by the authority of the judge; or by annulment, when it is declared invalid by the judge;

(c) by payment of the debt, or the furnishing of the thing concerning which agreement had been made;

(d) by condonation, when the creditor remits the debt;

(e) by compensation, which obtains place as often as both contracting parties owe to each other the same quantity of money or of fungible things;

(f) by confusion, when the obligation of the debtor and the right of the creditor come together in the same person, e.g., through testament or succession;

(g) by the destruction of the thing owed, namely as often as the certain and determinate thing which was owed is destroyed or lost without the fault and delay of the debtor.

Concerning these you will find more in the civil Codes.¹

¹ For France, Cod. civ., art. 1234-1314; Supplem., p. 84*-89*; Planiol, II, n. 399-629.

668. 2. Moral questions. But here moral questions occur concerning payment and cession of goods, when the debtor is unequal to paying all debts: 1. whether he can retain something; 2. what order must be preserved among creditors; 3. whether cession of goods removes the moral obligation of paying debts fully.

(A) Whether a debtor, unequal to paying all his debts, can retain something for himself?

It has already been said above (n. 600-602) that inability, whether absolute or moral, excuses from restitution as long as it lasts; from which it follows that the debtor by natural law can retain for himself those things which are necessary for the honorable support of himself and his own, yet living sparingly.² But he is bound honestly and sincerely to cede other goods to his creditors. Hence: -

² Not a few think, with Noldin (n. 509), that they are not guilty of injustice who reserve for themselves means by which they can begin another business from small beginnings. For the beginning of some business can be referred to honorable support; moreover the good of society itself demands that honorable cessionaries of goods be able to begin a new business, lest they fall into despair and be rendered useless or harmful to society. - As regards French civil law, cf. Cod. Commer., art. 530.

(a) Those gravely sin against justice who, besides the goods necessary for themselves and their own, conceal certain other goods and withdraw them from creditors, whether by carrying them elsewhere, or by selling them and placing the money obtained from this in safety; likewise husbands who fictitiously sell their own goods to their wives, so that they may afterward enjoy them; in one word, all those who by various frauds withdraw from creditors goods owed to them. - Yet those can be excused who secretly retain certain things most precious to themselves, on account of the memory of parents or friends, and which others esteem lightly, especially if there is a founded hope of afterward refunding the price to creditors.

(b) Those become participants in the injustice of the debtor, and therefore as unjust cooperators are bound to restitution, who concur with him in defrauding creditors, provided they are conscious of the bad faith of the debtor.

669. (B) On the order to be preserved among creditors. By natural law, the goods of debtors must be divided equally among the various creditors, unless some special reason stands in the way. Now certain creditors, from civil law, must be preferred to others; but the law, although it is diverse in various regions as regards certain particulars, commonly establishes the following, especially in France.

(a) Things belonging to another, namely stolen, deposited, rented, lent, found things, etc., which still exist in themselves, must be restored to their owner, even if nothing remains for satisfying the creditors; for the thing cries out for its owner. - But if the thing exists only in an equivalent, the creditor is not to be preferred to others, because he has only a personal right, and not a real one.¹ - These prescriptions indeed are altogether consonant with reason.

¹ Cod. civ., art. 2092-2093.

(b) Secondly, judicial expenses must be paid for the operations by which the goods of the debtor have been changed into money.²

² Cod. civ., art. 2101. Planiol, II, 2552-2553, 2623-2624.

670. (c) Thirdly, the chief taxes must be paid (contributions directes, impot du timbre, contributions indirectes).³

³ Planiol, II, 2643.

(d) In the fourth place come creditors privileged by a special privilege, who are compensated by means of money brought in from movable things, e.g., pledge-holders (gagistes), lessors of immovables (bailleurs d'immeubles), according to the order fixed by law.⁴

⁴ Planiol, II, 2542, 2627, 2634, 2636.

(e) In the fifth place, creditors privileged by a general privilege, who are compensated from the remaining movable goods and then from immovables, the following order being observed: 1. funeral expenses; 2. physicians' fees; 3. expenses for the nourishment of an infant (mois de nourrice pour enfants eleves hors de la maison); 4. wages; 5. debts for sustenance (fournitures de subsistances); 6. indemnities for fortuitous cases (accidents industriels).⁵

⁵ Planiol, II, 2642.

(f) In the sixth place, mortgage creditors by a privileged mortgage, e.g., vendeur d'immeuble, copartageant, architects, contractors.⁶

⁶ Planiol, II, 2628, 2886.

(g) Seventh, mortgage creditors by an ordinary mortgage, with the order of the day of registration of the mortgages being preserved, if registration is required.

(h) Eighth, the other taxes (debets des comptables, droits de douane, frais en matiere penale).

(i) Ninth, merely chirographic or common creditors.

671. N. B. From what has been said, there are nine orders of creditors; now the civil law, in force in France and many other States, decrees: (a) that the prior class of creditors must be satisfied fully before creditors of a later class receive anything; (b) that in the same class of creditors, each must be satisfied according to the proportionate part of the debt.

672. Things to be noted for the forum of conscience. (a) The prescriptions of civil law in this matter are determinative of the right of property, and therefore bind in conscience, at least more probably, even before the sentence of the judge.

(b) Moreover, in many regions, it is established by civil law that the payment of debts not yet demandable is invalid, or even the payment of demandable debts made in another manner than in money or commercial notes, after the date of cessation of payments defined by the judgment of the tribunal, indeed within a few days (in France, within ten days) before this declaration; and rightly so, lest the debtor unjustly favor certain creditors before others; accordingly these statutes bind in conscience, at least after the sentence of the judge.¹

¹ Moreover it is provided by civil law, in the case of judicial cession of goods, that certain creditors should not enter into any pact with the debtor favoring themselves, to the detriment of others. For France, cf. Cod. commerc., art. 597-598; ibid., art. 437-614, one may read those things which regard la faillite, la banqueroute; cf. Law of March 4, 1889, on judicial liquidation, in Riviere, Lois usuelles, p. 1019-1021.

(c) Outside the cases determined by law: 1. it seems certain that debts from an onerous title must be paid before debts from a gratuitous title; 2. it is commonly admitted that certain debts are to be preferred to uncertain debts, and a certain creditor to an uncertain one; 3. charity and equity counsel that the poor be preferred to the rich, and that older debts be paid first, but it is not established that this is required from justice. - Hence probably it is permitted to satisfy first a creditor who petitions first, even if he is later in time, even with prejudice to others.

673. (C) Whether cession of goods or an agreement with creditors extinguishes the moral obligation of paying debts?

State of the question. Sometimes a debtor unequal to paying all his debts hands over all his goods to the creditors, so that from them the debts may be paid according to a proportionate part; this is called voluntary when it is done spontaneously and accepted by the creditors; but judicial when it is imposed by the judge even against the will of the creditors; culpable or inculpable, according as the debtor has become unequal to paying debts from his own fault or from mere misfortune. Sometimes also an agreement is made with the creditors, by force of which the debtor promises to pay a proportionate part of the debts, according to his means. - These things being posited, the question arises whether the debtor who has handed over all his goods to the creditors, or has entered into an agreement, but has not paid the debts fully, is excused in conscience from the obligation of restitution if afterward he becomes richer.

674. Principles. By natural law, cession of goods of itself does not remove the obligation of paying debts fully, but only excuses from restitution for a time, on account of the debtor's inability (above, n. 600); whence the obligation afterward to make restitution remains, unless the creditors explicitly or implicitly remit the debt (above, n. 606).

(a) Moreover, according to all, if someone by his own fault has become unable to pay debts, he is not dispensed from the obligation of making restitution, since he is an unjust damager, and besides, the creditors are not judged to condone the debt in such a case.

(b) But if someone has become unequal to paying through mere misfortune, a distinction must be made; if the cession is voluntary, and the creditors freely and explicitly declare that they wish to demand nothing further, there is no difficulty, since such a declaration is rightly held as a remission of the debt. But if it is judicial, the solution depends on the intention itself of the legislator; thus, in France, it is established that the debtor is not freed except according to those things which he pays, so that if he acquires new goods, he is bound to give them up until full payment.¹ But in certain other regions,² the law does not decide the matter so openly, and the common persuasion has prevailed that a debtor who has honestly handed over all his goods to the creditors is immune from every obligation of restoring anything further; for, on the one hand, merchants receive greater profit because of the peril of the lot, and therefore readily consent to such a loss; and on the other, the public good demands that unfortunate debtors, otherwise honest, should be enticed to begin a new business by the hope of retaining profit for themselves. This indeed can be tolerated where the law is really so understood or where custom prevails.

¹ Cod. civ., art. 1270, in Supplem., p. 86*. We think that this also holds in the case of an agreement with creditors.

² Thus in England, according to Crolly, III, n. 1202; cf. Lehmk., n. 1035; id., Casus, t. I, n. 773; Noldin, n. 509.

But an honorable man will strive with all his powers to pay his debts fully; moreover, if any creditors have fallen into poverty thereby, charity and equity demand that full satisfaction be given to them, insofar as this can be done.

The remaining matters we shall now explain in the chapter on contracts in particular.