Article I: Generalities Concerning Contracts

What a Contract Is. A contract is the consent of two or more persons in the same juridical agreement (cf. l. 1. Huius § 2. l. De pactis, II, 14). - Many things to be said concerning contracts are valid concerning a quasi-contract, which is an honest fact, existing by authority of law or by the voluntary will of someone, which produces a certain obligation of justice. Such is the management of affairs.

A contract can be considered in fieri, or in its constitution, and in facto esse, or in the permanent juridical effect which it produces.

How Manifold It Is. A contract is divided under various respects. 1. From the intention of the contracting parties, or the end of those operating, contracts are gratuitous or onerous, according as the stipulation is made from an intention of benefiting the other party, as for example in donation, or the utility of both is intended. A mixed contract is one in which only a partial price is demanded; but it remains gratuitous if it is annexed to donation. Analogically onerous is that on the occasion of which something must be paid under another title, for example of support. - An onerous contract is commutative, if what must be furnished is certain from the beginning; it is aleatory, if this depends on an unknown or uncertain event, for example in insurance.

2. From the end of the work, every contract changes rights: but some contracts immediately change real rights, as, in our law, donation; others beget a personal right, insofar as they generate an obligation of justice. Yet observe that it is not admitted by every law that a real right is transferred by consent alone; and that for the most part, in order that a juridical change affect persons extraneous to the agreement, a certain inscription in a register or tablets is required, or another solemnity is commanded, whereby knowledge of the matter can be had by those whose interest it is.

Moreover, an obligation of justice is distinguished from an obligation of fidelity. In this latter, mere faith is interposed; and its obligation is light in kind. In the former, a right is granted, which of itself is grave. An obligation of fidelity does not pass to heirs, unless the one promising wished efficaciously to impose on them the burden of a real promise, while an obligation of justice affects the patrimony. (Cf. Quaestiones de iustitia, n. 290.)

3. From effect or efficacy: a) Some, if substance or stability is attended to, are in general valid, firm, or in various degree infirm, invalid: which are either plainly non-existent and lacking the very figure of a contract, as a civil marriage without an official and witnesses; or are simply null, which are invalidated by sentence of the judge. More properly, those are called rescindable which, because of lesion, or excessive detriment of one party, can be invalidated.

b) Others, as regards the effect of obligation, are unilateral or bilateral (synallagmatic), according as an obligation is imposed immediately on only one party or on each party. A unilateral contract can be onerous: thus a loan for consumption with a stipulation of interest.

c) There are also, if juridical efficacy is attended to, naked or clothed contracts, according as they produce only an obligation of conscience or also a civil action. Naked contracts are not always devoid of every civil effect: for example, it can happen that what has been paid from a naked agreement cannot be sought back.

4. By reason of form, some are consensual, which are perfected by consent alone; others real, which have their beginning from the handing over of the thing (pledge). - Some are solemn and simple, according as positive law has imposed certain forms to be observed or not. Most today are simple. - They are express or tacit. Thus, from the fact that an accused man approaches an advocate who undertakes his cause, a tacit contract is had between them.

5. By reason of appellation, they are named, which have a special name, or unnamed, such as the four real contracts (which are called regular): I give that you may give; - I give that you may do; - I do that you may give; - I do that you may do.

6. By reason of subsistence, they are principal, which stand by themselves, or accessory, which accede to another principal contract: pledge, hypothec.

— 1. The constitutive elements of a contract are distinguished as essential, natural, accidental. Essential elements cannot be excluded without the contract becoming null or another contract. Thus, if the price is suppressed, sale becomes donation. - Natural elements, as it were of themselves, accompany the contract, so that unless they are positively excluded, they are considered, from law or custom, to be contained in the contract by the tacit consent of the parties: thus, in purchase-sale, the guarantee against eviction, in favor of the buyer. - Accidental elements are not included in the contract unless they have been agreed upon in express words. Thus a day given so that the buyer may more easily pay the price.

2. The essence of a contract is always composed of the thing or matter, by which is designated the remote or proximate object about which the agreement turns: a horse, a horse to be sold; and of consent, or the conspiring of the wills of persons who are capable by law. Conspiring supposes wills of the parties which agree concerning a substantially identical thing. Must cause besides be added? This today is rather much disputed and is denied by many jurists. By the name of cause there are by no means designated the various reasons which could have led each party to consent; but there is understood the proximate motive which, proper to each contract and therefore always the same, enters into the agreement itself. In gratuitous contracts, the cause will be the intention of beneficence; but here, in moral estimation, the subjective motive itself by which the intention has arisen will have to be considered. In onerous exchanges, one party does, gives, promises, on account of the performance or promise of the other: the seller yields the thing on account of the promise of the price; the buyer promises or pays money on account of the promised or accomplished handing over of the thing. Some defend the utility of distinguishing cause from object, for cause is essentially required to be licit, and it can turn upon an illicit object. Thus a delict is an illicit object; reparation of the delict makes a licit cause. Others think the distinction useless, for cause is confused with the proximate object.

I. Concerning the Object of a Contract. The object of a contract, if it is a thing, must exist at least in hope; under the respect under which it is considered, it must not be outside commerce; and it must be estimable by price: such is not a simple showing of the way made by anyone, nor anything which is already owed from justice. But nothing prevents you from receiving a price for an obligation undertaken, although by accident, on account of a similar obligation already undertaken, you fulfill it without new inconvenience: thus a messenger who, on account of another cause already present, must go to a certain city, can of himself demand solid compensation for making the journey. - If a contract is made concerning an action, this must be possible, physically and morally; useful to him for whose sake it is done; honest. Indeed, moved by their liberal prejudices, many jurists of France and Belgium have denied that a contract can be made concerning an object of the moral order, but say that it is required that the stipulator, at least from a penal clause or from an added stipulation for his own advantage, of which the other is made accessory, perceive an economic or pecuniary utility. That opinion is founded neither on the text of the Code nor on the authority of tribunals. Wherefore effort must be made that that prejudice be abolished. Cf. Colin and Capitant, II, p. 293, 1.

If the thing exists only in part, or the action has been possible only in part, it will have to be estimated from the nature of the thing and the intention of the parties whether partial performance is to be made or not.

Thing and action ought of themselves to be proper to the one promising. Yet someone can promise another's deed; nor does anything prevent that, by selling another's thing, someone immediately oblige himself first to acquire the same thing for himself. This frequently happens in commercial business.

Jurists also deny that a stipulation in favor of a third person will be civilly efficacious, unless, for example from an added penal clause, you have created for yourself some economic utility. For otherwise the right could be urged by no one: not by the contracting party, since it does not interest him; not by the third person, to whom nothing has been promised.

Certain objects are excluded by various laws. Thus liberty cannot today be alienated indefinitely (art. 1780, French Code); public functions, and not rarely a future inheritance, cannot be objects of contract (art. 1600 F.C.).

What forensic usages bear concerning objects of a higher order must be carefully attended to; as for example, concerning the religion in which children are to be educated; concerning religious or merely civil funerals; concerning cremation, etc.

II. Concerning the Cause of a Contract. This must be true and licit. By positive law many causes are prohibited which are opposed to the law of nature. A contract of base cause is void both by the law of nature and by positive law. Yet once the base deed has been fulfilled, the indifferent price which is paid can be retained, indeed, according to the common opinion, can be demanded. But it must be seen whether by positive law a condictio (i.e., a personal action) for what is not owed is granted. By the Code of Germany, art. 817, it is denied.

It also happens that, because of a certain reason of the common good, the legislator sanctions the transfer of a right, with consideration of cause neglected. To this kind can be referred the disposition of art. 707 of the Italian Code, 2279 of the French Code. They are called in German Abstrakte Rechtsgeschafte.

— It can be asked whether or not a cause which of itself does not appear must be expressed in the contract. Is it, for example, enough that someone promise the payment of money, or must he besides indicate the cause of the debt? Art. 1192 of the French Code does not require the expression of cause. But practically, at least in the law of Belgium and France, beware lest the debtor sign merely by name a document in which his debt is stated, but let him acknowledge the debt in at least a few words written by his own hand. Let him write, for example: "Good for 1000, owed by me" (Bon pour 1000. dus par moi). Otherwise juridical proof may be lacking.

1. Notions. In the matter of contracts, it is necessary to distinguish parties, third persons, author, successor, or one having the right, one having the cause. Parties are the contracting parties themselves, who by themselves or through representatives effect the agreement itself; and the one offering or promising is called the promisor, the stipulator, the one who acquires the promise or the right. Third persons are those who are extraneous to the juridical business. The one who gives origin to someone's right is the author (thus a testator, a seller); the one who succeeds in the right is the successor, or also the one having the right, having the cause. (In French, he concerning whose inheritance there is question is often called, as a substantive, le de cuius.) Frequent, also for conscience, is the use of the principle concerning a thing done between others, by which the effects of agreements are circumscribed to the parties and cannot bring prejudice to third persons. Yet successors in the patrimony receive that patrimony burdened with all its burdens; and a right which someone has from another cannot be received except such as it existed with the author, therefore affected by the same qualities and defects.

2. In order that a contract be valid, the contracting parties must be capable. By the law of nature every physical person, and also every moral person legitimately constituted, is capable so that he may contract by himself or through others (Cf. Slater, A manual, etc., I, 486).

One who enjoys the use of reason is capable of contracting by himself.

But with moral persons omitted, concerning whom different laws establish things differently, by modern laws physical persons are capable, except those who are affected by legal incapacity. By such incapacity there have customarily been protected minors by age, persons of infirm mind and spendthrifts, and, in still many laws, also wives. Acts which they perform are sometimes declared null, with relative nullity concerning which only the incapable person and those who represent him can act; sometimes they are merely rescindable because of lesion. Various laws must be consulted. In the forum of conscience, the persons protected can use these laws. Yet if they have acted deceitfully in the contract itself, it indeed does not therefore oblige them more than is established by positive law, but they will be held for damages. Thus a minor who sincerely, or with the intention of returning it, has received money as a loan, and then dissipates it prodigally, is held to nothing by either law, civil or natural. But if he contracts fictitiously, with the intention of dissipating and not returning, he will have at least a natural obligation of restitution.

Nevertheless, that by which an incapable person has been made richer from the contract which is invalidated must always be restored. Finally, not rarely today the capacity of a minor by age is increased by special laws which favor deposits in public savings banks.

While the law protects a minor against his weakness, it by no means thinks of rendering him immune from the effects of his delicts.

Besides general incapacities, special ones are established for restraining abuses, by which, for example, physicians can validly receive nothing, by gift or testament, during that illness, from a non-consanguineous sick person whom they cared for in his last illness.

2. Minors by Age from Positive Law. I. Norms rather common. From rights which regard things, personal rights must first of all be separated. For in various laws, personal rights find and also make an adult minor more capable. They find him, for example, capable of validly contracting marriage, of acknowledging illegitimate offspring (which the Code of Holland (337) always grants to the mother, to the father if he is 19 years old); they make him capable: for, at least with the assent of those who must consent to the marriage, capacity for nuptials will bring with it capacity for making nuptial pacts, at least where those pacts cannot be celebrated except before the nuptials; and most laws admit emancipation by marriage.

In the order of things itself, a minor is often more capable of making a testament than of contracting.

In the present place, however, there is question only of the capacity of contracting. These things, then, are almost common to positive laws.

1. As long as minors by age are not at least emancipated, they themselves generally cannot firmly contract obligations: but, with the cautions prescribed for graver acts observed, either parents or tutors act for them. Yet some laws permit them contracts by which they receive goods without obligations; they also permit them to deposit their own money as if adults in a public savings bank, and they establish the mode by which they can lease their labor.

2. After they have been emancipated, in graver acts a curator must be present for them, or in a similar way care is taken lest in these things they act imprudently.

3. The nullity of agreements which an incapable minor has made is not absolute but relative, insofar as it can be opposed by the minor or by him who represents the minor, but not by the other contracting party.

4. Because the legislator intends to protect minor age, not to patronize frauds, a minor who has deceitfully feigned himself older by age either is held for damages or can no longer allege age for the nullity of the contract. But what is required that that deceit be had juridically is defined differently by different laws.

5. Ratification by which an infirm act is healed is generally admitted by law, but only from the time when the contracting party has become an adult.

II. Certain things proper to some laws. 1. In Latin law, the incapacity by which minors by age are protected coheres with paternal power, insofar as those who exercise paternal power act for minors or with minors, and insofar as that representation directly affects only legitimate or legitimated children. Yet by legal tutelage, which confers a similar paternal power, even natural children are protected.

By the Austrian Code, there are distinguished infants, who have not yet completed seven years; impuberes, who have not yet completed fourteen years; pubescent minors, who have not yet completed twenty-four years. Yet free disposition concerning the fruits of one's own industry is permitted to a minor who is not nourished by parents; but one twenty years old can obtain from the judge a declaration of majority (252) and free administration of revenues which exceed annual expenses. Moreover, the leasing of labor made by a minor cannot be invalidated by a tutor without a grave reason. - By the Codes of Austria (241), Switzerland (19), minors can acquire goods without obligation. By the Brazilian Code (5, 6) absolute incapacity is sanctioned, without exception for deceit, until the age of sixteen years: afterward it becomes relative. - From the Code of Holland, a minor eighteen years old can obtain partial emancipation from the judge, if the parents are not unwilling (480-485); he alone deposits money in a public savings bank; with the consent of the one by whom he is represented, he is permitted to lease his labor. It is proper to the Code of Spain that even contracts made by a tutor, within the scope of his power, can be rescinded because of lesion or damage which exceeds the fourth part of the value of the object.

By Italian law an action of nullity is prescribed in five years (after majority). Acts clothed with the due solemnities are firm no less than acts of one older by age.

The Latin laws agree in sum, except that for the most part the prescription of the action is reduced to four years. Yet the Code of Portugal has preserved prescription of five years. - Besides, the Code of Spain gives an action by which acts themselves made by a tutor, within the limits of his power, nevertheless can be rescinded because of lesion (or damage) which exceeds the fourth part of the value of the object.

A less simple regime has been introduced by the Code of France (and of Belgium), whereby some acts are merely rescindable, while others are invalidated by relative nullity. a) A contract, whatever one the minor has made, can be rescinded if it has been even a little injurious: provided the damage has flowed not from a fortuitous event but from the agreement itself. Therefore this is valid: the minor is restored not as a minor, but as one injured. b) But if he has made acts which the tutor himself could not make alone, or if he alone has received payment of a debt, those acts are null with relative nullity. - Concerning an emancipated minor, there must be distinguished: a) acts which he can make alone: they are firm, yet in such a way that if they oblige him to excessive expenses, they can be reduced by the judge to just terms; b) acts which he could but had to make with the assistance of the curator: they are rescindable because of lesion; c) acts which were besides subject to other solemnities: they are affected by relative nullity. - Actions concerning nullity and rescindability are prescribed in ten years from majority.

2. By the law of the German Code, a minor, even alone, can make acts which merely profit him without burden: but acts which can be damaging to him he cannot make firmly without the authority of the one who represents him, or also, sometimes, of the tribunal of tutelages. These can ratify such acts. But unless ratification has intervened within two weeks, the acts are null. Acts, however, which are made with the due solemnities are firm, as if made by one older by age.

3. By English law, a minor can make certain contracts profitable to himself or reasonable and congruent with his state or condition. Other contracts, however, are absolutely null and cannot be ratified. But a minor never obtains the benefit of fraud.

4. In the U.S.A., the principle formerly admitted, by which all acts of minors were null or subject to annulment, is reasonably tempered. Nothing more definite seems able to be said.

3. Wives from Positive Law. I. More general indications. A greater variety of laws is perceived here. For some laws admit no incapacity of contracting proper to the wife; others, merely for firming the authority of the husband, require his assistance; while others intended also to provide for the weakness of the weaker sex. But a judge can generally supply the denied license of the husband. Moreover, the inclination of modern laws is toward restoring general capacity. Indeed, certain laws have begun to acknowledge the wife's right of managing the family business, imputing expenses to the common goods. But a wife who is permitted to exercise a separate art or business has already long enjoyed full capacity in these matters. Modern laws also are accustomed now to make the wife capable of administering the moneys which they have entrusted to public savings banks. The nullity of contracts, however, can sometimes be opposed by only the other spouse, sometimes by the husband and his heirs, sometimes by the wife, indeed also by her heirs. By permitting this to the wife herself, the legislator demonstrates the intention of protecting her infirmity.

II. Things proper to various laws. 1. Latin law. Neither in Austria, nor in Switzerland ¹, nor in the republic of Costa Rica is a special incapacity of the wife sanctioned. Moreover, by the recent law of 17 July 1919 it was suppressed in Italy.

By the Swiss Code, not only the husband, but also the wife, for daily expenses, represents the community (168). But by the Brazilian Code, whatever the nuptial pacts may have been, the husband cannot make graver acts concerning the goods of the wife without her assent; indeed he needs her consent in order to make notable donations from the common goods (285). Again, however, the wife also needs the general or special license of the husband for acts which touch her own goods (242). The nullity of an act unduly made without the husband's consent can be opposed by the husband (252); but an act which the husband has unduly made without the wife's consent, the wife and also her heirs can impugn (239).

Nevertheless, among most Latin nations, a certain incapacity continues to subsist: thus in Spain, Holland, Portugal, Romania.

In France the severity of the Civil Code has been tempered by more recent laws: for example, by the law of 13 July 1907, completed by the law of 8 June 1923, the wife is permitted to manage freely the gains and goods which she has obtained in exercising a profession distinct from the husband's profession; - by the law of 12 March 1920 she can freely enroll in a syndicate; she can have and administer deposits in a savings bank; and she obtains full capacity when separation of bed has been obtained.

Even with these things omitted, except for the capacity which she draws from nuptial pacts according to the various regime of goods, she needs the authority of the husband for contracting. And the license must be special and of itself written, unless there is question of exercising a profession or of acts which are not customarily written.

The license of a husband who refuses to consent or who is incapable can be supplied by a tribunal.

Acts made without the due license are vitiated by relative nullity, which the husband, the wife, and the heirs of each can use within ten years (art. 225). Acceptance of a donation is absolutely null.

2. The Code of Germany establishes no incapacity of the wife. Yet the husband can seek rescission of an obligation which demands the wife's personal labor.

3. By the law of England and the U.S.A., the wife long labored under absolute incapacity. But by the Act of 18 Aug. 1882, she was made fully capable; and even in the U.S.A. incapacity has been so suppressed that she can make all contracts not expressly excluded by statute.

¹ Yet she needs the consent of the husband in order that she may renounce an inheritance.

The Necessity of Consent. 1. A contract, which must be well noted, denotes a voluntary exchange of rights; moreover, no one unwillingly acquires a right, at least definitively, while the one offering wishes to transfer some right, not simply to lose it. Wherefore true internal consent is required, and mutual consent, so that what one offers, that very thing the other expressly or tacitly accepts. For in favorable matters the proverb easily obtains: "he who is silent seems to consent." In order that consent be mutual, it is necessary that both wills be formally joined, and therefore that the one offering intimate his will to the other, either by himself or through a procurator.

2. This consent is not impeded by the will not to fulfill the obligation; but it is impeded by the will not to bind oneself. But if the negation has been partial, i.e. if someone rejects, from among several obligations of the contract, some one which he did not know to be conjoined, the prevailing will must be investigated, and according to it judgment must be made concerning the matter.

3. Positive laws sometimes require that consent be expressed in a certain form, either for the very value of the act, or so that the contract can be proved. In the former case there is had a solemn contract, such as marriage is in ecclesiastical law; such as, in civil law, are nuptial pacts and a testament. In the other case the agreement is valid, but cannot be juridically demonstrated. Thus no agreement concerning a thing which exceeds 500 lire in value can be proved by witnesses, according to the Italian Code, art. 1341.

Concerning the Beginning of the Obligation. A twofold question is moved here.

1. Can, and for how long can, either the one promising or proposing a contract efficaciously revoke the promise, or the one accepting revoke the acceptance?

The question is scarcely practical when a consensual contract is made between those present; and such also is judged to be the case when the parties make an agreement by telephone. For a response is at the same time given and intimated by one present, and when the response has been given immediately the contract is perfected. But unless it is given immediately, the one promising can retract his consent; nor is that retraction judged harmful to the other.

But when an agreement is carried on between absent parties, by letters, by telegram, by messenger, the matter, because of the damage which retraction can bring to the party who was ignorant of it or did not fear it, becomes less clear; and even among jurists themselves it is controverted, when positive law does not explicitly define the matter.

The classical doctrine, received for a long time, alleged the very essential nature of a contract in order to permit to the one promising revocation before the acceptance of the other, unless he had manifested a different intention of binding himself, and this had been accepted by the other party. Thus still Pacifici-Mazzoni, op. cit., IV, § 47, who nevertheless bind the one retracting to pay damages, if the one accepting the promise, whose revocation he was ignorant of, had thereby been injured.

Today, however, not a few contend that the one promising, at least implicitly (unless he expressly says otherwise), by the promise itself, is obliged to await a response given in due time. This, unless a day is fixed, must be given immediately between those present, but among absent parties during the time of normal expectation. (Cf. Colin and Capitant, op. c., II, p. 270 ff.). Observe, however, that a promise is not reputed perfect before it has reached the other party, so that by a telegram which arrives sooner, or even with letters which arrive at the same time as others containing the promise, the promise can be made null or be revoked.

Many also in the same way permit to the one accepting that, before the message has arrived, he may efficaciously revoke the acceptance. Otherwise one must say, of itself, if the contract is judged perfect from the acceptance once dispatched.

When absent parties make an agreement, the Austrian Code, § 862, saving an express stipulation, obliges the one promising to await within 24 hours the response of the other party who is in the same place; but if he is in a different place, for twice the time necessary for sending the response. But the Brazilian Code (1081-1086); the German (130 and 145); the Swiss (C. obl. 3-10) explicitly sanction the opinion which we were calling modern.

2. From what moment is a contract judged perfected?. Does it suffice for the perfection of the contract that acceptance has been made, or is it further required that it become known to the one promising; indeed, that it be suggested or intimated to him by the one accepting or by a mandatary?

I. That merely internal acceptance does not suffice is clear of itself, since merely internal consent cannot change juridical relations of men.

But, from the law of nature, from acceptance expressly or tacitly manifested (which, among absent parties, can be understood of acceptance dispatched, e.g. through the postal service), a contract is of itself perfected. (Concerning this matter, Carriere, De Contractibus, I, 31-34.) Of itself, I say; for the parties can defer the mutual obligation, e.g. until they have signed the instrument. They will rather easily have this will if from the beginning they wished to write the contract. Wherefore the Code of Germany, art. 154, declares that in doubt parties who have agreed about drawing up an instrument are not bound before the instrument has been made.

II. What Positive Laws Establish. 1. In Latin law, at least of Italy and France, controversies are not lacking which ought to make a theologian cautious in responding. Nor do the laws themselves agree. Omitting, however, certain contracts for which, as for donation, in French law the intimation of acceptance is explicitly required, they are accustomed to distinguish unilateral agreements, which are perfected by acceptance (Pacifici-Mazzoni, IV, p. 161), and bilateral agreements, which are not judged perfected until the very intimation of acceptance has reached the one promising. In this matter they adhere to the opinion of C. de Lugo, Iust., d. 22, n. 27. The Code of Spain, art. 1262, explicitly establishes this. But one must also attend to commercial laws and usages, which are accustomed to order a more expeditious conclusion of transactions. By the Brazilian Code, a contract is perfected from the acceptance once dispatched; nevertheless a retraction is useful which arrives at least together with the acceptance (1086).

2. German law agrees with Brazilian law (130, 151); yet it explicitly excepts the case if there was a usage of notifying the acceptance.

3. By English law the signification of acceptance is judged necessary for perfecting the contract. Yet if the one offering has expressly or tacitly admitted that the other may accept through letters committed to the postal service, that service is considered as the mandatary of the one offering, so that from the moment at which the letters of the one accepting have been handed over to it, the contract is perfected; nor does delay of dispatch or loss of the letters affect the condition of the agreement. - 4. The same holds in the U.S.A., but one who offers orally is not judged to have given such a mandate to the postal service. Wherefore, then, the contract will be perfected only from the moment at which the written response has arrived.

A real contract, however (loan for consumption, loan for use, pledge, etc.), has its beginning from the thing handed over or the performance made. But even before this the promises of making a loan, etc., will be valid, if they are contained in a true agreement.

What Does Supervening Death or Incapacity Effect?. If either the one offering or he to whom the contract has been proposed, before acceptance, either dies or becomes incapable, what is the law concerning the heirs or concerning those who represent the incapable person?

From the law of nature, the heirs of the one offering, no less than the one offering himself, can revoke the proposed contract. But what they have done expressly or tacitly must be examined. From the intention also of the one offering one must estimate whether the heirs of him to whom the matter had been proposed can perfect the contract by their acceptance, or whether the transaction must be wholly begun anew.

The canonical Code establishes nothing expressly concerning the matter. Therefore we are sent back to the law of nature and, according to c. 1529, to the civil law in force in the region where the question arises. Civil positive laws which deny that an obligation flows from the promise itself, as such, will generally establish that the transaction is ended by the death or incapacity of either party: thus Pacifici-Mazzoni, IV, p. 160, respond concerning Italian law; while by the Code of Germany, acceptance is not impeded of itself by the death or intervening incapacity of the one offering (i.e. unless a contrary will of the one promising is demonstrated).

Corollaries for Conscience.

1. Credence will have to be given to the party who wishes to use a positive law by which retraction is permitted or denied. Cf. also Ball.-Palm., Op. theol., III, 639.

2. He who by letters offers something, even by a gratuitous title, if he explicitly or implicitly awaits a response, is not judged to have wished to oblige himself before it is certain to him concerning the acceptance (Ball.-Palm., III, 638).

3. Since a contract is of itself an act concluded between the parties, if either party, unfaithful, contracts with a third party, he will be able to use a positive law which confirms the later agreement.

4. Goods which are publicly available for sale in shops are judged to be perpetually offered for the price indicated there. Wherefore a buyer entering the shop has a right that the goods be handed over to him for the proposed price.

It is not so certain that the same must be said about notices by which books or instruments are offered for a definite price, so that a contrary notice would not be sent usefully except before acceptance. Therefore in these matters one must act cautiously.

5. Although certain authors, especially before the Code, said that promises or donations made to a Church or to a pious cause were valid before acceptance, the contrary opinion, already before the Code, was more probable; and this holds much more now, since civil laws concerning contracts can of themselves be applied in ecclesiastical matters. Wherefore he who, before acceptance, has revoked a donation of this kind will practically be held to nothing.

What if the promise or donation is made immediately to God for a Church?

God is not for that reason judged to have wished to have the thing in His dominion as a man would, but a promise or offering of this kind is valid as a vow; nevertheless, before acceptance, this vow is not reserved, since there is no acquired right for anyone. Cf. Ball.-Palm., III, 634, who adds that donations of this kind in doubt are judged to have been made to God.

Three defects of consent are customarily enumerated: error, fear, fraud. (For the notions, cf. I, 54 ff.; 78 ff.; 86.) To these the effect of lesion or damage can be added by way of appendix. Concerning each briefly.

I. Concerning the Defect of Error. 1. How manifold error is distinguished. a) Principle. Consent is especially vitiated by error, so that of itself, as it were in the first sign of reason, every error by which consent has been determined invalidates the contract. For it takes away the voluntary, and a contract is a voluntary exchange of rights. Yet the very security which a contract ought to give to each party forbids that every error be attended to; so that the contracting parties are judged, by a virtual ratification, to renounce the benefit of many errors, and they ought to renounce it. Which errors are to be considered, and which are to be neglected, we are taught by various distinctions.

b) Distinctions. Substantial and accidental error are distinguished. The former affects the essence of the contract: whether its nature (a donation instead of a sale), or its cause (you return money as if received in a loan, and it was not given as a loan), or its object, which, of itself or because of the definition of the parties, is essential. Wherefore a quality which is principally intended pertains to the essence so understood (it is said to redound into the substance). Thus if you seek wine for sacrifice, aptitude for sacrifice will be essential. Another error is accidental. Yet it can give cause to the contract, if without such error consent would not have been given.

2. What error effects of itself. Substantial error of itself annuls the contract; not likewise accidental error (even if it gave cause to the contract), unless consent has been expressly or tacitly subjected to the quality which is falsely thought to be present, as to a condition without which not (I contract if such a quality is had).

Yet if that error gave cause to the contract, and flowed from the deceit or fraud of one party, the other party can rescind the contract at his own choice.

Indeed, even if no fraud has been committed, as soon as error was truly the cause of contracting, Lessius, Iust. c. 17, n. 33, and St. Alphonsus, L. 3, n. 715, give to the party who erred the power of withdrawing from the contract, provided, as Genicot, I, 589, III, aptly adds, that he keep the other party unharmed.

If the error was vincible, the damages thence arising will have to be repaired according to the degree of fault.

3. What error effects from positive law. Positive laws by no means ignore the distinction of substantial and accidental error, but describe it variously, and because of substantial errors they render the contract void either by full right or at least after the sentence of a judge. But modern jurists are accustomed to distinguish an error by which all consent is so excluded that the contract is absolutely null, as if one party thinks that he is receiving as a gift what the other wished to yield only for a price (error in negotio); an error which begets only relative nullity, which is pronounced or admitted by the authority of a judge, as if there is error in a quality altogether necessary for the destination of the thing; and an error with which the contract subsists. Cf. e.g. Colin and Capitant, I, 68; II, 277 ff. For the most part the error of one party suffices for invalidating the contract; yet it happens that only mutual error is attended to from equity, or that rescission is not granted to the one erring except with the obligation of paying the damages which he has brought upon the other party by erring rashly. (Cf. Pacifici-Mazzoni, II, § 137; IV, 49-54.) Some errors, especially errors of law, will seem less excusable to the judge. In the U.S.A. an error concerning the law of a foreign nation is equated with an error of fact.

Concerning error, canon 101 establishes these things: "Error renders an act void, if it concerns that which constitutes the substance of the act or falls upon a condition sine qua non; otherwise the act is valid, unless something else is provided by law; but in contracts error can give place to a rescissory action according to the norm of law."

Of what law? Of the civil law in force in the region, unless we are mistaken, because of c. 1529, by which, in ecclesiastical matter, those things are said to be observed, unless divine law or a different disposition of canon law stands in the way, which the civil law establishes in the territory. But before this canon 16, § 2 warned these things: "Ignorance or error concerning a law or penalty or concerning one's own fact or concerning a notorious fact of another, generally is not presumed; concerning a non-notorious fact of another, it is presumed until the contrary is proved." Yet these things do not directly regard contracts. It also helps to recall this from the law of the U.S.A.: if, because of mutual error, or the fraud of one party, the contract does not agree with the true intention of the parties, the tribunal will, from equity, reduce the contract to the true intention of the parties.

What the individual civil laws have disposed concerning the effect of error does not seem to be ours to pursue at greater length ¹. The chief point is that we keep these few things in mind for conscience. It is lawful to estimate the effects of error according to natural law. It is also lawful for him who is not guilty of blameworthy fraud to use the protection of civil law, whether for invalidating or for confirming the agreement. And the sentence of a legitimate judge must be obeyed.

¹ Cf. e.g. the French Code, 1109-1110; Italian, 1108-1110; Austrian, 871-875; Swiss (Code of Obligations), 23-26; Netherlandic, 1357, 1358, 1485; Portuguese, 656-665; Brazilian, 86-91; Code of Germany, 119-122. Notable is this provision of the German Code: that damage must be repaired by him who erred to the other party who was without fault and suffered damage thereby (art. 122).

II. Concerning the Defect of Fear. 1. Distinction. A contract is said to be made from fear, if without fear there would not have been agreement; it is made directly from fear, if fear has been instilled in order to extort consent; it is made indirectly from fear, if fear has been introduced for another end, so that the contract in itself is just ¹.

2. Effects, with the law of nature considered. Omitting fear which so disturbs the mind that it takes away essential deliberation, and fear from within, or from without but just, by which a contract is not vitiated, all first oblige the author of unjust fear to repair damages. Then, if the contract is made directly from fear from without and unjust, some now permit him who has suffered fear to rescind the contract, provided the fear was comparatively grave (with respect to the trembling person), or, if light, nevertheless gave cause to the contract and there is question of a gratuitous contract or one which, like betrothal, requires greater liberty. They establish this from equity. Others deny that the contract is invalidated, unless the other contracting party was himself to be blamed for the crime, at least as an unjust cooperator. If he was to be blamed, they make the contract rescindable at the will of him who has been affected by fear; indeed some, at least, make it null, provided the fear was at least comparatively grave. - Fear which was neither a sufficient nor a necessary cause of the contract does not vitiate it, but obliges to repairing damages. - Finally, if a contract is made indirectly from fear, the contract is not rescindable unless the other contracting party was to be blamed.

Those solutions rest upon this principle, that the voluntary is not taken away by fear; but that equity requires that the juridical effects of an unjust action, as far as can be done, be restricted.

3. Positive laws.

a) What fear effects in canon law, we said in I, 81-84. Here it will be enough to recall that a vow emitted from grave and unjust fear is invalid; likewise a renunciation of an office or benefice made from grave and unjust fear; a marriage which someone had to choose in order to free himself from grave and unjust fear; admission into the novitiate and religious profession made from grave fear. Cf. c. 185, 542, 1°; 572, § 1; 1307, § 3. Nor is the obligation of celibacy and of the canonical hours contracted by him who, compelled by grave fear, received a sacred order, unless, with the fear removed, he ratified the ordination (c. 211, § 1).

b) Latin civil law. The Italian and French Civil Code render contracts entered from respectively grave and unjust fear null or rescindable. They do not attend to the person who brought in the fear. Nor do they judge reverential fear grave of itself. Cf. art. 1108, 1111-1114 Cod. Ital., 1111-1115 Cod. Gall. Similar are the laws of Latin America, e.g. the Brazilian Code, art. 98-101; Portuguese Code, art. 666; the laws of the Netherlands (1359); of Switzerland (Code of Obligations, 29). Yet this Code, if the other contracting party was in no way to be blamed, obliges the party who suffered fear and wishes to withdraw from the contract to keep the other contracting party unharmed. But the Austrian Code (870-875) does not invalidate a contract made from fear, if the other party neither was an accomplice nor manifestly ought to have known the force inflicted.

c) The Code of Germany, omitting the distinction of grave and light fear, grants to those who have suffered fear an action by which, within a year, from a judge, if he estimates that the parties were moved by unjust fear, they can obtain the nullity of the act (arts. 123, 124, 318).

d) In the U.S.A. contracts from fear (duress) are rescindable.

e) By English law, contracts are rescindable at the will of the party who suffered fear, if the fear was instilled by the other party acting or as accomplice. If the other party is not to be blamed, attention is paid only to fear by which reason is disturbed. Contracts which favor the party having authority over another can, when this other petitions, be annulled, unless the father or Superior or physician, etc., demonstrates the full liberty of the other party.

¹ E.g. in order to placate a father, gravely offended and threatening on account of another matter, someone offers himself as spouse to the daughter.

III. Concerning the Defect of Fraud. 1. Notion. Labeo defines fraud: every cunning, deception, contrivance employed to circumvent, mislead, or deceive another (l. 1, § 2 D. De dolo malo, IV, 3).

2. Effect from the law of nature. Fraud does not touch a contract unless it begets error; then at least it induces the obligation of repairing damage.

3. Effect from positive law.

a) Canon law, c. 103, § 2, establishes concerning fraud the same thing as concerning fear.

b) Latin civil law. The Austrian Code (871-875), adhering to the law of nature, establishes concerning fraud in proportion to the error effected and to the other party being blameworthy.

By Italian law (1115) and French law (1116), fraud renders an agreement null when the other contracting party is to be blamed, and it gave cause to consent. In juridical acts which are not bilateral, e.g. in acceptance or repudiation of an inheritance, they admit that an act is vitiated by determining fraud, whoever is guilty. If both parties have used fraud of the same efficacy, "fraud is compensated between each party." (Colin and Capitant, I, p. 70; Pacifici-Mazzoni, II, § 138.) Similar things are had in the Swiss Code of Obligations, art. 28; of Holland, 1361; and in the laws of Latin America. Yet attention must be paid to whether or not fraud effected by either party is required.

For art. 969 of the Code of the Argentine republic bears this: "Fraud affects the validity of acts inter vivos, whether it was effected by the contracting party or by a third party."

Therefore observe that because of grave fraud a juridical act can be invalidated even if no substantial error has been admitted.

c) The Code of Germany establishes concerning fraud the same thing as concerning fear.

d) In the U.S.A. the right of withdrawing from the contract is granted to the party who has been deceived by the fraud of the other party.

e) The law of England gives the option of nullity to the party who has been induced to contract by the fraud of the other. Indeed, in certain contracts which are called of the utmost good faith (e.g. insurance, sale of land, attribution of shares of an industrial society), mere concealment or reticence concerning a notable matter, which the other party had a right to know, confers the faculty of rescinding the act (Slater, Manual, I, p. 482).

Concerning Lesion. 1. From the law of nature. Lesion, or the damage which a contract brings upon another, easily follows error, but does not constitute in itself a defect of consent.

2. From positive law, can. 1681, § 2, an action for two years is granted to him who has suffered from a contract a grave lesion beyond half by reason of error, for obtaining rescission of the contract. - Civil laws often are silent concerning lesion, or, in only a few agreements, especially in sale and division of inheritances, grant rescission, because of enormous lesion, for some time, in favor of the seller or the heirs. In the law of the U.S.A. lesion is not of itself a cause of rescission. Yet in a case of extraordinary damage, joined with the miserable condition of the injured party, the judge will be able, from equity, to grant rescission.

— Natural reason counsels that an equitable interpretation of contracts is to be made, and the laws confirm it by their sanctions. Wherefore more than the letter, the intention of the parties must be attended to; - those making agreement are judged tacitly to have admitted whatever things, according to usages or laws in force, individual contracts carry with themselves: whether they knew them, or at least foresaw in a confused way that consequences of this kind pertain to the legal ambit of the contract: thus the obligation of providing eviction, which holds the seller; - because laws are more inclined to loosening than to binding, in doubts, regularly one must respond for the debtor against the stipulator. Cf. Cod. Italicum, art. 1131-1139; Gallicum, 1156-1164; Germanicum, 157, 242.

I. Who Are Obliged. 1. Contracts of themselves oblige only the contracting parties and those who hold their place: representatives and successors. - Yet an obligation can be strictly personal, which does not pass to heirs. That which passes is called real, and affects the patrimony. By the law which we use in Belgium, France, and Italy, any leasing of labor, and the obligation of a contract of society and mandate, is judged personal.

2. When a contract transfers the ownership of a thing, from it there follows for all a general obligation of preserving to each one his own. Nevertheless, a third party who in good faith receives from a donor or seller a corporeal thing or an anonymous title promised to another but not yet handed over, is preferred to him; and a contract concerning an immovable thing, before its registration, effects nothing except between the parties. Thus modern laws are accustomed to establish.

II. From what moment. The obligation arises from the moment at which the contract is perfected (cf. above n. 419). Although, however, a consensual contract is perfected from the moment of consent given and accepted, even before a writing is drawn up for proof of it, nevertheless the parties can defer the mutual obligation until that writing. Therefore one must see whether or not they wished to contract before that. In doubt one must respond rather for liberty. And when the instrument has been made, the obligation must be estimated rather from the instrument than from verbal declarations which were made before or afterward. Indeed, the Austrian Code, § 887, orders these to be disregarded.

I. Concerning an Added Condition. 1. Notions. Contrary to other stipulations often added to contracts, a condition affects the very substance of consent. For this is the intention of the parties, that they subordinate a juridical change, which is the object of the contract, to some future and uncertain event. Yet the contract itself is perfect; neither party, against the will of the other, can withdraw from it, or make worse the conditional right acquired for the other. Often, though not always (as if you have promised money to someone if he is reduced to poverty), it contains a virtual promise of not impeding the effect. A properly so-called condition signifies a future and uncertain event; and it is suspensive, if the obligation depends upon it; resolutory, if the extinction of the obligation depends upon it. Suspensive: I will give you one hundred if you obtain the prize; resolutory: every year I will pay you one hundred unless my revenues have decreased below ten thousand. - It is called casual when its fulfillment is not in the choice of the one making agreement; to this is opposed the potestative. It is purely potestative: if I shall will; simply potestative, when it is necessarily bound to the voluntary deed of the one making agreement: if I shall have gone to Paris; mixed, when its effect depends both on the will of the contracting party and on the will of another person: if I shall have bought such a house. - A possible condition is one which can be done physically and juridically. Otherwise it is impossible. A condition concerning a forbidden thing is impossible when made in such a way that from it the agreement becomes one of base cause. Here distinguish a reward promised for sin and a penalty promised after sin.

In broader usage a condition signifies a present or past fact unknown to the parties, or even a future certain fact.

2. Effects. a) A purely potestative condition effects nothing. - b) A condition concerning a present or past thing immediately destroys or firms the obligation. - c) A condition concerning a future necessary thing, of itself, is held as not added. Sometimes, however, from the intention of the parties, it will have force as a day. "If father shall die" often signifies: "after the death of father." - A condition concerning a base or impossible thing of itself invalidates the juridical act to which it is opposed. Nevertheless, if the parties were ignorant that the thing was impossible, and were so disposed in contracting that, with the error discovered, they would have contracted absolutely, the contract will be, in the internal forum, simply valid.

From Roman law the Codes of Italy and France borrowed the norm by which impossible or illicit conditions, added to testaments, would be held as not added (art. 849): which French law also extends to donations. But many modern laws have by no means imitated Roman law. Therefore one must see what the individual laws of the country establish concerning conditions which are judged illicit or impossible. Thus the Brazilian Code, art. 116, holds physically impossible conditions as not written, while it establishes that juridically impossible conditions invalidate the act to which they are added. Nor must one attend less to what conditions are held morally impossible: suppose the condition "provided that the widow shall not have contracted other nuptials."

The disposition by which a condition is held as not added can be observed in conscience, since the law can supply consent itself. Yet if the contrary mind of the testator is established, execution can probably be denied, as something commanded from a false presumption. - What has been said thus far holds in canon law, because of c. 1529. Yet the Code disposes special things, outside the matter of contracts, concerning conditions in rescripts (c. 39-41); in elections (c. 169); in election by compromise (c. 172, § 3); in marriage (c. 1092, 2319); in the resignation of a benefice (c. 1486); in foundations (c. 1492); in renunciation of a parish (c. 2150).

d) A properly so-called condition which is suspensive: before the event, suspends the principal obligation, obliges one to await the event and to abstain from acts which would render the object of the obligation impossible. Wherefore, e.g., a thing conditionally promised cannot be alienated absolutely. Nor can the event itself be unjustly impeded. Here the intentions of the parties must be consulted. He who has unjustly impeded the event is held for damages. - When the event has followed, the contract passes into the absolute. In some Codes, e.g. of Italy and France, it is then judged to have been such from the beginning, yet in such a way that the parties, by their mutual consent, can impede that consequence. But that retrotraction is by no means commanded by the nature of a condition. Wherefore the more recent Codes of Germany (art. 158) and of Switzerland (Code of Obligations, art. 151-156) did not admit it, so that the parties themselves must explicitly declare the will of retrotraction; nor by that will can they prejudice the rights of third parties (cf. Colin and Capitant, II, p. 164-167). - e) A condition which has been resolutory impedes no effect of an absolute contract; but when the condition has been fulfilled, the obligation is destroyed, and the contract is resolved as if it had not been. Therefore that condition suspends not indeed the first esse, but the resolution of the contract.

3. Fulfillment of a condition. Of itself a condition must be fulfilled in its proper species or form. An equivalent does not suffice, unless the mind of the one placing the condition bears a different interpretation. Thus once they judged the condition "if you marry" to be fulfilled if the girl became a nun. He who owes conditionally can remit the condition.

In our positive law, in bilateral contracts this resolutory condition is understood: "if the other party does not stand by his promises"; so that the first party can either urge the contract or juridically obtain its resolution from a judge (who can grant a delay) (art. 1165, Cod. Italicus; 1184, Gallicus). The Portuguese Code, art. 709, establishes the same; and the Brazilian Code, art. 1092, gives a similar faculty, yet conceived differently.

II. Concerning an Added Day or Term. 1. Notion. A day or term is a future and certain event (at least certain as to whether, although not always as to when), from which not indeed the obligation but the necessary execution takes its beginning, or after which it ceases.

2. Distinctions. There is distinguished a day from which and a day to which; a day established in favor of the creditor, in favor of the debtor, in favor of each. It is presumed to have been added in favor of the debtor. A debtor who does not pay when he ought is said to be in delay.

A day is established for ending and a day for urging the obligation, so that, when the day arrives, the debtor is not freed but is to be blamed.

3. Effects. A day does not render the bond itself uncertain or future, but merely influences the beginning or end of necessary execution.

4. Renunciation or loss. He in whose favor it was established can renounce the day. Indeed, sometimes it is lost by the law itself, and payment can be exacted before the day, as if someone is compelled to make cession in court.

N. B. - In no law, after the day has arrived, is the day judged to be drawn back to the moment at which consent was given. Wherefore laws which do not even in conditions admit retrotraction of itself equate the day from which with a suspensive condition; the day to which with a resolutory condition. Thus art. 162 of the Code of Germany. It also has, in arts. 186-193, norms concerning the computation of time which are sufficiently similar to the norms afterward added in the canonical Code, c. 31-35.

III. Concerning an Added Mode. 1. A mode is a certain burden or charge imposed on him who acquires a right from the contract. E.g. I give you a thousand, but you will take care that every year five Masses are celebrated for me.

2. The effect must be measured both from the mind of those making agreement and from positive law. For a burden can sometimes be constituted without obligation of conscience: "I give you one hundred, but for honorable recreation"; sometimes under the obligation of mere fidelity: "I give you one hundred, but you will study." When from the intention of beneficence something is promised or given, with a mode added which is for the utility of the promisee, he will for the most part be held by no obligation, at least of justice. - Sometimes there is a strict obligation of justice of observing the mode, yet in such a way that, when it has been violated, the principal stipulation nevertheless stands, and, for the mode neglected, satisfaction merely must be made. - Sometimes, when the mode has been violated, the principal act itself is judged to be revoked: then the mode ceases in a resolutory condition of the donation, legacy, etc. Cf. Molina, Iust., I, d. 208; Lugo, Iust., d. 23, n. 111. - One must see what the laws bear, what the parties wished.

An accessory mode which is base or impossible, unless it is imposed as a condition, considered under natural law, is held as not added, and the act is simply firmed.

This is very worthy of note for conscience: that a donation or legacy made under a mode which is not fulfilled can be valid, indeed of itself is not invalidated. This more absolute firmness distinguishes a mode from a condition.

IV. Concerning an Added Cause. 1. Notion. A contract is said to be made under a cause when the end on account of which something is given or promised is explicitly added: "I give you one hundred so that you may buy books, because you are poor."

2. The juridical effects are to be estimated as in a mode. The principal intention of the stipulator under the cause must be attended to.

Thus a prince who gives money to a servant so that the servant can sit upon a horse, if he sought for himself the adornment of a servant riding, will be judged to have obliged the servant to have a horse; otherwise if he wished merely to consult the convenience of the servant. Hence he licitly keeps for himself money given for taking a carriage for carrying on business in a distant place, who, depriving himself of that convenience, made the journey on foot. But the vow of poverty will stand in the way so that a religious, using similar reasoning, may not expend otherwise the money which he thus saves.

V. Concerning an Added Demonstration. 1. Notion. A demonstration is had when, besides the necessary indication of the object, a more accurate description of a quality of the thing, of quantity, is added. E.g. I sell you this field, which consists of one hundred jugera.

2. Distinction and effects. According to the mind of those making agreement, the description can be demonstrative or taxative. If it was demonstrative, neither will falsity harm the contract, nor must a defect be supplied or an excess removed. If it was taxative, the error at least must be corrected, or the contract falls, if from this it appears that consent toward the same object was lacking.

A designation is judged to have been made taxatively by him who promises the thousand francs which are contained in such a chest; but demonstratively by him who sells such a field and describes it as consisting of so many jugera. But attention must be paid to positive laws.

VI. Concerning an Added Disjunction. 1. Notion. A contract is made under a disjunction when some option between two performances is left.

2. Distinction. An option can be established in favor of the debtor and also in favor of the creditor. When it has been established in favor of the debtor, a facultative obligation must be distinguished from an alternative one.

3. Effects. An obligation is called facultative when the stipulation was made concerning one thing only, but it is open to the debtor to substitute another in place of the thing promised. Then, when the promised thing perishes, without fault and delay of the debtor, nothing is owed.

When a disjunctive stipulation has been made concerning each thing, the obligation is called alternative. Then the obligation is not destroyed unless both things have perished, without the fault of the debtor and before he has been in delay. Nevertheless, in a gratuitous promise, as also in a vow, the destruction of one thing can render the execution of the contract or vow grave or burdensome, so that the one promising can withdraw from the contract. If the option has been established in favor of the creditor, when one thing perishes, the creditor can of himself seek either the other thing or the price of the thing which has perished.

The debtor will have to repair damages for blameworthy delay according to the general rules.

VII. Concerning Added Confirmations. To strengthen the force of agreements, principal stipulations are fortified either by a promissory oath, or by a penal clause, or by earnest money.

1. Concerning the promissory oath, treatment was given above, n. 193-204.

2. A penal clause, or penal mode, or stipulation of a penalty, can be added to a contract: a) to urge its execution, although no damage arises from delay or omission; b) to estimate beforehand and by mutual consent the damages which either defect of execution or delay are foreseen to bring.

A penalty of the former kind is not contracted without fault: and indeed theological fault, unless the parties have disclosed another mind. According to the more common opinion, it is not owed unless it is sought, and some permit payment to be deferred until the sentence of a judge.

The other penalty, if it appears moderate, is owed in conscience as often as damages would have to be repaired; nor must one now attend to the damages truly following, since an aleatory estimation has been made.

If it was promised for omission of execution, the creditor can urge execution in place of the penalty.

3. Earnest money designates certain things handed over by one party to the other on the occasion of some contract, whether as proof that the contract has been made: probatory earnest money; or for firming its obligation by the sanction of losing the earnest money: confirmatory earnest money; or for giving place to repenting and withdrawing from the contract: penitential earnest money.

— The following extinguish an obligation from a contract:

I. Payment of the debt. 1. What it is. Payment, here generally, signifies the performance of every thing owed, or the execution of an obligation, while more strictly it is the payment of money owed.

2. Who can pay. Payment supposes a capable debtor. When there is question of a thing to be rendered, the one paying must be owner of the thing and have capacity for alienating it. The handing over of another's thing is, of itself, absolutely null (saving what was said concerning acquisition through possession in good faith, from positive law); handing over made by an incapable person is relatively null, as we indicated above in n. 415.

But any capable person whose interest is involved can pay: e.g. the buyer of a house subject to a hypothec, a surety; indeed any other person, if there is question of a performance sought without regard to the person.

3. To whom payment is to be made. Payment of itself is to be made to a capable creditor, such as a minor by age is not, or to the person who represents the incapable person. And, in French law, payment made to a minor by age is simply null, without consideration of lesion. Laws also define how acceptance of payment can be imposed upon an unwilling creditor.

4. What must be paid. That which is owed must be paid. And indeed: a) saving a peculiar stipulation, the whole at once, not by successive parts. Yet there are exceptions to this rule. Thus, in French and Italian law, when an inheritance is divided, debts are divided among the heirs, who therefore will individually have to pay only a part of the debt; by compensation (of which presently) part of the debt can be extinguished; finally the judge himself can prudently grant to the debtor the benefit of partial execution. Cf. Colin and Capitant, II, p. 76 ff.; Pacifici-Mazzoni, IV, p. 530 ff.

b) The performance must be, according to the nature of the thing and of the contract, of the promised quantity or of the promised value. When money is to be paid, positive laws are accustomed to establish that the sum owed is to be counted out either in metallic money, or in "values" which the law has equated with money. Observe, however, concerning metallic money, that coins below 5 lire are so struck (lest they be too easily transferred elsewhere) that the true value of the metal is far surpassed by the nominal value. Wherefore the creditor cannot at all be compelled to accept in payment, beyond the sum defined by law (suppose 5 or 50 lire), money of bronze or nickel, indeed silver coins of one or two lire. Values which are equated with money are customarily banknotes; sometimes also, as in Italy, titles of public credit.

5. The modern difficulty. But today, in more than one region, the right of demanding immediate conversion into metallic money, which is written on the notes (pagabile a vista, al portatore), is suspended. A suspension of this kind completely changes the nature of the note: previously it represented true metallic money and possessed its value, indeed not rarely, because of facility of transfer, it became of greater value than metallic money; now it represents a credit forcibly conceded to the State by all who possess banknotes. But the value of credit is measured by the confidence which the debtor enjoys. This already is diminished because of the coercion itself. Add the faculty which the State has of infinitely increasing its debts by multiplying banknotes, so that soon the true value of those notes clings far below the value written on them, while before it agreed with this value. In a word, a debt-note "to the bearer" has become money properly so called, but paper money.

In this state of things, a grave question of conscience arises: whether or not it is lawful to extinguish true debts by counting as true the nominal value written on the banknote. If the law permits this to be done, does conscience also permit it?

Concerning this matter these things seem to us to have to be said.

1. If the debts were contracted recently, an affirmative response can easily be given, since the debt is paid in the same circumstances in which it arose. Therefore there is no one for whom there is cause of complaint.

2. Bankers and money-changers, since in their daily business they must receive payments made according to the norm of law or nominal value, can also in paying their own debts stand by positive law. Otherwise they would fall into certain ruin. Wherefore that mode of acting is conceded to them by the common estimation which governs and defines just prices.

But what of private men?

a) First of all, in the prices of all things increased today, one must separate the increases which are to be attributed to the true dearness of things and the increases which are to be attributed to corrupt money. We are concerned only about the latter increases. For although, because of the greater dearness of things, the same sum of true money is less useful than before, nevertheless, considered from justice alone, a greater sum will not therefore have to be paid, because that circumstance is extrinsic to the money which is paid. Add that it is well enough known that prices not rarely vary, so that, in making agreements, the parties have tacitly admitted that risk; and besides, in daily business, most people in selling things or in leasing works find a source from which they compensate in some way for purchases to be made at a dearer price.

Nevertheless, deliberately we said, "considered from justice alone." For equity and a grateful mind sometimes will persuade one to act in a different way. Suppose someone who, with a beneficent intention, bought the house of religious punished with exile, at the same time promising the religious that if it should happen that they return to their fatherland, they could buy back the same house for the same price. Will it be consonant with equity and gratitude that the religious recover their house by handing over to the benefactor money whose present utility is greatly diminished?

Indeed, in cases of an unforeseen and excessive variation of price, natural justice itself can require that either the contract be rescinded or, whether by friendly settlement, or even by the authority of a judge (if the law permits this to the judge), be reduced to equity.

b) But, now neglecting the consideration of the dearness of things itself, let us examine the more difficult case concerning paying a debt, e.g. concerning returning borrowed money in a region where already only paper money has been accustomed to be handed over, while the debtor had received metallic money or something equivalent to it.

If between metallic money, e.g. gold, and paper money, the difference is not excessive, the law can consult common peace and facility of commerce by establishing a plain rule of payment according to nominal value: public utility can be purchased by some private detriment. But beyond certain reasonable limits, this power of law does not seem to be extended. For no more than by the law of prescriptions could the legislator, as it were, reward bad faith, can he by rules of payment despoil citizens of their goods. Nor could the mind of the legislator have been that he who gave money of true value must be content by receiving paper money which morally has no value, as happens today in several regions.

But between cases in which the value has decreased almost to nothing and cases in which money has remained of the same value, there are several intermediate cases concerning which it will be less manifest what justice requires. That we may suggest some norm, this seems able to be established: the rule of natural justice must be observed, which obliges one to pay things of the same value, when payment of an old debt made according to nominal value would bring damage to the creditor beyond the fourth part.

Nor does it help to object that it can happen that the debtor is also a creditor to whom a lesser value is repaid by others. For it is not lawful for you to steal because you suffer theft.

Practically, however, account can be taken of those who offer the more benign opinion, at least when paper money retains a notable value. Then no obligation can be imposed as truly certain. But if someone should wish to pay a debt of gold money or its equivalent with money which today represents morally nothing, the inequity seems to us too manifest for it to be tolerated, outside extraordinary cases.

Finally, this cannot be passed over: laws concerning the payment of debts almost do not speak except about gold and silver coins, so that present-day circumstances seem by no means comprehended by the intention of the legislator. Hence those laws make less secure those who wish to use them for making extraordinary profits against natural equity.

II. Novation,. i.e. the transfer and transfusion of a prior debt into another obligation (L. 1. D. De Novat. XLVI, 2). It can be of threefold kind, according as the object is changed (instead of an ox, pay 400), the debtor (instead of Titius, Sempronius will pay), or the creditor (what you owe me, pay to Caius).

This is the effect of novation: rights and duties are to be measured from the new title which is substituted for the prior one. In a similar way, when a just sentence has been pronounced concerning a litigated matter, now the titles which came into controversy are not to be considered, but in their place the sentence has succeeded as the sole valid and efficacious title: the sentence has pronounced this as the law. Wherefore the sentence, as they say, effects novation. And in a similar way, when, because of an equal doubt of fact, we say that a thing must be divided between two who remain doubtful concerning their right, a certain principle of justice concerning the preservation of equality between persons eliminates and destroys the probable reasons because of which someone might say: perhaps one has less than what he ought. What is his own, neither more nor less, each obtains by force of a novation of this kind.

III. Remission of debt made by a capable creditor.

IV. Compensation, "which is the contribution of debit and credit between themselves" (L. 1. D. XVI, 2). It is had as legal compensation when, because of a debt of a similar thing, liquid and demandable, by which the creditor is held, both debts are reputed paid. Facultative and judicial compensation will exist when, with some condition of law lacking, by private agreement or by the authority of a judge, there is made "a contribution of debt to debt and a comparison in the force of payment" (Calvin's Lexicon).

V. Confusion, which is had when one and the same person would have to sustain the person of creditor and debtor: e.g. if the debtor becomes heir of the creditor. For no one can owe anything to himself from justice.

VI. Loss of a certain thing which is had. Of a certain thing, I say; for a genus never perishes. If the thing perished by the fault of the debtor, or if the debtor was in delay, or if he contracted an obligation of standing for a fortuitous event, often, at least from positive law, damages will have to be repaired.

VII. Rescission of the contract.

VIII. A resolutory condition which has arrived. Then things are restored "to the state in which they were before," as if the obligation had never existed.

To this pertains the option which positive law gives in bilateral contracts, against the party which has not stood by its promises, as was said at the end of n. 428.

IX. Liberative prescription. Cf. above, n. 400 ff.

N. B. Sometimes causes exist on account of which, whether from the law of nature or from positive law, execution can not indeed be omitted, but deferred. Cf. what is to be said concerning restitution.

You ask what is effected by circumstances which, beyond expectation, have arisen or have ceased?.

These demonstrate an error of precision. Wherefore the things said concerning error can prudently be transferred here.

Standing by the law of nature, if the cause is intact, or if damages are repaired, revocation of consent can be admitted where the circumstances reasonably have force as tacit conditions, or where the false foreseeing of them at least gave cause to the contract. A gratuitous contract will be dissolved more easily than an onerous one. Yet betrothal, which ought to flow from mutual love and prepares an indissoluble bond, requires easy retraction because of circumstances, although it is an onerous agreement.

On the contrary, consent into a contract by which a state firm and perpetual of itself is introduced is judged to be especially absolute.

But carefully distinguish the will which now is changed from the will which never would have been if such a thing had been known or foreseen. A present change of will is juridically inefficacious. Cf. Lugo, Iust. d. 22, n. 90.

From positive law, changed circumstances effect nothing of themselves, if you except donation, as will be explained in its proper place.

Article II. - On Various Contracts in Particular.

The very frequent use of promises, and the multitude and variety of doubts to which they give place, show how necessary it is that the argument concerning promises be truly familiar to moral theology. Wherefore an accurate exposition of it is demanded by the very intention of our writing.

I. Preliminary Notions. Three things, in the first place, are to be distinguished: a resolution, a promise of fidelity, a promise of justice or contract of promise. A resolution is merely a decree of the will by which, with respect to another, nothing has been taken away from the freedom of the will; a promise, an obligation having been undertaken with respect to another, differs from a resolution. But to another there can merely be pledged fidelity, or a right can be conceded to the promised performance. Fidelity, here, means the quality which makes a man worthy to be believed and trusted. He who pledges fidelity wills that the other to whom he promises believe and trust him: then commerce among men, which rests upon mutual fidelity, requires that the one, by carrying out what has been said, avoid the deception of the other. This is the obligation of fidelity, which is not grave.

But he who concedes a right to another has alienated his own liberty, i.e. he has permitted into another's hands the liberty of doing otherwise. This is the obligation of justice, to which satisfaction must be made, by execution of the promise, under grave or light obligation, according to the capacity of the matter and the intention of the parties.

But there can be promised an act or an omission, or a thing. Hence promise is distinguished as personal and real. A personal promise is of one's own act; a real promise is of a thing, or even of an act with respect to which it does not matter by whom it is performed.

II. Definitions. 1. A simple promise can be described in a confused way as: a deliberate declaration, made to another who knows and does not resist, of a gratuitous performance useful to the other.

We call the description confused, because it does not distinguish the contract of promise from a promise obliging from fidelity.

It must be deliberate, because, as was said concerning a vow, n. 209, a semi-deliberate promise induces no obligation: that deliberation is required which is sufficient for sinning mortally.

To another who knows: as long as the other is ignorant, not even an obligation of fidelity has been undertaken. For this obliges one not to deceive the other; but he who is ignorant of the declaration can suffer no deception from a changed intention.

And not resisting. For he who positively refuses the declaration expects no execution, and therefore cannot be deceived.

It is called gratuitous, insofar as it is not made because of another's promise or debt.

Useful to the other. For the law of nature itself, by its positive prohibition, invalidates a promise harmful to another; and it does not sanction one that is wholly futile.

Among harmful promises we must place also dishonest and illicit promises.

But it is repugnant to the divine holiness that it acknowledge a bond of iniquity.

Indeed, a prodigal promise, as such, is judged so illicit that it probably does not oblige (St. Alphonsus, L. 6, n. 851, against Lugo, Iust. d. 18, n. 60. 61).

Standing by the law of nature, the other to whom the promise ought to be useful can be the contracting party or even a third party. For the bond of charity effects that what is done for my neighbor ought to be judged as done also for me.

The promised performance can be real or personal.

2. The contract of promise can be described as: a deliberate and gratuitous concession of a right, made to another accepting, for obtaining a useful performance. For by contract a right is transferred. But because no one acquires a right except willingly, the obligation does not arise before the other's acceptance. But when a promise made by letters is judged perfected, we saw above, n. 419. 420.

Positive laws, since they do not attend to the general bond of nearness, are not accustomed to sanction promises which are not useful to the other contracting party. But that utility can be created by an added penal clause or by a donation made to the promisor. Nor do laws directly consider a promise from mere fidelity.

III. The Obligation of a Promise. 1. As to the nature of the obligation: a) a strict obligation of justice is not to be presumed; it is more easily had in mutual promises and in written promises than in gratuitous verbal ones; b) if the execution of a definite promise, already at the very moment at which it is promised, seems necessary for avoiding notable damage, even a verbal promise will be judged to oblige from justice: as if you promise a determined sum for making some expense. But even then the force of the promise is reasonably, and rather strictly, to be taken. He who, for example, has promised definite money for the education of some young man, unless he has expressly promised more, is not judged to have bound himself to pay that money through several years (until the education is completed); c) a promise little defined, or one which can be a courteous response, will not oblige the promisor even under fidelity. Tanquerey, III, 678.

You will ask whether an obligation of fidelity can be converted into an obligation of justice by reason of damage that will follow from non-execution. There are those who seem to affirm this. But we think it must be said thus. Fidelity fictitiously given, with foresight of damage of this kind, would be a harmful act whose consequences would have to be repaired from justice. But if I sincerely interposed my constancy, the other who relies on it knows that I can change my intention without injury. If that harms him, let him impute it to himself, because he gave faith to me. My obligation is not changed on that account. But after I have changed my will, I shall be bound from justice to make the other more certain, if my silence would be the cause of a harmful deception. In this respect even the judge of the external forum can judge concerning a promise by which someone's mere fidelity has been pledged.

2. As to the gravity of the obligation, this of itself is light if the obligation is of fidelity; but even when it is of justice, they estimate grave matter as four times greater than grave matter of theft.

Only an obligation of justice permits occult compensation.

IV. Cessation of the Obligation. 1. Besides the general modes by which the obligation of a contract is taken away, it must be noted that the obligation of a gratuitous promise ceases because of an inconvenience on account of which, if it had been foreseen, the promise would not have been made. Here again, damages which perhaps will come to the promisee from this cannot be imputed to the promisor; yet it is equitable that, in weighing the inconvenience, he take account of the grave damage which the other will suffer.

2. When the promisee has died, the promise will be extinguished if the intention of the promisor regarded only the promisee; but the contrary, if he wished to be beneficent to the family itself. But when the promisor has died, a promise of a personal act has become impossible, and therefore is taken away. But a real promise, if it was one of justice, burdens the patrimony and therefore the heirs. Otherwise if it was one of fidelity, unless the promisor absolutely willed that the things promised be completed by execution. For then he is judged to have bequeathed the performance to the promisee, so that the heirs must fulfill the promise from justice. That legacy, which for pious causes could be valid because of canonical form, will nevertheless, from positive civil law, be invalid, unless it is contained in a testament of civilly suitable form, or unless the law itself sanctions transmission of the obligation to the heirs. Thus we said that what Lugo, Iust. d. 23, n. 98, says too absolutely, in our judgment, concerning the translation to heirs of every real promise, must be tempered.

How matters stand if, before the promise has been accepted, the promisor or the promisee dies, was said above, n. 421.

3. Concerning positive law we shall note only this, that in more than one law it is now sanctioned that a promise holds the one making the declaration even before acceptance. Cf. what was said above, n. 418; cf. also Pacifici-Mazzoni, IV, p. 252, note b), Colin and Capitant, II, 270.

Jurists also labor in explaining the certain obligation which promises made publicly through newspaper announcements or in a similar way, and also titles to the bearer, bring forth, because the declaration has been made to persons not determined. Cf. Pacifici-Mazzoni, IV, p. 78 ff.

The Brazilian Code assigns title VI to obligations which arise from unilateral declaration. Chapter I treats of titles to the bearer; chapter II of promised reward (cf. art. 1505-1532).

V. Corollaries. 1. Unless a promise has been made from justice, the promisee, neither while the promisor is living nor after his death, can satisfy himself secretly. If, however, the promisor has been overtaken by death after an absolute promise was made, the promisee who secretly took the thing promised to him seems able to be excused from restitution, on account of the probability which St. Alph., L. 6, n. 720, ascribes to an opinion of this kind. Cf. Aertnijs-Damen, I, 881. Yet the reason is not to be sought from this, that every promise would oblige from justice (which opinion St. Alph., l. c., undeservedly ascribes to Laymann), but rather because Lugo and several after him admit that the object of an absolute promise is virtually bequeathed by the deceased.

2. Let us not confuse a resolution with a promise; an intention of donating or bequeathing, with a donation or legacy. Domestic servants, not rarely, relying on certain benevolent words of their master, think that they have a right either of demanding from the heir, or of taking, what they were hoping to obtain by title of legacy. But unless the master by words formally or equivalently said, "this is yours," "I give this to you," he made no donation by which they acquired a right; unless he said absolutely "I will that after death such money or such a thing be yours," but merely spoke in this or a similar way: "I shall not forget you; you will be satisfied," they cannot rely even on an informal testament so as secretly to take something for themselves as remunerative. Wherefore a servant to whom the master has manifested an intention of a legacy has no right if the master, overtaken by unexpected death, made no testament. Nor is the heir bound to believe a servant affirming an absolute will of the deceased to donate or bequeath; indeed, since there is no question of a pious cause, he can neglect a legacy which is not contained in a testament of civil form.

Yet it would have to be said otherwise if the servant, relying on the words of the master, had asked for or accepted either no wage or only an unequal wage for his labor: for then the services were as if conditionally gratuitous. And it is altogether fitting that the heir, according to the presumed or at least reasonable will of the deceased, compensate faithful services with an equitable remuneration.

Concerning donation, the things which we warned above concerning a gratuitous promise hold: it is an argument concerning which the moral theologian is so often consulted that he ought to know it well.

I. Notions. 1. Definition. Donation is a gratuitous contract by which one person, the donor, from an intention of liberality, concedes to another, the donee, his own thing as to dominion, without any obligation of restoring.

It is a contract less properly so called, if you have defined contract in such a way that it must produce an obligation, and the law admits the translation of dominion by consent alone. For then donation transfers a right, but of itself begets no obligation except that common obligation of reverencing an acquired right. Wherefore in certain Codes, for example in the French (893) and Italian (1050), it is placed outside contracts.

By the concession of a thing already possessed by the donor, donation properly such is distinguished from various acts by which someone makes another richer, but without diminution of his patrimony, as for example through gratuitous renunciations, which are also called indirect donations. Cf. immediately below.

By the words without any obligation of restoring, donation is distinguished from mutuum, by which also one's own thing is handed over into dominion, but with the obligation of restoring it or an equivalent.

2. Divisions. According to its various cause, donation is distinguished as between the living and by reason of death; simple and allective or remunerative.

Donation by reason of death is a contract, revocable until death, by which only after the death of the donor is the thing assigned to the donee. Therefore it differs from a testament only insofar as it is a contract, and therefore must be accepted; but it differs from an irrevocable donation which someone dying has made to another; indeed from a donation between the living under a suspensive condition: if I die, or a resolutory condition: unless I recover health.

An allective donation is made under hope of another's action or performance. Yet it is absolute. Wherefore, when the hope has been frustrated, he can repeat nothing.

A remunerative donation has its impulsive cause in the good deeds of another. Wherefore it is commended by equity and is protected more by the favor of law.

According to external form, donation is distinguished as open and disguised under another onerous contract; direct and indirect; verbal or written and brevi manu.

When laws, as the French law, admit that for the validity of a disguised donation it is sufficient that the form of an onerous contract be clothed, the external appearance must be that of an onerous contract. Thus, he who merely writes on paper: "Let it be valid for one hundred francs" (bon pour cent francs), which he thus wishes to give, will make an informal instrument, since nothing is said about a burden; but, that he may satisfy the condition of form, this must be added: "I acknowledge that one hundred francs are owed by me to Titius." Cf. Colin and Capitant, III, p. 770.

Indirect donation takes place when someone gratuitously makes another richer otherwise than by subtracting a thing from his own patrimony. This happens by renouncing, in favor of another, an inheritance or legacy; by remitting a debt; by stipulating something for a third party; by transferring to another a title of credit inscribed in one's own name.

Donation brevi manu takes place when a movable thing is handed over gratuitously to another to be possessed, without a distinct agreement.

But observe that the delivery which is essential in donations brevi manu can be made formally or virtually, either by confirming the possession which the donee already had, or by pointing out the thing which is given, if it cannot easily be moved from its place, or by handing over the keys of the chest where it is kept; or by bringing it in some other way under the power of the donee (Cf. Aertnijs-Damen, I, 888, note).

According to various amplitude, donation is distinguished as absolute and conditioned; pure and mixed with a mode, or burden which is imposed on the donee.

II. Capacity and Faculty of Giving and Receiving Donations. 1. From the law of nature he validly donates who, master of himself, has or can have what he intends to give: he licitly donates who is moved by an honest cause, and, avoiding also a prodigal dissipation of his own thing, brings no prejudice to another's right.

Therefore a debtor cannot without injury make those donations by which he becomes unable to pay. He who has induced the debtor to make such donations participates in that injustice. But what concerning those who, conscious of the present or future inability of the debtor, have simply accepted those gifts? The matter is disputed. There are some, perhaps most, for example Aertnijs-Damen, I, 884, who forbid this, because they help the debtor in an unjust action. Yet, because the debtor remains master of his own things, because he has obligated his patrimony but not individual things to creditors, they seem merely to use another's sin for a gain honest in itself. They violate no right in the thing. Acceptance, as such, is not unjust. Nor do they have a positive duty of preventing the effect of an action begun, or of the sin of the debtor, which the debtor has already committed alone. Therefore they seem able of themselves to be excused. Nor, of itself, does charity stand in the way, which does not oblige with grave inconvenience. Thus Molina, Iust. d. 328, n. 15; Lessius, Iust. c. 20, n. 168; d'Annibale, II, 123.

Much less is someone prevented from receiving an inofficious donation, i.e. one by which the legitime of the children is injured. For as long as they live, parents are not bound from justice to observe that legitime; nor will they sin against piety itself, if they have a reasonable cause for neglecting it, especially since several laws constrain too much the liberty of parents. More severely, therefore, in our judgment, Aertnijs-Damen condemn for grave sin parents who gravely injure the legitime.

But creditors and children will be able to use the protection of civil law for impeding the effect of donations of this kind.

To guardians and prelates, from the goods which they administer, no bounties are permitted except moderate remunerative ones, and alms according to the faculties and nature of the community. And Constitutions are to be observed by prelates (cf. c. 537).

Nor can the husband alone make donations from common goods which by positive law are prohibited to him.

2. Capable of receiving donations is of himself anyone who is master of himself. And when there is question of pious causes, the capacity of persons is to be estimated from canon law.

III. No peculiar form is prescribed from the law of nature. Nor is delivery necessary. Yet the donation will not be perfected before it has been accepted.

St. Alphonsus, L. 3, n. 726, reports, from the Salmanticenses, that a donation made to pious causes or to the church by any private person can be accepted in the name of that cause by anyone; as if by one managing business for the church, as Aertnijs-Damen has it, I, n. 891. Yet we note that management of affairs has place only when the master himself cannot act by himself. Besides, in order that a donation can be accepted by someone in the name of another, it is necessary that the donor wish to conduct the business with that person. Wherefore it does not seem that someone can accept a donation in the name of the church except when the donor offers the thing to him to be accepted in the name of the Church. Such will be the case, for example, of a religious, or of a pastor, to whom something is offered gratuitously to be possessed with a view to religion or the parish.

Outline of Positive Laws. We are treating only of civil laws, because c. 1529 wills that, in ecclesiastical matter, with the same effects, those things be observed which the civil law in the territory has established concerning contracts, unless the statutes are contrary to divine law or unless something else is provided by canon law. But no special canonical disposition occurs except c. 1513, § 1: "He who by natural and ecclesiastical law can freely dispose of his goods, can leave goods to pious causes, whether by an act between the living or by an act by reason of death."

1. Notion of donation. The juridical notion of donation is circumscribed by the donation which we have called direct, so that, unless something else is expressly provided, peculiar dispositions are not to be transferred to renunciations and other indirect donations. That they might signify that limited notion, certain Codes have introduced the removal of a thing from the patrimony of the donor into the definition itself in this or a similar way: "Donation is judged to be a contract by which someone, with liberal intention, from his own patrimony, transfers goods or utilities to another accepting" (art. 1165 Brazilian Code). Cf. Code of Germany art. 516; Swiss Oblig. 239.

Moreover, when, as more often today, a real right is not transferred by consent alone, the contract of donation is rather a contract by which the donor obliges himself to transfer gratuitously to another something which existed in his patrimony. Thus, for example, in Holland. Cf. Duijnstee, n. 238.

2. Donation by reason of death is not acknowledged by most laws, whether they formally exclude it, as the Italian Code, 1050; French, 893; Dutch, 1703; Mexican, 2601; or assimilate it to a legacy, as the Austrian, 956; German, 2301; Spanish, 620; Portuguese, 1157; Peruvian, 628; or pass it over in silence, as the Brazilian, Swiss. - In the laws of England and the U.S.A. it is admitted.

3. Form of donation. Donation, in not a few laws, is a solemn contract, so that several require a public instrument: thus the Italian Code, 1056; French, 931; Dutch, 1719. But, provided the parties are capable, a donation covered with the cloak of an onerous contract is said to be valid. The Brazilian Code, 1168 compared with 131, requires writing, but it can be private, when movable things are donated or an immovable thing which does not exceed "one conto de reis" (a thousand thousand reis).

The form required and sufficient for donating movable things is also often delivery. Donations brevi manu are admitted indefinitely in France; in Austria, 943; in Holland, 1721; only those of moderate value, in Italy: which limitation is expressly had in the Brazilian Code, 1168. The German Code requires a promise of donation which has been made by public act (before a judge or notary), but in such a way that execution heals the defect (518).

4. Capacity of persons. Of itself, only the donee can accept a donation. Yet except persons who represent minors or those interdicted. Several laws, as we have already seen, permit even a minor to accept donations burdened with no obligation. The donee must at least be conceived; and if he is born not viable, the donation falls. Yet sometimes they permit a donation to be made to children to be born immediately from a living person (C. Ital. 724. 761). Besides absolute incapacities, relative ones are distinguished, for example between spouses, between guardian and ward, until accounts have been rendered. A notary cannot be the donee in the instrument which he himself writes (Cf. Cod. Ital. 771. 772). That incapacity is to be remembered by which, in some laws, for example in the French Code, 909; Dutch, 953; physicians, pharmacists, and ministers of worship (i.e. both the confessor and the one who confers the last sacraments) cannot receive donations or legacies from a person whom they care for, during his last illness, unless they are closely joined or unless the donations are remunerative. In several laws, illegitimate children, when they concur with legitimate ones, can receive nothing beyond what is destined to them by law. And the prohibition is more severe for spurious or adulterine children. - Finally moral persons, generally, cannot accept donations without the assent of public authority. Certain ones, however, for example syndicates, not rarely are treated more benignly. - But observe that, by force of c. 1513, the capacity of giving to pious causes is to be estimated from natural and ecclesiastical law.

5. Objects of donation. Generally, by acts between the living, future goods cannot be given. In the Brazilian Code a universal donation of goods is invalid unless the donor reserves sufficient sustenance for himself (1175).

6. Impossible and illicit conditions in the French Code, 900, are held as not written; while in the Italian Code, 1065, they invalidate the donation. Nor are the same conditions everywhere held as licit or illicit. In a peculiar way attention must be paid to conditions which regard the moral or religious order, as if instruction in a definite religion is required. A condition of this kind is sometimes inefficacious, sometimes valid, sometimes can be corrected by a judge.

7. Revocation. Of themselves donations are irrevocable. Yet causes of revocation are inserted in Codes. Most frequent is peculiar ingratitude; frequent also is the birth of children of a donor who had no offspring (This cause is not admitted, for example, in the Canadian Code Q.). In the Code of Germany, 528, supervening need of family property is also admitted. From revocations of this kind remunerative donations are customarily excepted. A clause is permitted by which, if the donee, either he alone or he with his children, dies before the donor, the gifts return to the donor (Italian Code, 1071).

8. Collation. In several laws donations made are judged as anticipated legacies, so that the capital donated must be counted in the hereditary mass. Cf. what is to be said where inheritance is treated.

Effect of Those Laws in Conscience. Those laws, insofar as they are just, oblige conscience, yet in such a way that until a judge has intervened, someone can give and receive according to the norms of natural law. Nor is he bound to disclose the things which he has received. Yet, when legitimately questioned, he is of himself bound to issue a sincere oath.

But what if a donation to pious causes is of a civilly unsuitable form?.

That there may be no occasion of confusion, we recall that here we are speaking not of testaments or legacies, concerning which one will have to speak differently, but only of donations which are made by contract. Therefore:

1. Because c. 1513 explicitly permits that those who have natural and ecclesiastical capacity leave their goods either by an act between the living or by acts by reason of death, nullity sought from the fact that civil law does not admit donations by reason of death does not seem able to be urged in conscience.

2. But because c. 1529 wills that, in ecclesiastical matter, those things be observed which the civil law in the territory establishes concerning contracts, we think, until no authentic declaration has intervened, that those cannot be disturbed who do not think themselves bound by a donation-contract in which the substantial civil form is lacking. Yet there are those who think that, from the mind of the legislator, what c. 1513 establishes concerning the capacity of persons can and must be extended to the form itself: this, in ecclesiastical causes, is to be estimated according to canon law. Cf. Duijnstee, n. 242.

N. B. Conditions of validity and juridical conditions of proof are to be carefully distinguished. In the forum of conscience a valid donation altogether exists, but one whose juridical proof is not had.

I. Notions. Commodatum (prestito di uso) is a contract by which some thing, as to use alone, is conceded gratuitously, for some certain time, explicitly or implicitly determined.

By precarium a thing is conceded for use gratuitously in the same way, but until the one conceding explicitly or implicitly asks for the same thing back.

II. Obligations. 1. The lender-for-use must hand over the thing affected by no harmful defect concerning which he does not warn the borrower-for-use. He must permit use through the whole promised time, and repay to the borrower-for-use expenses made from urgent necessity lest the thing perish.

If, beyond expectation, he himself needs the thing, from the law of nature he can prefer himself to the borrower-for-use in an equal cause. Several laws sanction this; but not rarely in such a way that the judge has discretion concerning the necessity that has arisen. Thus the French Code, 1889; Italian, 1816; Brazilian, 1250.

2. The borrower-for-use must keep the things loaned-for-use diligently as his own, bear the expenses of preserving the thing, employ the thing only for the use expressly or tacitly agreed upon; and at the end of the commodatum return the same thing with fruits and increments. Of himself he cannot give it to another to be used.

The obligation of answering for fault, both because of delay in restoring and because of violation of his obligations, is made stricter by positive laws, so that sometimes he has to answer for the fortuitous event itself. Thus the Code of France, 1882; of Italy, 1810; of Brazil, 1253, oblige him in a fortuitous event, if, in a disaster in which one or the other had to perish, he preferred his own thing to the thing loaned-for-use.

In French law, 1883; Italian, 1811, he is presumed to have undertaken the fortuitous event upon himself, if, at the beginning of the commodatum, the value of the thing was estimated.

Those obligations will bind conscience after the sentence of a judge. Beforehand, the general rules concerning answering for fault are to be observed. Cf. below, where delict and quasi-delict are treated.

1. On Mutuum. 1. Notion. Mutuum is a real contract by which dominion of some fungible thing is transferred from the lender into the borrower, with the obligation of restoring the same thing similar in species and goodness. If the contract is real, it has its beginning from the handing over of the fungible thing. But nothing prevents the parties from having agreed beforehand about making a mutuum: which would be a promise of mutuum.

What a fungible thing is was said in n. 384. But for the most part mutuum is made concerning things which are consumed by the first use; among which is money, which, although it does not perish in itself, nevertheless perishes for the one spending it; yet sometimes fruitfully.

Because dominion is transferred to the borrower, he himself sustains the risk of the thing: the thing perishes for its owner.

2. There is no special obligation of the lender: he merely must reverence the right in the thing which he conceded to another. Except in certain cases foreseen by the law itself, as if the debtor becomes unable to pay, he cannot demand payment before the time.

But, because the day is often constituted for the utility of both, he ought not accept anticipated payment.

At the end of the mutuum, the borrower must return the same thing in quantity or quality.

What if, meanwhile, the thing has increased or decreased in price? From the law of nature, the intention of the parties must be consulted. If the consideration of the matter was principal, i.e. if the thing was handed over and must be returned on account of its intrinsic utility, a quantity of the same measure and quality is to be restored or paid; if the contracting parties rather looked to the price, or were solicitous about the value, a quantity of the same price will have to be restored. Wherefore, as Aertnijs-Damen says, I, 905, money is to be returned according to the value which it had when it was given as a mutuum. What, then, if the civil law, as the Code of Italy art. 1821. 1822, or jurisprudence, as in Belgium and in France (cf. Colin and Capitant, II, 80 and 641), declares it sufficient that the same numerical sum be returned, neglecting consideration of value? We have examined and resolved the question above, where payment was treated.

But what if, when titles to the bearer were given as a mutuum, the law or tribunals permit titles of the same nominal value to be returned?

Because now there is another reason of possessing titles than money; because, from the beginning, it was known to the parties that titles sometimes increase or decrease very much in value, we think here that one can more simply stand by the statutes of positive law, since the parties are judged to have committed themselves to chance.

3. Positive laws agree sufficiently among themselves, when there is question of metals or merchandise, so that already from the very definition of mutuum they establish that it is required and sufficient that the same quantity, of the same species and quality, be restored.

Concerning moneys we confess that the laws do not seem to us so clear, if you except the Italian Code. Cf. the Austrian Code, 988, which nevertheless seems to establish the same thing as the Italian; Brazilian Code, 917 and 1258; Dutch, 1793; German, 211 and 607; Spanish, 1751 compared with 1170; Swiss, 312; Mexican, 2690, etc. Besides, they do not contemplate the case in which paper money has been substituted for true or metallic money. For between metallic moneys of one time and another, no great difference of value is to be feared.

4. The contract of mutuum is gratuitous by its nature; nevertheless present-day laws permit stipulations of interest or usuries to be added, concerning which immediately.

5. Obligation of giving money as a mutuum or a thing consumable by use. The necessity of neighbor can make grave, from charity, the obligation of giving a mutuum. Yet rarely will there be absent a grave inconvenience excusing; except if the other needs for a brief time money which he will easily restore.

This is the counsel of beneficence, that we distinguish the mutuum by which, for an upright and suitable neighbor, a way of exercising an honest and fruitful trade is prepared, and the mutuum which is given to a needy person who already seems to be an overburdened debtor. A loan prudently granted for the sake of a trade [OCR uncertain: the printed word before artis causa appears as invalidae:; context indicates a useful/productive trade] is to be placed among the best and most useful works of beneficence; but a mutuum given to an overburdened debtor usually profits only the creditors, and not rarely sows discord between the benefactor and the obligated person. Wherefore then it is better to bestow some lesser thing by title of open alms or under the color of a covered mutuum, than truly to lend money which, useless to the borrower, will with moral certainty perish for the lender.

II. On Usuries. 1. Notion. Usury, in the broader sense, is whatever, beyond the principal, is accepted by the creditor. In a stricter sense it designates an increment to be paid to the creditor after individual intervals.

2. Norms. Concerning this matter these things are to be held, which are proposed more fully in the Questions on Justice.

a) "No gain can be received by reason of the contract itself" (c. 1543).

b) It has always been lawful, when an agreement has first been made, to stipulate compensation for an extrinsic title. Several are numbered: emergent damage, ceasing gain (from lost possession of money), risk of the principal, or difficulty of recovering it, conventional penalty, and also, according to St. Alph., the long time for which the money is yielded.

c) But while the present condition of society perseveres, it is commonly lawful (and never contrary to commutative justice) to lend money under moderate interest. Wherefore today questions concerning personal census, concerning the triple contract, and concerning agreements by which disguised usuries were sought, are obsolete. Nor must one today dispute concerning the lawfulness of Mounts of piety, savings banks.

The reason is that today, on account of the general facility of doing business or of exchanging money into fruitful things, and the utility of economically securing credit for oneself, the very possession of money has a value which is compensated by interest.

The just rate of interest is to be estimated from the common rules of just price.

The common hope of gain which business in the region brings, after deducting the price of labor and industry which commonly must be applied to that gain, supplies an abstract norm of justice. The concrete norm is taken from common opinion, from the practice of the timorous in a definite society.

In the customary rate the ordinary risk of the principal and ceasing gain are counted. Wherefore, on account only of extraordinary circumstances of risk, emergent damage, etc., which are not otherwise compensated, a greater rate can be sought. But in circumstances which diminish the risk of the principal or the convenience of the debtor (as if he must, when asked, restore the money after a brief interval), the rate is justly diminished proportionally.

And when someone seeks money not from necessity but from hope of gain or because of positive utility, an increase of interest can be explained and made just by a certain tacit partnership.

Nor is moderate anatocism (usury of usuries) illicit of itself. By our law of Italy, of France, the parties can, for annual usuries already owed, obtain usuries either by a later agreement or by judicial authority (art. 1232).

Concerning moratory usuries, laws must be approached and the general principles concerning a penal clause must be applied.

3. The present-day character of sinful usury. The sin of usury by no means is banished from our societies. But, unless there is question of prodigal sons of families who hand themselves over without scruple of conscience into the hands of certain moneylenders, in several regions sin is committed not so much by open lending-at-interest as by hidden lending-at-interest. This disguised usury chiefly has place in sales with credit, i.e. in which instruments of labor or furniture are bought, with payment permitted by parts and after intervals. Then buyers, easily deceived by hope of credit, do not advert to the harder conditions which are imposed on them, or they think that they can satisfy those conditions conveniently. Thus it happens that by explicit agreement, unless partial payments were made on the stated days, they would give the seller the right of recovering the thing sold and keeping the moneys received. Yet there are, even in Europe, regions in which 20 and 30 p. c. are demanded as usuries. But outside Europe, for example in China, in the Indies, biting usury kills very many debtors, since not less than 60, 100, 200 p. c. are demanded. There indeed there would be place for those very severe rebukes of the holy Fathers of the Church which we reported in Questions on Justice, n. 359, ff. But this seems to us to be the sign of illicit usury, if so much interest is demanded in the region where the contract is made as generally cannot be obtained from fruitful businesses. For, according to the abstract rule of justice, interest ought to remain below that quantity, since the moneylender obtains interest for himself without labor. Another sign is had if debtors after some time are compelled to put their things up for sale. Exactions of this kind, in the first place, gravely offend charity. For it is better, if the debtor is not able to pay, to deny him the loan than, as the holy Fathers objected, to cover the greatest cruelty under the appearance of a benefit (cf. Questions on Justice, n. 359). But they are also opposed to justice. Nor should you object that because of risk of the principal a much greater interest can be sought. For moneylenders of this kind are accustomed by their unjust conditions to reduce the debtor to inability, so that then from the selling-off of his goods they may acquire a greater gain for themselves. Therefore by that faculty the very risk of the principal is abundantly compensated.

4. Positive law. 1. Canon 1543 has this: "In the furnishing of a fungible thing, it is not of itself illicit to agree concerning legal gain, unless it is certain that it is immoderate, or even concerning a greater gain, if a just and proportionate title supports it." Therefore legal gain is presumed just.

2. Civil laws. a) If you except commercial business, as in the Swiss C. (Obl. 313), they preserve this notion of mutuum, by which mutuum is of itself gratuitous: interest is not owed unless it has been promised by stipulation. - b) For a sufficiently long time the laws themselves established a maximum interest, beyond which interest could not validly be promised. Today almost everywhere it is lawful for the parties to agree concerning a greater interest. In France, however, there still theoretically remains the law of 3 Sept. 1807, which forbade that by private agreement heavier usuries than 5 p. c. in civil matter, 6 p. c. in commercial matter, be promised. But by the law of 12 Jan. 1886, that law was abrogated in commercial matter. Finally, by the law of 18 Apr. 1918, even in civil matter, the law of 1807 was suspended until the end of the war and for a space of at least five years from the end of the war. Yet most laws establish legal interest for this reason, that it may be defined what usuries sometimes must be paid without agreement, for example by a debtor in delay. But they think of checking excess in various other ways, for example by invalidating acts in which someone has abused another's necessity, levity, or simplicity so that he might make excessive gain (art. 138 Code of Germany); or by permitting that the debtor can pay the debt before the contracted day if interest greater than legal has been promised. By the Code of Germany, art. 217, already after six months he can return money accepted as a mutuum, if more than 6 p. c. has been demanded, provided that six months beforehand he has made the creditor more certain. In Italy the one who must pay beyond legal interest (4 and 5 p. c.) can do the same after five years. There also, for the validity of the obligation, interest greater than the legal must be promised in writing (1831). - d) Legal interest is for the most part contained between 4 and 6 p. c. Usually in commercial matter, legal interest surpasses legal interest in civil matter by one p. c. It is established, for example, 5 in civil matter, 6 in commercial matter. In the Brazilian Code, the rate 6 p. c. is placed without distinction. - c) Other laws (for example the Brazilian) permit anatocism, or usuries of usuries; others, more numerous, forbid that they be promised in advance, excepting current accounts (Conto corrente) in banking. Thus the Swiss C., 313. But either every year, or, as in the Austrian C., § 998, after two or more years, it is lawful, by a new agreement, to convert interest already owed into fruitful capital.

Penal sanctions also have been enacted in very many regions against excessive usuries: for example in the C. of Belgium and France, against those who are accustomed to practice those arts.

In England, after the laws against usuries enacted by Edward the Confessor were abrogated in the year 1854, a new law, of the year 1900 (Money lenders Act), opened recourse to tribunals, which can free debtors from that burden of excessive usuries.

In the U.S.A., legal interest varies (in 32 States it is 6 p. c.) between 5 and 8 p. c. In eight States no limitation is placed on agreed usuries, while in most there is established a maximum interest which can be demanded by agreement: i.e. 6 p. c. in 12 States; 7 in 2; 8 in 8; 10 in 12; 12 in 7; 15 in 1 State. Sanctions vary: here only the interest, there only the principal sum; there, in Arkansas and New-York, the principal and interest are lost by the exactors of excessive usury.

5. Remedies against mordant usuries. Laws have some efficacy; but morals have greater efficacy. It is especially useful that what, in a definite society, are sinful usuries be openly taught, and at the same time that institutions be established where useful moneys can be obtained at moderate interest: in this way the very occasion and temptation of abusing a neighbor's necessity are diminished. Thus, by the work of the Friars Minor, in the 15th century, there arose in Italy the so-called Mounts of piety for helping the poor, who had been oppressed by the exaction of the Jews, through mutual money to be given against a pledge accepted. The same religious keenly defended the disputed cause of the Mounts and prevailed in Lateran V (1512-1517), so that by Inter multiplices they were solemnly approved. Today almost everywhere these Mounts are found publicly administered. Although they must be called useful, indeed necessary, they do not escape every rebuke. The poor, not always upright and sober, deposit there even things necessary to themselves or to the family which had been given to them for personal use. After about a year, if the moneys have not been restored, those things are sold under the spear, often for an unequal price, so that the borrower suffers by greater misery than before. Besides, this defect is common to all "official" philanthropy: its ministers, hired for exercising that function, often lack the spirit which offices of charity require; and since they are obligated, they excite no grateful affection in the souls of the poor; nor do they know how to adapt their mode of acting to various cases.

Far more useful for society are funds, especially of private origin, which are established everywhere so that they may lend money for fruitful uses at moderate or at least not excessive interest. Therefore missionaries, in regions where voracious usury rages, should not neglect to warn neophytes concerning the crime; and by social institutions prudently erected they should strive to lessen and gradually remove the evil. In this way also they can wonderfully help the propagation of the gospel.

I. Notions. 1. Definition. Census, in general, is an annual pension, to be paid to another, which burdens some immovable good, or some capital of a thing, or some patrimony.

He to whom the pension is to be paid, or the creditor, is the censualist; the debtor of the pension is called the censuary.

2. Distinction. There is distinguished a perpetual census, and a temporary census, which is chiefly the life-census. It is redeemable if the censuary, by paying a certain sum, can free himself from the burden of paying the pension; otherwise it is irredeemable.

3. Constitution. The obligation can arise by onerous title, especially through contract, and by gratuitous title, through donation or legacy, as when a testator obliges his heirs to pay an annual pension to a well-deserving person. Not rarely, where this can be done civilly, a census is bequeathed to a church or to a pious cause.

4. The contract of census is a contract by which the censuary obliges himself, whether in perpetuity, or for a definite time, or for the life of a definite person, to pay an annual pension to the censualist. If he obliges himself on account of a thing handed over to him, that thing cannot be claimed back, and thus the contract of census is distinguished from the contract of mutuum.

Formerly a sum was rather paid so that one might acquire the right of receiving an annual pension from a thing already possessed by the censuary, or even from fruitful labor which he was judged to perform. This census, which was called personal, so that it might be distinguished from the real census (from a field), fell under suspicion of disguised usury. And in truth this mode of fruitfully placing money, if the labor of the person was not truly fruitful and by the redemption of the census the capital had to be restored, easily covered lending of money at interest. Today, however, since it is generally lawful to lend money at moderate interest, this contract among private persons has become obsolete.

Modern States, however, besides the debt which they contract in a form also usual for private persons, often provide themselves with necessary moneys in this way: they create saleable titles of public credit to the bearer, which give to the buyers the right of receiving an annual sum from the revenues of the State. When that right is of itself perpetual, since the buyer can never demand the restitution of his money, there is had a true constitution of perpetual census; nevertheless this census is redeemable, inasmuch as the State reserves to itself the right of freeing itself from the burden by paying the sum which is inscribed on the title and is called its nominal value. (Suppose a title of 100 pounds, for which, when they have been received, the State pays each year [printed blank]. It will redeem the obligation by paying 100.) Often, however, from the beginning it establishes that within a certain space of time, for example [OCR/printer uncertain: first digit missing, printed as 00 years], its debt is to be extinguished. Then, each year, titles are designated by lot in a defined number, which it will extinguish by payment (Rendita ammortizzabile, rentes amortissables^†). Those who buy titles for this constituted census have in truth merely lent money at interest to the State, although the name of census is preserved.

II. Perpetual and Life Census. 1. Not all laws admit the private constitution of a perpetual census. Thus the Brazilian Code, 1124, excludes perpetuity by the very definition of the contract of census. Other laws, such as the French and Italian Codes, admit a perpetual census, but make it essentially redeemable by the censuary. So also does the land-census of the German Code, art. 1199. Nevertheless they can agree in French law that it cannot be redeemed before ten years, or, in Italian law, before thirty years, if an immovable thing has been handed over, or without a certain prior notice.

2. While the use of another census is rare, the life-census is most frequent. It is constituted for the life of some person, who for the most part, but not necessarily, is the censualist or creditor himself. Indeed it can be constituted for the life of several persons, so that the whole is owed until all have died. This census is not redeemable. It can be constituted by gratuitous or onerous title; and then it is an aleatory contract, which will be just if, after computing the probable expectation of life through which it is owed, the sum of the pensions equals the capital and its fruits, decreasing each year pro rata. Practically, one must stand by the judgment of experts, unless both parties, conscious of their ignorance, have spontaneously wished to commit themselves to a greater chance.

Since the constitution of a life-census is sometimes made in order to despoil heirs, it is well understood why the Brazilian Code, art. 1125, declared null the constitution of a census in favor, not only of a person already deceased, which is manifest, but also of a person who within thirty days from the celebrated contract dies from an illness with which he was already then afflicted.

The contract of purchase-sale can by antonomasia be called the commutative contract, to which all others can in some way be reduced. In examining this contract, the moral theologian asks from positive law especially in what way, at what moment, the dominion of the thing sold is transferred, and who bears fortuitous cases; but he consults natural justice concerning the obligation of the buyer to pay the just price; concerning the obligation of the seller to hand over the promised thing; finally concerning frauds which can be strictly injustices, or can be opposed only to [OCR uncertain: printed adjective damaged; probably perfect] and commendable honesty: for it is clear that no fraud, whether concerning the price or concerning the thing, is laudable and commendable.

I. Notion. Purchase-sale is a bilateral, consensual contract, by which one party obliges himself to hand over a thing for a defined price, which the other party is bound to pay.

This definition expresses the notion common to every law. It is complete if, as in French and Italian law, the dominion itself of the thing can be transferred between the parties by consent alone; but if, as most more recent laws have it, dominion is not transferred by consent alone, there must be added: "by which one party, the seller, obliges himself to hand over the thing and to transfer it into the dominion of the other." Cf. art. 133 [printed citation; context suggests 433], Code of Germany.

II. Elements. This contract necessarily contains three things: consent, thing, price.

1. Because the contract is consensual, it is completed by consent alone. Besides, when one's own thing, determined in body, is sold, regularly, in French and Italian law, dominion is transferred by the consent itself. When the thing is defined only by kind, or law prevents dominion from being transferred by consent alone, then the effect of the contract is reduced to reciprocal obligations.

In French law, the sale of another's thing is null, since dominion cannot then be transferred. But the parties can conceive the sale otherwise, in the Roman manner, as they say; in that case a mere obligation is undertaken of bringing it about that the promised thing comes into the dominion of the buyer.

2. The seller is bound to hand over in due time the thing which he owes; if it must be sent, the expenses are of themselves imputed to the buyer. The buyer is bound to pay the price.

III. Eviction. The seller must moreover warrant against eviction, unless it has been otherwise agreed.

Eviction is had as often as the buyer is juridically disturbed from possession of the whole thing sold, or of a part of it. The seller is obligated to warrant this if the eviction has as its cause a defect of the right which the seller had to transfer, and the eviction could not be avoided, for example by warning the seller, who had a means of repelling the plaintiff, concerning the suit that had been moved.

IV. Order of execution. Which party ought first to execute the obligation, unless it has been defined by agreement, is not established. But if one party does not furnish what he owes, the other party can either withdraw from the contract or demand that damages be repaired.

V. Fortuitous case. In French and Italian law, from the perfected contract the buyer bears the fortuitous case: the thing perishes for its owner. In German law, the party whose prestation has become impossible is indeed excused, but he can no longer ask anything from the other party, unless this other was at fault. If, however, for example, compensation has been given for a thing which perished by chance, he will have to hand this over to the other party asking for it and executing his own obligation. Therefore positive laws must be consulted concerning fortuitous case.

Sum of Obligations. Concerning the thing, the seller contracts the obligation of manifesting its defects, of handing it over, and of warranting eviction.

1. From the law of nature itself he must manifest: a) substantial defects, both hidden defects and those which the buyer, from his inexperience, is perceived to be ignorant of; for error concerning these defects invalidates the contract. Substantial defects are defects which make the thing harmful or notably useless to the buyer, with attention also to the quality principally intended; b) accidental defects concerning which he is asked in general or in species. Again, understand defects which, of themselves or from the condition of the buyer, are hidden from him. Concerning the effect of such error, cf. above n. 423.

He does not have to manifest accidental faults concerning which he is not asked, provided he does not fraudulently hide those same faults, nor demand too great a price. Asked in general, he can be silent about defects of small moment, ignorance of which seems to give cause neither to the contract nor to the price. Nor must he manifest defects concerning which he has protested that he does not wish to guarantee anything; yet in our civil forum this protest effects nothing as regards hidden defects known to the seller.

From positive law, hidden redhibitory faults cannot be kept silent, or those which so diminish the utility of the thing that the buyer would not have bought it except perhaps for less. Certain laws exhibit a taxative catalogue of these faults, as regards certain animals.

2. He must hand over the thing to the buyer in due time, as we said, but, of itself, at the buyer's expenses. On account of omission or delay imputable to the seller, the buyer can recover damages and besides can either urge the execution of the agreement or seek rescission of the contract.

3. We have just treated eviction at n. 453. The parties can within certain limits increase, diminish, or even remove the obligation of warranting eviction.

Frauds and Lies. Goods of themselves must be handed over true and pure. Nevertheless it is lawful to adapt oneself to the received usages of upright men. Injury is committed: a) if adulterated things are infected with a substantial fault; b) if from the contract a special obligation of handing over a pure thing had been undertaken; c) if an unjust price is demanded. - Yet let us commend a simpler honesty with all our strength.

The customary lies or perjuries of merchants concerning the price for which they themselves procured things for themselves, or concerning proposals made to them, are not judged to have been efficaciously harmful, since little faith is given to them.

More than in quality, fraud in quantity and measure is to be condemned as injury.

But those who by arts of this kind entice buyers indirectly harm other merchants of the same things. Yet are they injurious to these? Certain persons affirm that. But since no juridical relation has intervened between them and the other merchants, we think this must be denied. It pertains to positive law to repress or restrain fraudulent competitions (concorrenza sleale, concurrence déloyale), for example by a collective action by which merchants are permitted either to denounce other deceivers of buyers to the public authority, or to act for damages before a judge.

A merchant who hands over to another a thing already assigned to someone else, or registers it in the public records under another name, commits injustice. But the buyer in good faith can use the positive law which not rarely awards dominion to him to whom the thing has been handed over or in whose name it has been inscribed.

I. The chief, indeed of itself the only, obligation of the buyer is that of paying the just price which has been agreed upon between the parties. Therefore the difficult argument concerning just price must be treated. But the things which we define here must be completed by those which will have to be added in the contract of lease-hire.

Price is nothing other than the value of a thing expressed in money.

Moreover they are accustomed to distinguish legal, common, and conventional price; to which we think there must be added the price imposed by monopoly. It seems that each must be discussed distinctly.

On Legal Price. Legal price is called that which is directly fixed by law itself. Directly, I say, because indirectly the legislator can influence the prices of things by fiscal devices: as if, after imposing a customs duty, he contains the exportation of certain things within such limits that in his own territory they are abundantly available.

In ordinary circumstances, the legislator is no longer accustomed to establish a direct price, either single, or minimum and maximum; but by law it is customary to define what several officials, for example notaries, can ask for instruments to be prepared or written; or at what price companies which operate railroads must transport persons or goods. Officials and companies must stand by these definitions, unless it is established that the price is unjust or that custom has derogated from it. - But from legal fixings of the prices of goods we can less absolutely and universally gather an immediate obligation of conscience. For the common persuasion concerning the mind of the legislator and concerning the equity of the valuation must be consulted. The reason for the difference between these fixings and the former is this: those who use the ministry of an official, or commit themselves or their goods to a railroad, tacitly promise the legal price and do not think of another agreement; whereas, in buying goods, private agreements are customary.

On the Expedience of Fixing by Law the Price of Goods,. in our present society, there is dispute and doubt. Perhaps it is better that the legislator use indirect means of urging equitable prices of things commonly useful, as if he commits to prudent arbiters, after stated intervals, the definition of an equitable price of foods, and by publication of the judgment directs the public conscience, by which buyers and merchants may be protected from unjust vexations.

When necessary things themselves seem about to become scarcer, so that famine is to be feared, it is also fitting that the legislator prevent those things from being bought up by a few richer persons.

II. On Common Price. Common price is accustomed to be obtained by many purchases and sales. It is governed by common valuation. This valuation not only declares what is an equitable price, but is also the proximate cause of the value of things, or of the aptitude by which, in a given society, things can commonly be exchanged with other things. Yet the valuation itself is not, at least wholly, arbitrary, but is determined by the objective utility of acquiring the thing, as this is commonly perceived.

Once the common price is known, we know the price which, justice being preserved, can be imposed even on an unwilling buyer; we know what the buyer, unless special circumstances excuse him, must pay from justice. Therefore it supplies the norm of justice to be observed in contracts. But, unlike legal price, which is usually single (although the laws themselves can establish merely a minimum and maximum account of price), common price is divided into the lowest or kindly price, the middle or moderate price, and the highest or rigorous price. These are in moral valuation, so that in common foods and necessary things, a lesser distance separates the highest price from the lowest. The valuation is considered according to the place and time where the sale is made, so that, when the place or market is changed, prices themselves can increase or decrease. Today, because of the facility of transportation, a broader region than formerly must be held as one market.

But by which price, highest, middle, or lowest, a thing is acquired is defined by private agreement, in which, provided at least justice is preserved, neither party is forbidden to consult his own utility.

Yet observe this: even within the limits of just price, he would be unjust who, by unjust means, such as by unequal weight or by spreading false reports, procured for himself the highest just price.

Moreover, the spontaneous offering of things which are not so common that they are almost continually bought and sold, and the already completed use of a thing, change that valuation. - In things not new, which chiefly draw their price from the value of the metal, for example in silver furnishings, workmanship (mano d'opera, façon) is scarcely now considered. On the contrary, because of scarcity of things or an unusual multitude of buyers, the prices of things increase. But, in a common scarcity of foods, charity will be gravely offended by those who, by increasing the prices of such things, strive to seek greater gain from another's misery. Therefore common hatred falls upon them. Indeed, when there is an abundance at a gentler price, whether, justice being preserved, such prices can be demanded for things which all need that they make those same things inaccessible to very many, can deservedly be doubted. Cf. n. 464. And they undoubtedly violate justice who, by accumulating and hiding those same things at their own place, create a false scarcity of these things, and thus deceive the common valuation itself.

Just Exceptions. 1. Things can be bought at a cheaper price without injustice: a) things which are less useful to the buyer, so that he truly buys in favor of the seller. But here beware of oppression of the poor; b) things bought together in a great quantity: the diminution of price is compensated by the advantage which is procured for the seller; c) things to be handed over at a time when they will be worth less; d) things whose price is paid before the day.

2. A greater price can be demanded by the seller: a) to whom deprivation of the thing would be peculiarly harmful or unpleasant; concerning this cause the buyer will have to be warned, lest he be deceived; b) who sells things by retail, because of greater labor, etc.; c) who, by consenting to delayed payment, indirectly lends money.

— But in the just price there are not included gifts to be bestowed on servants, unless received usages approve that they be imputed to the master; or expenses which, because of a cause peculiar to himself, the seller had to make; or the special utility of the buyer.

Here, however, distinguish fruitful utility from sterile utility. If from the thing bought the buyer seems likely to gain a great profit, then the seller can wish to be admitted as though as a partner, and to compute in the price a certain anticipated payment of the common profit. And the buyer himself is not forbidden spontaneously to offer something by title of gratitude. Besides, because of the errors of liberal economy, it happens that not a few wish to profit from the special utility of the buyer, and certain authors, such as Gousset, do not wholly disapprove this. Wherefore that it be done in this way is not to be advised, but what has been done can be tolerated.

Sale of a Thing Which Will Become Cheap. As long as the common valuation is in force, the thing preserves its value. Wherefore, without injustice, according to such valuation a thing can be sold by him who foresees or knows that it will soon become cheap. But a magistrate who knew that, on account of a prepared law, certain prices were going to be notably changed, if, concerning a matter to be covered by secrecy, he "warned a friend, would unjustly," says Lehmkuhl, I. 1328, "violate the secret." We understand this concerning an injustice such as every transgression of an office imposed by duty is. This is committed against the republic. But whether he is unjust toward other private citizens whom the information given to the friend will indirectly harm is much less certain. And it seems that he can easily be excused from fault who warned a friend worthy of mercy, whose ruin he wished to prevent.

Use of an Unjust Price. If unjust prices have been procured by the evil arts of others, one who knowingly wishes to enjoy them cannot be praised. Most condemn this as injustice. Yet some, as d'Annibale, II. 425. 29, respond more benignly. Arts of this kind are often exercised in the "titles" of banking or industrial companies. But because these things are unknown to the common people, those who buy and sell titles at the stock-exchange price commit themselves to a chance which by present-day usage is not disapproved.

Maximum Price of Necessary Things. The primordial law itself, by which private possessions are to be referred to the common good, demonstrates that foods and things commonly necessary cannot, on account of their present or foreseen scarcity, stand for sale at such a price that sellers make immoderate gains, while a multitude of men is deprived of them or reduced to destitution. Just as a certain wage is a just minimum, so, by equal reason, there is a maximum price of necessary things, established by justice itself. But this is still ignored by too many for us to be able from it to impose a debt of strict justice and restitution on those who, using no fraud or force, sold those things at the prices offered by richer persons; indeed, unless the law establishes a measure for the very abundance in which such things can be possessed by individuals, purchases by richer persons or by brokers cannot be prevented, so that the preservation of moderate prices will now profit men of modest condition very little.

III. On Conventional Price. When legal and common price are lacking, it remains that the conventional price be established by free agreement. The cases will be: a) if, conscious of their ignorance concerning the true price, both parties have wished to go, as it were, into chance; b) if a price of affection is asked, as when someone sincerely does not wish to sell the thing and must be led to consent as though by a premium; c) if there is question of a thing which, not even by the judgment of experts, obtains a common value, but is valued by uncertain fancy or affection, provided even then it remains within reasonable limits. But because, in things of pleasure, prevailing usages create true value, it happens that things which formerly were without value are now commonly valued. And one who wishes to enjoy that perfect honesty which will allow the soul to be free from every scruple will not wish to use the ignorance of the other party so that he may acquire a thing for himself at a much cheaper price, or sell it at a much greater one. Often the good faith of buyers in these matters will not have to be disturbed; nevertheless right principles should be inculcated.

IV. On Monopoly Price. 1. Notion and origin. Monopoly is had when there is, or comes to be, a sole seller of certain things, and therefore he bears the arbitrium of the price. It is of various origin and character.

Natural monopoly arises from innate qualities of a person, or also from the discovered quality of a possessed thing, which quality had long lain hidden. Not rarely gifts of talent and a fortuitous case together have been causes of an invention.

Artificial monopoly results either from law which has reserved certain things, whether to the fisc or to a private person, physical or moral; or from arts by which the craftsmen or merchants of the same things dominate the market, as they say, so that they compel others either to perish or to stand by the same laws.

Since free competition is more and more suppressed by agreements among producers or sellers of the same things, and true monopolies are created for establishing, according to their own utility, the quantity of things to be produced and the account of price, in truth the account of common price begins to cease.

The rules concerning monopolies must be applied. They require that the price be established which, without monopoly, would be just; or that from labor an honest gain be received, according to the state and condition of the one working. Honest is that which effects an honorable support, with a sum added for moderate advancement or progress.

For a moderate, indeed, but not immense gain is regularly offered to human labor. Wherefore immense gains are of themselves suspect of injustice unless they can be positively explained either a) by sale in another region where, on account of inequality of exchange or another cause, things are sold much more dearly; or b) by some invention by which someone can produce things at a much lower price than they are commonly produced; or c) by a special art and industry by which, for example because goods have been bought together in an accumulated way, many expenses are spared.

While some years ago producers and merchants were competing about yielding things at a cheaper price, not rarely wages below the just amount were paid to workers; but now the rights of buyers who seek things for personal use are frequently violated.

— The chief injustices today consist in various abuses of monopoly, occasion for which is given through syndicates. For: a) merchants who buy things in order to sell them off demand a price without any proportion to labor and expenses; b) an increase of wages is alleged so that prices may be increased much more. If, for example, wages are increased by 5 p. c., prices increase by 10 p. c. Yet no title of gain for the master of the business has acceded; c) by studied sales and purchases the common valuation in stock exchanges is corrupted, and it is obtained that "shares" or "obligations" of companies are valued above or below their true value; d) traders who devote themselves to lucrative trading increase the prices of things as much as they can, whereas they ought to have regard to the price which they themselves paid and to the hoped-for sale. In things whose sale is easy, indeed certain, to buyers who will pay the price shortly or immediately, gain does not seem able to surpass 10 or 12 p. c.

For legal commercial interest is not accustomed to surpass 6 p. c. But that interest reveals to us the common valuation of the fruit to be hoped for from trades, after deducting, however, the value of personal labor and of the risk assumed by the one undertaking the business. Wherefore, in a non-dangerous trade, we attribute 4 [OCR/printer uncertain: printed first digit damaged; calculation indicates 4] or 6 p. c. to labor, when we have estimated the honest gain of the trader at 10 or 12 p. c.

I. The seller can reserve to himself the faculty of redeeming the thing sold. But since this faculty (pacte de réméré) places the thing in an uncertain state, which impedes commerce, it cannot be too long-lasting.

Wherefore the French and Italian Codes permit the reservation of such a pact for only five years (Italian Code art. 1516; French, 1660); the Brazilian Code for three years (1141-1143); the Austrian for immovable things alone and for the life of the seller (1070); the German for three years for movable things, for thirty for immovable things (503); the Spanish (1508) for ten years; the Dutch for five years (1556). The Lusitanian Code does not admit the pact (1587).

II. Things Sold to Taste. When things are sold which, as wine and oil, are customarily tasted, the sale, in several laws, is not considered perfected unless the thing has been tasted and approved. Yet the buyer can renounce this faculty; he is for the most part considered to have done this if he has commanded the merchant to send the thing to him. Besides, today rather a sample is sent; if this has been approved, it will now suffice that the thing handed over agree with the sample. - Cf. the Brazilian Code, 1144-1148; French, 1587; German, 495-496; Spanish, 1453; Dutch, 1499. This presumption is not read in the Austrian and Swiss Codes, but an express agreement can be made.

III. Auction, or Sale Under the Spear,. is a species of sale by which goods are subjected to the voice of the herald and assigned to the last or first bidder: to the last, if ever greater prices are proposed; to the first bidder, if the herald, after making an estimate of the highest price, successively proposes lower prices until one person consents. Hastation can be voluntary or forced.

Of itself it bears the appearance of a certain chance or contest to be established honestly: then the price which is procured by honest arts is considered just.

But received customs today in more than one region have sufficiently adulterated that contract, so that arts less approvable in themselves are admitted; but, since they are practiced on each side, the equality of justice is restored by the compensation of those arts.

In the law which we use, in voluntary auctions redhibitory defects are warranted, and rescission on account of lesion is granted; for the seller, before the thing has been assigned, it is lawful to retain the thing for himself, if the price has displeased him; a premium is customarily promised to bidders; and it is lawful to bid without an intention of buying, provided you truly sustain the risk of acquiring the thing and can and will pay the price. - No one condemns him who merely asks another not to compete with him in some bidding. But an agreement concerning that matter is not permitted by many except among related persons. But why you injure justice by stipulating what you can honestly ask does not appear. But he who has thus kept away all buyers creates a monopoly for himself, concerning which one must speak as above. Indeed, when it is intact for the seller to keep his own thing, an agreement of this kind does not of itself offend even charity. Again, however, because auctions are accustomed to profit buyers more, and to compensate contrary devices, it seems that it can be tolerated that fictitious bidders be sent by the seller (to stimulate the true bidders) and defects be hidden. Thus Aertnys, III, 190. - Therefore the unjust arts to be mentioned here are nearly these: a) not to hand over the thing assigned, or to substitute another less good thing in place of the thing exposed; b) by fraud or violence to turn others away from bidding, or not to pay the offered price, or to bid fictitiously when you cannot or will not undergo the risk of acquiring the thing; c) on the part of the official who directs the auction, deliberately to effect this, that friends buy the thing at a cheaper price.

IV. Sale Through Brokers. A broker is one who for another undertakes the care of buying or selling a thing.

Those who habitually carry out such an office should observe the laws and the usages of upright men. Thus bankers and money-changers, to whom sometimes no better rule can be supplied except that they abstain from frauds, promote the utility of their client, and be content with a moderate fee.

He who has bought at a cheaper price, or has sold this person's thing at a dearer price than the principal had already permitted, has of himself acted for the principal, to whom therefore that gain must yield. Except if the gain is to be attributed to his special industry; if a beneficent intention can be supposed in the principal; if a small gain is judged to have been tacitly remitted; if received usage so bears, or tacit consent appears from elsewhere; if, after diligence has been applied, and no greater price has been found among others, he seriously buys the thing, and therefore at his own risk, and then, when occasion is given, sells it more dearly. This practice seems full of dangers, although it is frequent among money-changers. But if merchants remit anything from the price in view of the broker, he can retain those things for himself. This will happen to those brokers whom it is of interest to merchants to attract on account of their profession. One must answer more cautiously concerning the reduction which merchants seem to grant to servants.

Booksellers also are brokers, who receive books from authors or editors so that, without any risk of their own, they may expose them for sale and announce them in their catalogue. By a league made among themselves it happens that they promise this very slight work of theirs very dearly, so that, for example, they must return only half the price inscribed in the catalogue for individual books sold by them. Thus it happens that to the writer, who has labored more than all, the smallest part of the gain returns, and the very price of the book is notably increased. Again, a remedy seems to be sought from a society entered into among writers, which at the same time would care for the diffusion of books.

Corollaries or Scholia.

1. He who cedes to another, who is ignorant, at an ordinary price a claim, i.e., a private credit (not titles which are valued on the Exchange), whose debtor he knows is not solvent, conceals a substantial defect, so that he is unjust (Lessius, Iust. cap. 21, n. 81).

But what if by positive law, as, for example, art. 1542 of the Italian Code, 1694 of the French, he ought to answer only concerning the truth of the claim? We understand laws of this kind to have been made with this mind, that, apart from agreement, they transfer the risk to the buyer, but not that they should wish to heal the injustice of the seller who has ceded for a price a thing worthy of no price. d'Annibale, however, II, 466, would not dare "to obtrude this opinion upon anyone against the most manifest law."

2. An inventor can enjoy a legal monopoly so that he may sell his invention at a greater price than it would be estimated at of itself. For there is a just cause of fostering inventions in this way. Yet here also that saying is valid: "Nothing too much."

3. When by a great buying-up of things a private monopoly is introduced, the price indeed, with justice preserved (but not always with charity preserved), will be able to be increased, yet not beyond the highest price which agrees with the true abundance of things.

4. Likewise agreements by which sellers or craftsmen of the same merchandise agree concerning not selling merchandise or letting work below a certain price can be entirely honest, as if by this reason they procure equal conditions for themselves. But a conspiracy not to sell, below that highest price, things which many need would be opposed to charity.

Nor are contractors of public works today reprehensible of themselves who, after an agreement has been made, compare their mutual estimates among themselves so that they may yield the thing to be undertaken to one who must hand over to the others part of the greater price which he will obtain. Indeed they increase the gain from this not a little, but, provided they keep themselves within reasonable limits, the magnitude and difficulty of such works today seem to demand gains of this kind. (Thus, recently, in Holland, the public magistrate himself judged this cause.)

You ask concerning the nature and inviolability of so-called literary, industrial, artistic property, etc.

1. Laws are accustomed to concede a civil action to authors, inventors, etc., at least if they have observed certain prescriptions of the laws: against all who, without their license, have published the work in print in the same or another language, have imitated the machine and made it saleable, have performed a musical work, etc. Yet that privilege is not perpetual, but remains, for example, through the life of the author and fifty years after the death of the author. But it is accustomed to be protected by international pacts, so that also among other nations the author can impede the diffusion of his book, his machine, etc.

2. Because it consists in this, that it reserves to the author his work to be published, so-called property is not in reality anything but a certain monopoly.

But because without positive law that reservation would be entirely futile, and of itself it is impeded by the very efforts which authors make that their works may become known and be in the hands of many, we judge that their right, otherwise long unknown, is not natural, but has its source in the law itself. Although it is very agreeable to equity that the works of an author or inventor should also be recompensed by monetary reward.

3. Wherefore, beyond the positive law itself, no office of justice forbids the buyer of a book or machine from making any honest use whatever of the thing acquired.

A sufficiently common opinion holds that laws concerning property of this kind immediately bind conscience. Yet no certain reason is perceived by us why we should pronounce more severely concerning those laws than concerning others, and gather from them a greater obligation than that of permitting authors and inventors to use their right. We are confirmed by the easy efficacy of legal protection of this kind in the external forum; we are confirmed by the extension, growing day by day, of this kind of property, so that in reality it creates prohibitions that are arbitrary and inconvenient to many.

Are those very pursuits of perceiving ever greater monetary profit from things which confer upon the deserving a nobler reward of honor and glory so greatly to be praised and commended?

Nevertheless, from the natural law itself, a beautifully written work or a useful invention grants to the author an inviolable fame, which would be injured unjustly by those who, under a false name, published the work or spread abroad the invention.

Statutes of Canon Law. 1. By force of c. 1530, for alienating immovable ecclesiastical things, or movable things which can be preserved by being preserved, there is required: an estimate of the thing made in writing by upright experts; and, by force of c. 1531, § 1, the thing must not be alienated at a lower price than that which is indicated in the estimate; - 2. a just cause, i.e., urgent necessity or evident utility of the Church, or piety; - 3. the license of the legitimate Superior, without which the alienation is invalid. And when there is question of precious things, or of things which exceed the value of 30,000 lire or francs, the legitimate Superior is the Apostolic See.

Moreover, unless the circumstances suggest otherwise, the alienation should be made by public bidding, or at least made known; and the thing should be granted to him who, all things considered, has offered more; the money received from the alienation should be placed cautiously, safely, and usefully for the advantage of the Church (c. 1531, § 3).

To safeguard the utility of the church, the Code requires the special license of the local Ordinary so that immovable goods of the church can licitly be sold, or even leased, to their own administrators and to those joined to them in the first or second degree of consanguinity or affinity (1510); to eliminate simony, it forbids in the sale or exchange of sacred things that any account of consecration or blessing be had in the estimation of the price. - "Administrators can exchange titles which they call to bearer for other titles more, or at least equally, safe and fruitful, with any species of commerce or negotiation excluded, and with the consent of the Ordinary, of the diocesan Council of administration, and of others whose interest is concerned" (1539, § 2). Cf. concerning these sanctions, Epitome iuris canonici, II, n. 849-864.

The Cause of the Present Evil. "Purchase and sale seems to have been introduced for the common utility of each, namely while one needs the thing of another and conversely, as is clear through the Philosopher (Polit. l. 1, c. 6 at the beginning). But what has been introduced for common utility must not be more for the burden of one than of another." But today the immoderate hunger for gain has altogether departed from that most wise reason, and, too often, purchase-sale ends in a duel in which one party strives to conquer and oppress the other.

For this reason all things are confusedly perverted, and the very notions of just and unjust are weakened in the minds of those contracting, while common sense protests in vain, which even now marks with a certain note of infamy those who hunt easy and excessive gain.

Yet definitely to condemn someone to restitution will often be difficult: a) on account of the obscurity or complexity of things; b) on account of ignorance or common error, which permits us to leave men to their own conscience; c) on account of excuses from the necessity of conforming oneself to the general mode. Many are compelled to give their name to a syndicate and to sell goods at the price which the directors have established. Then those who were not the authors of the objectively unjust price seem able to be excused from injustice. They therefore will rather have to be stirred up to making large alms. But conscious authors of an unjust price commit injustices so grave, so harmful to many, that the quantity to be restored seems to exceed their own means. It then remains that, after those things necessary for preserving one's state modestly have been preserved, they should give all the rest to the poor or to pious works.

Private warnings also will be little efficacious, so that a more efficacious remedy must be sought from contrary associations of buyers, which would put bridles upon the cupidity of merchants.

Permutation is a consensual, bilateral contract by which one transfers to another, for a thing, a thing into ownership, or promises to transfer a thing into ownership.

According as the law admits the translation of dominion by consent alone, or besides requires handing over or inscription in the records, the contract will transfer or will not transfer dominion.

Each contracting party ought to warrant eviction to the other.

In ecclesiastical law, special cautions are established concerning the exchange of benefices. None can validly be done without the consent of the bishop or quasi-bishop, or of the Vicar general furnished with a special mandate. Cf. c. 1487, 1488 and Epitome, II, 810.

Exchange. is a contract by which a money-changer, for the party desiring exchange, changes monies with some gain beyond the principal.

It is said only of the changing of money; and it is distinguished as manual or small exchange, when present money is exchanged for other present money; local or trajectitious exchange, when money accepted in one place is to be restored in another place. Since this is for the most part done by a written mandate, it is called exchange by letters (campsory letters). Finally, it is temporal exchange, by which present money is given for money to be paid after a certain time in the same or another place. This use is frequent in banks which, after retaining interest, pay in advance to merchants the monies owed to them (sconto).

Because exchange, especially temporal exchange, gave place to disguised usury, theologians were accustomed to raise various questions concerning various exchanges under the aspect of usury, which now have become entirely obsolete.

But today, after the war, the unstable ratio of exchanges among various nations has enriched some with immense profits, while others have suffered great losses of fortunes from it. Deceivers are to be marked with injustice, who vitiate exchanges by frauds.

Corollaries or Scholia. 1. He who has received money for paying another's debt can exchange that money into another legal money, provided he does this not only for his own gain, but also at his own risk.

What if there is question of Mass stipends? Here various cases seem to have to be distinguished. a) Titius received a mandate to carry from France into Italy stipends of Masses, paid to him in francs. After he has arrived in Italy, since he could immediately hand over to the celebrants the sum such as he received, he can thus convert it into Italian money and pay for the Masses the Italian monies so obtained. So obtained, I say, and therefore not with the gain perceived from the change. For the same reason he himself could as it were act as money-changer for those monies, hoping after some time for a greater gain. But he could not, after this formal or virtual conversion has been made, if he has been cast down from his hope, hold the same conversion as void: he acted at his own risk, and therefore he must give as many lire as, on the day of this kind of conversion, he obtained or would have obtained. b) Titius, after undertaking the burden of celebrating Masses, since he saw that French money was standing below Italian money, fearing a greater loss, converted it into Italian money. But, since the turns have changed, he asks whether he can now commit those Masses to be celebrated by others by handing over Italian monies? Resp. He converted the French money as his own: he acted at his own risk. Therefore he must hand over either French money or Italian money, but observing, in the conversion, how much they are worth by the relative value of the French money on the day on which he hands over the Masses to others. - c) Caius, having undertaken the mandate of transmitting Mass stipends, and fearing lest the relative value of the money received should decrease, converted it into another. But the opposite happened: the money increased in value. What stipends must he pay? Because in good faith he wished to conduct that business usefully for the church, it is enough that he hand over the monies obtained by the conversion.

2. What if false money has been thrust upon you by an unknown person?

Resp. Properly false money, for example leaden money imitating silver, or false paper money, can in no way be spent again by him who has accepted it out of ignorance. The theft which you suffer gives you no license of stealing. But if there is question of true money which has been deprived of legal currency, one must see whether or not in fact it is accustomed to be given and accepted. If, in fact, it is commonly received, it will be lawful to spend it.

But he who has given money not received, although he has acted badly, nevertheless often will be excused from restitution, because the damage inflicted will not be established. For perhaps the other has already spent the money which he received. But in no way is it to be advised that adulterated monies be given as a gift to beggars: thus they would tacitly be invited to frauds.

After the contract of sale, the treatment of the contract of lease-hire, by which merely the price of use is sought and paid in place of the price of the substance, was for a long time sufficiently straightforward. But recent questions, as they say, social questions, whether concerning pacts between the master of labor and workmen, or concerning the very housing of the people, have made the matter very complex, which in this work it will be permitted to touch only in a few words.

Definition. Lease-hire is a consensual, synallagmatic contract by which someone, for a certain price, promises certain utilities of a thing or of a person for a certain time.

It is perfected by consent alone, although, in the external forum, proof of it is not always permitted to be made in any manner whatever.

There is distinguished the lease of things and the hiring of works or of services. We use these latter words, by which we at once designate two species, lest, which today would be odious, we should be forced to place beside the lease of things a lease of persons.

I. Notion. Lease of a thing, whether immovable or movable, can be called a sale of utility; to which the rules of the sale of things are adapted, if you except certain sanctions of positive law.

II. Mutual Obligations. The lessor ought to effect that the lessee can peacefully use the leased thing, during the whole time of the lease, in a good state, with the utility and advantages which it had when the agreement was made. He guarantees against eviction and defects, at least hidden ones. Lesser repairs are usually incumbent on the lessee, greater ones on the lessor.

The lessee ought to use the leased thing after the manner of a good father of a family, and for that use for which it was destined. He is responsible for custody of the thing. He ought to pay the price at his time and to stand by the agreements. By the destruction of the thing, at least if the whole has perished, but not, of itself, by the death of the parties, the contract is dissolved. But what positive laws establish must be observed.

III. Various things concerning this contract are usefully attended to by the moral theologian.

1. Although lease of a thing, in Italian and French law, confers no right in the thing, nevertheless, by the disposition of the law, it gives to the lessee a right of use independent of the person into whose ownership the thing may have come. That is, successors, even those who succeed the parties by a particular title, ought to carry out the agreement previously made.

2. Concerning the time for which a thing is leased, let these things be noted. Both by canon law and by more than one civil law, a lease beyond nine years exceeds simple administration (cf. can. 1541, §2, 3°; art. 1572 of the Italian Code). - Laws not rarely establish a maximum time within which either certain things or personal services may be promised.

Thus, in Italian law, agreements concerning the cultivation of uncultivated fields are permitted to be made for a hundred years; but immovable things, of themselves, cannot be leased for a time greater than thirty years. Houses, however, can be leased for the life of the lessee and for two years besides. - But a lease for nine years is not rarely made in such a way that in the third and sixth year it becomes open to the parties to withdraw from the contract, provided that the intention has been intimated in good time. Otherwise, when the day arrives, the contract continues by the thing itself. - If no day has been established, the nature of the things and customs will have to be observed, so that it may become known to what term the lease is extended. A stipulation of tacit renewal of the contract, if a contrary will has not been manifested some time before the day to which it runs, is altogether admitted. Indeed, if the lessee has not been warned about leaving the thing, and peacefully continues the use, a new lease will be judged to have been tacitly made, under the same laws as before, not however of itself for the same time, but rather as if without a day. Thus it is established in Italian law, arts. 1592, 1593.

Positive laws must be consulted concerning the faculty which the lessor has of leasing the leased thing to another; and concerning the taxes which are to be borne by each party.

3. A tenant-farmer or tenant cannot, at his pleasure, change the customary destination of an immovable thing: as if he should wish to convert an estate into a field, or a shop into a private house. But the consent of each party is necessary.

4. If the lessee himself, with the owner consenting, has begun a business, and thus by degrees has procured that buyers of certain things should come there, present-day laws incline toward this: when, on the day arriving, he departs, he obtains a right to a certain compensation for the value which has accrued to the leased thing by his industry. That right is called recognition of commercial property, which we compare with so-called literary and artistic property.

5. Since it now happens rather often that several tenants inhabit various parts of the same house, it comes about that, by a presumption sometimes rather arbitrary, the law defines the obligation of bearing the case of fire as common to the tenants. Thus in Italian and French law (cf. Italian Code, arts. 1589, 1590; French Code, arts. 1733, 1734, as it was corrected on 5 Jan. 1883).

If the house has been insured, the one who insured the thing and made the owner indemnified succeeds to his rights against those who gave cause to the damage.

6. Several laws are accustomed to grant to the owner of an immovable thing a legal pledge in the movable goods which the tenant has brought into the leased thing. Thus it comes about that the seller of merchandise cannot, without the consent of the owner, recover the merchandise which he had committed to the shopkeeper to be sold.

7. Since the lease of a field contains something of chance, no remission of price would be owed to the lessee from strict justice on account of unusual sterility; nevertheless laws are accustomed to grant some remission from equity. Cf. arts. 1769, 1770 of the French Code.

Frequent in Italy is the use of leasing rural estates under this law, that the fruits are divided between the lessor and the lessee (mezzadria, masseria, colonia). On this agreement cf. Code, arts. 1647-1661. Special agreements also are customarily made concerning the leasing of herds of large or small cattle (locazione a soccida o soccio). Cf. arts. 1665-1696.

8. If increases of things exceed every expectation, so that the price of the lease becomes altogether, and indeed by a great amount, below the just price, especially if it is paid in fictitious money, justice itself and the principles concerning the just price seem to require that the tenant-farmer increase in equitable proportion the rent promised by him.

9. Since in many states dwellings were found with difficulty, in more than one nation laws were passed which prevented lessors from expelling lessees, or from increasing prices beyond a certain amount. These laws had not a few detractors and reprovers, so that there was doubt about the very justice of the laws. Yet because these matters are usually very obscure and the laws were promulgated with a right intention, the tenants whom they favor can stand by them, nor does there seem to be present to the lessors a right of occult compensation. The presumption is in favor of the legislator. This is not destroyed by complaints.

I. Notion. By lease of work, a work to be completed is promised directly.

But he who, for a certain price, undertakes a work to be completed is the contractor (or undertaker, receiver, appaltatore, entrepreneur) of the work, which the other party is judged to lease.

Positive laws are accustomed to distinguish a contract of carriage, a contract of completing a work from material which the lessor has supplied, and a contract of completing a work and at the same time furnishing the necessary material.

When there is question of carriage, they are accustomed to urge rather severely the obligation which the receiver of such a business has of carefully guarding the things committed to him and of providing for their integrity.

Contractors for a work are responsible for the deeds of the workmen whom they use.

II. Mutual Obligations. 1. The contractor ought to complete the whole work, within the established time, at the stated price, even, of itself, if the material and labors have become dearer, just as he had promised, and indeed by his own labors, if the work requires skill.

2. The lessor ought to receive the completed work and pay the promised price on the appointed day.

What if the contractor (or undertaker of the work) complains about an agreement harmful to himself?

He ought not easily to be believed. Nevertheless, extraordinary expenses, which had to be made from a plainly unexpected chance, are to be compensated to him. Most laws, Italian Code, 1643; French, 1793; Brazilian, 1246; Lusitanian, 1401; Spanish, 1593, expressly establish that, on account of increases of things and of wages, or even under pretext of changes concerning which no written agreement had been made, no supplement of price is to be paid to the contractor. The Swiss Code of Obligations, however, 373, admits that, on account of unforeseen circumstances, the judge may establish an equitable compensation or permit rescission of the contract.

But if an erroneous computation has been made, so that no one could have completed the thing for the agreed price, and the thing has sufficient value for the owner for whom the work is completed, the agreed price seems to have to be increased so that the contractor may receive at least the lowest just amount. Yet some oppose to that equitable payment the aleatory nature of the contract, by which a strict right of compensation would seem to be excluded.

I would rather distinguish between a material error which concerns present elements, as for example concerning the measure of the building, concerning the present price of things, and an error of foresight concerning future elements. The former, but not the latter, seem to be extrinsic to chance.

III. Special Things To Be Noted. 1. Several Codes dissolve the contract by the death of the contractor, so that the lessor ought to pay only in proportion for what is useful to him in the work begun. Thus the Italian Code, 1642; French, 1795, 1796; Lusitanian, 1403; Swiss, 379; Dutch, 1648; while better, in our opinion, the Austrian Code, 1162, and the Spanish, 1595, establish this only when personal skill was required.

2. Not a few laws permit the lessor to renounce the work, provided that he reimburses expenses and pays the contractor what is of interest to him, and consequently also lost profit. Cf. Italian Code, 1641; French, 1794; Brazilian, 1247; Spanish, 1591; Dutch, 1647; Lusitanian, 1402. On the manner of computing what is of interest, cf. the Brazilian Code at the cited article, and the German, 649.

3. Undertakers of a building, according to several laws, ought to guarantee its quality for several years: for ten years, according to the Italian Code, 1639; French, 1792; Dutch, 1645; Spanish, 1591; for five years, according to the Brazilian Code, 1245; Lusitanian, 1399.

4. For some years it has been usefully established that, in undertakings of works, a stipulation should be made of a fitting minimum wage to be paid to the workmen. - On agreements among undertakers of works cf. above, n. 472, 4.

5. In great factories themselves, and in the working of coal mines, it comes about that certain partial leases of work are offered to workmen.

6. Here, of itself, something would also have to be said about advocates, physicians, and others who are accustomed to promise useful service. The Austrian Code mentions them in § 1163; but in §§ 1164-1171 it defines the juridical relations of author and publisher. Advocates and physicians will be treated more conveniently in the chapter on offices.

General Survey of the Argument. The civil Code of France assigned only two articles to the hiring of services: by one, 1780, it sanctioned the principle of liberty: "Services can be promised only for a time or for a definite business," while it by no means prohibited the hirer or master from obliging himself to keep a workman or servant for his whole life. By the other article, 1781, it said that faith was to be given to the assertion of the master or lord concerning the amount of the wage, concerning the payment of the wage of the preceding year, and concerning partial payments of the current year. - This latter article was afterwards suppressed in France and elsewhere, so that that whole business was contained in one article in the Italian Code, 1628; in the French, 1780; but in four articles in the Spanish Code (1583-1587) and the Argentine (1623-1626). Soon, however, the Legislator had to establish things more diligently concerning works to be leased and hired. Several laws, social laws as they say, were added to the Codes; or, as in Holland by the law of 13 July 1907, new sanctions were inserted into the Code itself, so that no fewer than 77 ample articles with a new section were added to the Code. In the Code of Germany a proper title, arts. 611-630, is assigned to the hiring of services (Dienstvertrag), which is followed by the title Werkvertrag (631-651), which treats of a promised work or lease of work. The Swiss Code of Obligations itself distinguishes Dienstvertrag (319-362), Werkvertrag (363-379), and Verlagsvertrag (380-393), on the publication of books. The Brazilian Code, under the general title concerning lease, distinguishes lease of things (1188-1215); hiring of services, 1216-1236; lease of work (1237-1247), which it calls undertaking of work. But in separate chapters it treats of the publication of scientific, literary, etc., works (c. 9, arts. 1346-1358); and of scenic exhibition (c. 10, arts. 1359-1362). The Mexican Code, however, distinguishes the rendering of professional services, which it governs by arts. 2406-2415 and by the dispositions concerning mandate, and the contract concerning works or concerning work. It distinguishes domestic services (2434-2457), day labor (2458-2468); from work to be done in general (2469-2509), it separates carriage (2510-2531), technical instruction (2532-2539), and lodging (2540-2544).

Concerning these laws, these things must be observed. While some Codes preserve the common name of lease-hire, others, better, abstain from that name, since diverse contracts concerning works can be made. Some Codes treat more confusedly every kind of works and services, while others, better, distinguish the various kinds more accurately. With Roman law, some, for example the Mexican Code, subject offices of a nobler nature to special norms; others, for example the German Code and more explicitly the Brazilian, consider all things commonly.

Various Manner of Contracting Concerning Works. In various ways one party can freely promise his service, and the other the recompense of the service. For:

1. There can be made an agreement of its own kind, more familial or personal, by which a person in a general way promises services agreeable to his condition and capacity, insofar as he is received into the family of another, who directly provides the former with the necessary and fitting things of person and family. Money, if it is supplied, is judged to be such as permits that now, with food, roof, and things supplied being considered, and later, sufficient industriousness being supposed, that person can live according to his state with his own. In such a case, he who furnishes services places himself under the direction of another, but the other, or master, provides for the needs of the servant as they are in the concrete. Therefore according to varying health, number of children, if there is question of married persons, that provident solicitude will vary. By force of this kind of contract, persons of every social cultivation were received as guests among kings and princes, and a similar kind of relations is still not infrequent between domestic servants and the head of a family.

2. Without strict commutation, a stipend of fitting support can be promised, which is measured according to the common necessities of him who promises services. These necessities vary according to the place which, from the kind of services, the promisor holds in society. This especially comes into use when the utility rendered transcends the economic order.

3. Between workmen and masters of labor a certain partnership can be entered into, whether complete or incomplete; whether manifest, or latent in the wage itself. A partnership is complete when all profits are divided between workmen and masters according to the proportion of contribution; it is incomplete if the workmen are merely admitted to a certain communion of profit, arbitrarily established. It is manifest where what each one is going to receive is defined from the considered outcome of the business, especially if something must be supplied by the workmen themselves when matters happen otherwise. But the partnership is covered by salary if a stable wage is indeed promised to the workmen, but one which is prudently estimated in advance from the circumstances of the business itself to which they give service. Then a double security is furnished to the workman-partner: by payment of the stated sum he is taken away from the danger of losing, as it were, his lot (capitale-lavoro), and for uncertain profit he receives less, but certain, profit. But both of these have already been computed in the defined salary.

Finally, by reason of those contracting, it is now necessary to distinguish individual contracts and collective contracts, which are deliberated and agreed between masters of labor and an association of craftsmen, so that the immediate obligation falls upon a moral person.

At present, we are treating only of lease-hire; and since previously we have treated of other mutual offices of workmen and masters and of strikes themselves (cf. n. 329-334), it will be enough for us to sketch in a few words the norms of a just wage.

On the Just Price of Hired Services. 1. Notion of the contract. By this agreement, the workman leases his services to another who strictly hires them; which the most ancient usages have approved, and therefore it is shown not to be opposed to human dignity. Although the contract of some partnership provides more for the same dignity, since it is made between persons who, even after the contract, act as equals.

2. Estimation of the wage. a) This must be held first of all. Commutative justice wills this and at the same time requires nothing more than that the value of labor be compensated by a price. Since that value does not vary according to the person laboring, it is worthy of equal compensation, whether there is question of a celibate man or of a father of a family. - b) But divine Providence has attributed to labor this intrinsic minimum value, by which it may generally suffice for the end for which, of itself, it is destined. That end is that a man who is healthy and endowed with common skill may be able, according to his condition, to live decently and in his own time to found a family. Therefore that value, of itself, is to be compensated by the hirer of services. And from the reason adduced, a debt of commutative justice is demonstrated.

Some, however, appeal only to an obligation of legal justice. But these labor under a confused notion of that justice. For since legal justice urges acts of a special virtue, in the case this virtue will not be able to be anything except commutative justice, which we assert, or charity, which is quite clearly too little.

But does the intrinsic value itself have its proximate cause in the necessities of the father of a family? There are those who reason in this way. But are not those necessities shown to be manifestly extrinsic to the commutation which takes place between labor and price? Would not then, in place of a debt of objective reason, there logically succeed a debt of subjective estimation, which will vary according to the number of children and other circumstances? Would it not then be in the interest of the masters of labor to hire rather celibates or workmen without offspring?

But all these things are avoided if you see merely in the common condition of workmen an indication of the true value of human labor. Namely, just as, with a supply of milk sufficient of itself for nourishing infants, he filled the breasts of the mother, divine Providence gave to human labor that fruitfulness, so that the workman, using his powers well, could provide for himself and his own in normal circumstances. The workman yields this innate fruitfulness when he leases his services. The master of the workshop ought to compensate this to him by paying a salary which, with the fruitful work of wife and older children computed and frugality first set aside, would be suited to honest support for the workman and an ordinary family.

But we do not call that an ordinary family which neo-Malthusian arts have reduced to one or another offspring; rather that family is ordinary which, from the observed laws of marriage, the craftsman in a definite region would generally have to support. For the support of a family of this kind, whether it is present or not, the salary cannot be unequal in normal circumstances.

c) Therefore the just salary by which, in normal circumstances, services are to be compensated from justice is composed of the absolute family salary and, besides, the quantity which according to common estimation is to be added, with the general prosperity of things considered.

You ask what is to be thought about the supplementary monies which are promised to fathers of families. By what title are they to be paid?.

1. This provision today is very highly to be commended by social utility, indeed by social necessity. But the utility or social necessity itself has a source not so noble and happy. For it coheres with the general and ever-growing tendency of imputing to the State or to collective solicitude burdens which formerly individuals gladly and not without some glory assumed, and of demanding a monetary wage for every benefit furnished. It is also the fruit, at least indirectly, of the propagation of neo-Malthusianism. For this multiplied celibate workmen or those without offspring. And since it flowed from egoistic pursuits of material pleasures, workmen, freed from a nobler solicitude, began to live more comfortably and to produce a general manner of living which fathers of families could not imitate. Hence fathers of families began to be held in contempt and mockery. Hence the neo-Malthusian arts themselves were increased. Hence fecundity, which is celebrated in the sacred writings themselves, was more and more esteemed no longer as a blessing and a cause of noble gladness, but as the imposition of an unwelcome burden. Funds established for distributing family subsidies intend in part to remedy these grave social evils; which indeed is most highly to be praised.

2. As to the title by which they are paid, the Legislator indeed, on account of the public good, can establish that from the sum of salaries a sufficient portion be reserved by which fitting sustenance may not be lacking for more numerous families. He can do this especially when, as today, the celibacy of many or the violation of matrimonial laws has been the occasion why not a few workmen began to live a too lavish life and to mock fathers of families to whom that luxury is not accessible.

Positive law being excluded, the factory owner cannot subtract anything from the just wage of others in order to give it to fathers of families. But since he is by no means compelled to admit workmen into partnership of profit, he can from profits received maintain funds by which family subsidies are paid.

Therefore, of itself or apart from agreement, the institution of family subsidies is governed not by the law of justice but by that of charity and sometimes of equity. But it becomes a debt of commutative justice if, which is to be desired, it enters into agreements which are made with the workmen, whether by a collective or by an individual manner.

Corollaries and Scholia.

1. He who without a just cause dismisses a servant or workman before the appointed day is held to damages, to be estimated generally from whether or not an occasion of equally good service was present. But when without the fault of anyone the execution of the contract is broken off, the matter is to be estimated from equity and received usages.

2. The workman also is unjust of himself if before the day he omits to furnish services. But since the obligation itself of agreements is contained within reasonable limits, the workman is excused by excessive difficulty of execution when most interrupt the services according to the agreement.

And it can happen that particular obligations undertaken between the master of labor and the workman carry a tacit condition annexed to them: unless a collective demonstration either of the workmen or of the factory owners impedes execution.

3. Unless some manner of partnership has intervened, salaries are to be increased, on account of extraordinary profit of the work, not from strict justice but from equity alone.

4. Without injustice, you cannot depress the wage below the lowest just amount because you wish, by a lower price of things, to triumph over rivals, or because you had to spend more than others in buying machines, in building the factory; or because from charity you hired miserable workmen, provided they render useful service to you. But you will not offend justice by the promise of a lesser wage if the workmen or servants, assumed from charity, furnish to you at least in part superfluous service; or if otherwise you are unable to obtain a moderate recompense for your own labor: for it will be permitted to prefer yourself to others. It also happens that workmen who already have fitting incomes from another source seek sometimes to increase these by leasing services outside their time, and therefore offer services for a stipend which is less than just. You are not compelled to refuse their spontaneous offer, or free acceptance.

But all special burdens, beyond the labor, are to be compensated by a fitting increase of recompense.

A lesser salary also can be paid, if that defect is compensated by other conditions, as often happens among domestic servants.

5. The nature of the contract concerning services to be hired and leased is subject to continual changes of the social order. Thus it is now less placed in the power of factory owners that, even when the day arrives, they may dismiss a workman by arbitrary will.

6. No less than for fathers of families of the common order, provision must be made for fathers of families of the middle order. Indeed, for some years their condition has been made worse and more troublesome than the lot of mechanical workmen.

I. Notions. Partnership (as a contract) can generally be defined as a contract by which two or more obligate themselves to pursue some end by common work. The end then can be economic or transcending the economic order.

But in Latin law they have been accustomed to reserve the name partnership for unions in which an economic end or pecuniary utility intervenes. Societies which have an immediate end of piety, religion, or even, as many wish, of pleasure, for example for exercising certain games, are not juridically partnerships but rather are called associations, and the agreements to which they give place are referred to innominate contracts. Juridically, therefore, quite commonly:

Partnership (as a contract) is a consensual, synallagmatic contract, by which two or more obligate themselves to contribute a thing or service into communion of use, or principally of profit.

Into communion of use, as if several farmers should agree concerning the common use of horses or of a machine.

Into communion of profit, when they propose to exercise together a lucrative business. Then each one contributes something or places something in common, whether industry, or money, or another thing, or credit, or the name itself, under hope of profit which will be divided among the partners.

II. Divisions. 1. According to varying comprehension, partnership is distinguished as universal or particular, according as it embraces some universality either of things or of services, or only certain businesses.

2. According to the kind of acts, it is distinguished as mercantile and civil.

Mercantile partnership is entered into principally for acts which are considered commercial; civil partnership for acts of another kind, and it obligates the partners without limit.

Mercantile partnerships have usually been governed by their proper commercial Code, or by peculiar laws; civil partnerships by the civil Code. In Italian and French law, civil partnerships are not juridical persons unless, where there is ability, they have put on the form of a mercantile partnership.

3. According to varying undertaking or obligation of patrimony, mercantile partnerships are constituted in such a way that either all partners obligate their patrimony without limit and in solidum; that partnership in Italian and French law is called in nome collettivo, en nom collectif; or some are obligated without limit, while others commit only a certain force of money; this in Italian and French law is called in accomandita, en commandite; the accomandatarii, commandité (one or more), are obligated without limit, the accomandanti, commanditaires, only within the limits of the contributed money; or no partner is obligated without limit: this is an anonymous company. For the rule of Italian and French law is that partners whose names are expressed in the social title are obligated without limit. An anonymous company is designated by a certain peculiar denomination, for example Fiat (cf. Italian Commercial Code, 76; French, 19).

In England, practically all companies do not obligate the partners without limit (limited liability); nevertheless, in partnerships, General partners are obligated without limit, Limited partners according to their contribution.

In the U.S.A. companies are assigned to four kinds: Corporations, moral persons which are created by public authority; unincorporated associations, which are not juridical persons; partnership, which is similar to our partnership acting under a collective name; and joint-stock company, which in a certain way is intermediate between corporations and partnerships.

4. According to its relation with third parties, it can be manifest or hidden.

Under another respect, partnership is distinguished as cooperative, which has these proper notes: that, with the agreement of partnership preserved, the number of partners and the capital are changed, for example, instead of stable capital a minimum capital is indicated, but rights cannot be ceded to outsiders (cf. Italian Commercial Code, art. 219 ss.).

Finally, he who has a part of the capital is called a shareholder (azionista); he who has merely given money as a loan is called a bondholder. Wherefore shares are computed among the goods of the partnership (actif, avoir social), and obligations among debts (passif).

From positive law and from the agreement one must gather what rights in administering common affairs belong to the individual partners, and who can obligate the partnership.

Although they use varying names, positive laws agree sufficiently among themselves. Concerning the notion of partnership as it is handed down in civil Codes, this should be observed. While most Codes, imitating the French (1832), posit as essential an intention of utility estimable by price (thus the Argentine, 1648; Spanish, 1665; Italian, 1697; Lusitanian, 1210; Mexican, 2219; Dutch, 1655), some more recent Codes, in a more general way, indicate some merely common end as the object of partnership. Thus the German Code, 705; Swiss, 530; Brazilian, 1363.

The rule of justice is equality, here to be defined, the intention of giving being excluded, from the geometric proportion between contributions and profits. Of itself, the danger is common. But, standing with natural law, a partner can free himself from that burden, provided that he compensates the inequality from a greater contribution or from a smaller part of the profit. How profit is equally divided is to be left to common estimation and the judgment of prudent men, care being taken that the agreement has been freely made. Nothing prevents a part of profit from falling to contributed labor, just as to contributed money. A leonine partnership, by which the whole profit is assigned to one of the partners, is unjust and null.

When nothing else is defined, equal parts are customarily made among the partners.

On equality in dividing profit and damage, Lugo treats rather fully, Iust. d. 30, n. 10 ss. Since these matters are in moral estimation, authors agree that a division which has been freely agreed upon can with difficulty be condemned; provided however, says d'Annibale, II, 175 (13), that, the intention of beneficence being excluded, each one, if the matter has gone well, can receive at least the price which he would have obtained by leasing the thing or service.

But in great undertakings a few constitute matters by their own judgment, while most are ignorant of the very conditions of the partnership. Therefore many occasions of becoming rich without cause, or beyond the merit of the cause, are offered to men of insufficiently fearful conscience.

Who will be able to say how many things are done unjustly? Let us at least inculcate this universal principle: that the right of profit must be tempered to the value of the contribution; and that, with the name therefore given, or by other open or disguised modes, partnerships whose lot is either known to be unstable or is simply unknown cannot honestly be recommended.

I. Mandate is a consensual contract by which something to be done is committed to another who undertakes it (art. 1737, Italian Code). - It differs from procuration, by which merely the faculty is given to someone of doing something for another. - It is of itself gratuitous. If a wage has been promised, it differs from lease of work in this, that the mandatary acts for another. Mandate can always be revoked; but the mandatary who was ignorant of the end of the mandate acts validly. It also ceases by the death or interdiction of either party.

Because the mandatary does not act in his own name, the juridical capacity which he would have to have in order to contract in his own name is not required in him. Thus a minor can be a mandatary (cf. Colin and Capitant, II, 710).

II. Management of affairs is, as it were, a presumption of mandate, by which someone usefully undertakes the affairs of another to be managed, who neither by express word nor tacitly, by silence, seemed to give a mandate. The owner, whose work has been usefully managed, ought to refund necessary or useful expenses and to observe agreements duly made; and, more probably, from natural law, to compensate the labor of the agent by a fitting wage. Positive laws must be approached.

Ratification, by which someone approves what another has done for him, in law is equivalent to mandate.

I. Notion. 1. Not everyone who hands over some thing merely to be kept properly intends to make a contract of deposit. For, trusting in the honesty and prudence of another, he can merely materially commit a thing to another without any peculiar obligation of the latter besides that which every man has of not stealing. A religious himself can accept a deposit of this kind without injury to the vow of poverty; while a contract of deposit, without the faculty of the Superior, does not seem able to be celebrated validly or licitly by a religious. Yet it is disputed whether acceptance of a deposit is opposed to the vow of poverty. Molina affirms this, De Contractibus, d. 525, n. 3, on account of the obligation undertaken, while Genicot-Salsmans, II, 93, holds the negative side probable, because the depositary "exercises no act of ownership over the thing deposited." We judge the argument of Molina more effective, which is by no means touched by the reasoning of Genicot.

I. The contract of deposit is a real contract by which one party hands over to another a thing estimable by price to be kept, and the other obligates himself to keep it and to restore it in its proper species. Cf. Italian Code, art. 1835; French, 1915.

II. There is distinguished 1. voluntary deposit and necessary deposit, which someone is compelled to make by an unforeseen event. It is sometimes called miserable. The burden of proof for this deposit is lightened.

To necessary deposit is joined the deposit which travelers are judged to make with public innkeepers of things which they have brought with them. Innkeepers at the same time have these things pledged, and they ought to furnish security concerning their entire restitution. Yet their obligation is tempered or subjected to certain conditions if excessive sums of money are brought.

2. Deposit can be of an ordinary thing, or of a litigated thing. Sequestration is a species of deposit by which a litigated thing, whether by the private will of the claimants or by the authority of the judge, is committed to some third person, who himself is called the sequestrator, to be kept.

III. Obligations. The depositary ought diligently to keep the thing. He can use the deposited thing only from the express, or at least presumed, will of the depositor. If use of a consumable thing is permitted, the deposit is called irregular, and differs from loan only by the faculty which the owner has of demanding the thing back at will. It is clear that the thing must be restored to the owner asking for it. And it seems foreign to the sense of a certain more perfect honesty that someone should compensate himself from a thing deposited. Yet a strict prohibition of natural law is not demonstrated. Positive laws are accustomed to concede only this, that the depositary may exercise the right of retention for obtaining those things which the depositor ought to pay him on the occasion of the deposited thing.

Notion. I. Insurance is an aleatory contract by which someone, for a certain price, obligates himself to answer to another for certain cases of chance or of prevailing force.

The printed formula which is usually employed in entering upon this agreement is called in Italian polizza, in French police d'assurances; the money to be paid after stated intervals for insurance is called premio, prime.

II. It is distinguished: 1. from the very varied event for which security is promised: for the case of fire, hail, plague, shipwreck, theft, misfortune, old age, sickness, death, or even life up to a certain age.

2. From the object insured, there is real insurance, whether of things or animals, and personal insurance, or insurance of persons.

3. Personal insurance is made, some individually, some collectively; some in the name of the person insofar as he is such, some insofar as he belongs to this or that social class: this is called social; thus there is more than one insurance of workmen.

Especially to be remembered is life insurance, which, from the Italian banker Tonti, of the seventeenth century, its inventor, is sometimes called a tontine, although by this word a certain form of this insurance is more properly designated. Life insurance properly looks to this, that the insurer, for certain annual payments, obligates himself, upon the occurrence of someone's death, to pay a definite sum either to the heirs (whose need is thus provided for) or to another designated person. Sometimes an agreement is made by the contrary reason, so that the insurer owes a sum if a definite person has reached an age, for example, of 18 years; and not rarely each manner is mixed: mixed insurance. Lesser insurances also are frequent, by which merely funeral expenses are promised.

Of the same kind are insurances against sicknesses. And rather than an agreement being made with outsiders, several societies exercise mutual insurance, so that the same persons who are insured are the insurers (Società di mutuo soccorso, Mutualità contre l'incendio, etc.).

Under the name of reinsurance comes, as it were, a second insurance, by which either the insurance societies themselves, by federation or by a greater society, guard themselves from the necessity of giving an excessive amount of money for great misfortunes, for example shipwrecks, or they favor their insured members with greater protection promised by federated societies. Thus, for example, a society of mutual assistance pays sick workmen for some days a daily wage or a quota part of it. But if sickness perseveres beyond a certain time, the federation of societies is accustomed to provide for the same persons. Reinsurance, therefore, is another insurance either of societies or of persons who are insured.

Norms. 1. The justice of the contract requires: a) an uncertain event, or at least one unknown to each party; b) a just price, so that the premium to be paid corresponds to the danger, with account taken of expenses. The price is assessed by laws, morals, and the judgment of prudent men.

Where there is no legal monopoly, it will be difficult to establish that the price was excessive. But by well-constituted mutual societies, not moderate expenses are spared.

2. One must abstain from unjust frauds. a) If the insurer is not solvent, he will not be able to retain the price except according to the proportion of the part which he made secure. - b) The insured ought to declare the whole danger, which afterwards he is forbidden to increase. Otherwise, according as fraud gave cause to the contract itself or merely to its conditions, the contract will be null by natural law, or will have to be reduced to equity, so that for the increased danger the price is increased and the obligation of compensation is diminished. The more severe sanction of positive law will bind at least after the sentence of the judge. - c) Nor can he demand compensation beyond the damage which he has suffered or outside the cases promised. Yet he can accept a greater amount than the insurer freely offers (sometimes in order to attract) or than arbitrators establish. Damages which arise from grave fault of the insured or of connected persons are customarily excluded; which grave fault, before the sentence of the judge, seems able to be taken as theological. And perhaps the agreement made is understood in such a way that the insurer ought to demonstrate the fault.

Can the same thing be fully insured twice? Of itself, certainly. But positive laws and often the stipulations of the contract themselves stand in the way. Similarly, unless the insurer himself has consented expressly or tacitly to the fiction, insurance of a quantity or value greater than that which is in truth present is valid at most only for the true quantity or estimation. If, after insurance has been made, the amount of insured things has been diminished, you will judge from the express or tacit agreements what right follows from this.

You should observe, in the partial destruction of a thing, that only the proportional part of the promised sum is paid, even if it were unequal to repairing the damage.

He who insures life ought to declare diseases insofar as this is required by the insurer. He who has unjustly concealed a hidden disease from which he was certainly going to die shortly has made the contract null and can receive nothing. He who has unjustly concealed other diseases will not be able to retain anything except what, the disease being known, he would have obtained for the premium paid. If however, contrary to expectation, he has lived longer, the defect of the contract is healed, "because the contract is implicitly renewed as often as the price is paid and accepted," Tanquerey, III, 918. On these cases, well and broadly, Gopfert, Moraltheologie, 482, n. 19.

On account of insurances which often protect the insurer himself, it is not so easily established what society has suffered damage from unjust fraud, for example from voluntary fire. The matter can be committed to those managing the society. There are also those, thus Lehmk. I, 1359, who think restitution can be made to the poor, because rather innumerable and uncertain shareholders sustain the damage, since the premium has been increased for them from foreseen frauds. Yet the Sacred Penitentiary solved the matter otherwise, ordering that restitution be made to the society.

The contract of insurance gives occasion to frauds which cannot be numbered. Indeed, insurances on the lives of infants have prepared crimes which had to be met by social laws. Let us inculcate more honorable morals, according to our powers, and rather recommend mutual insurances, as was done in Holland among the clergy themselves. For mutual insurance contains no industrial business.

Present-day laws of many regions not only have procured social insurances but have also commanded them, bringing it about that workmen especially, by money subtracted as if automatically from salaries, or even gratis from the treasury, are insured. Institutions of this kind, otherwise perhaps necessary, nevertheless labor under this not slight inconvenience: that they weaken in great part personal providence, which is accustomed to stimulate talent and industriousness at the same time and to prepare greater joys, and they multiply fiscal officials beyond measure.

I. From natural law. 1. Notion of wagering and conditions of justice. Wagering (scommessa, pari) is a contract in which two or more, contending among themselves about the truth or event of some matter, mutually promise something to one another, so that it may belong to him who has attained the truth.

The justice of the contract requires: a) that the event be doubtful to each party, unless the other, warned, should obstinately have wished to wager, content with the possible error of the other affirming; b) that the equality of justice be preserved: unequal uncertainties must be compensated by unequal promises; and, if the matter does not depend merely on fortune, that there be an equal objective opportunity of conjecturing well, for example of considering the horses competing. If the inequality was known to the party wagering, one must see whether or not this principle can apply: to one knowing and consenting no injury is done.

2. Notion of game and conditions of justice. A game is a contract by which those playing agree among themselves that what each has deposited or exposed shall yield to the winner.

It is distinguished as aleatory, industrious, or mixed, according as fortune or art has the principal parts, or morally equal parts, in bringing about victory. The principal parts, I say, because almost always something must be attributed to each cause.

The justice of the contract requires that it be entered into freely, and that equality be preserved.

Can the more skilled contend with one much less skilled, without compensation for the inequality? The matter is disputed. But unless he has deceived the other, the latter seems to have accepted the game at his own risk.

Unlawful frauds and arts must be absent. Otherwise, the profit would have to be restored, besides that which the other, who had had the probability of winning, lost by the fraud, according to the proportion of his hope.

Rules and customs indicate which frauds are tolerated or are held as unlawful. Thus it is lawful for one playing cards to simulate fear, while he has the best cards; to inspect cards visible from the negligence alone of the other; during play, to recognize cards from a mark which they already bear, but not from one which he himself has put on them.

3. Moral honesty. Neither contract is illicit of itself. But from a positive prohibition, such as has been made for clerics, or from the vice of prodigality, or from the damage which you inflict upon others for whom you ought to provide from justice or piety, it can be opposed to various virtues.

And, considering the many crimes to which they give occasion, those are to be called guilty of grave sin of scandal and cooperation who open public buildings for great games, or sustain or foster similar institutions with money. Nor rarely is excessive profit established for those governing houses of this kind and for shareholders. Houses of this kind cannot be tolerated unless perhaps the reason of avoiding a greater evil should require it.

Concerning canonical prohibitions, cf. the tract on clerics and religious, III, 18.

4. Corollary. Those wager or play invalidly who, because they have nothing, cannot give to the other a useful right to the prize, or who are unwilling to obligate themselves by it, and therefore play with the intention of using a law which removes the obligation of paying. He who has determined merely to use a law which denies an external action, since he contracts an obligation, does not play invalidly, but already in affection sins against justice. - A wager or game by which a great amount of money is exposed at one time, so that in the one exposing it there is open prodigality, is probably null. (Cf. St. Francis de Sales, Introduction to the Devout Life, p. 3, c. 29.) Wherefore neither can the vanquished be compelled to give nor the victor to restore.

5. Scholion. A son of a family is not of itself forbidden moderately to spend something on an honest game from monies which he has received from his parents for support: such is presumed to be the will of the parents. And, at least in the same game, he can expose whatever he has won, since for this too a tacit faculty is judged to have been given. And provided the matter is moderate, the other player ought not to interrogate the son of the family about his right of playing.

II. From civil laws. 1. Civil laws agree in denying a forensic action for exacting what someone has won from wagering or game, unless perhaps, as not a few Codes do after French art. 1966, it has been of that kind which either teaches arms or exercises the body (a foot or horse race, ball, so-called boxing, etc.).

In this case, however, the French Code gives judges the faculty of rejecting an action by which excessive money is sought. But observe that the exception of itself profits only the actors, not wagers in which outsiders are parties, although their contest may have furnished occasion for these. Moreover, gaming debts are thought to be also monies lent during play. - The Mexican Code, however, 2771, grants an action for exacting a debt contracted in a lawful game, if it does not exceed 100 pesos.

2. Most laws at the same time deny that what has been paid can be repeated, unless frauds or deceit can be alleged, or unless, as the Swiss Code of Obligations 511 has, the matter treated is irrational. The Portuguese Code, however, art. 1512, permits that what has been paid on account of a merely aleatory game be repeated.

But observe that monies exposed on tables are held as paid in advance.

3. Now the question arises concerning the obligation of conscience. And that an obligation proceeding from an honest wager or game ought to be paid voluntarily seems to be established from the words of the Austrian Code, § 1271: wagers made in good faith and otherwise lawful oblige when the price has not only been promised, but also in truth paid or deposited. The same § 1271 establishes this concerning games. - Concerning Spanish law, on account of the words of arts. 1799-1801, by which it gives an action for games and wagers not prohibited, and at the same time art. 1798 denies an action for debts of an aleatory game, the obligation of conscience can be doubtful. Say the same concerning the Mexican Code, on account of the similar words of arts. 2272-2278; and perhaps concerning Argentina, on account of art. 2063. The Portuguese Code, art. 1511, does not permit the contract of game to be a mode of acquiring goods. The French Code, 1967, and the Italian, 1804, seem to recognize a natural obligation clearly enough; yet account must also be taken of the jurisprudence of tribunals, which in France consider an obligation contracted from game as of a shameful cause (cf. Colin and Capitant, II, 694); the more common opinion in Italy recognizes a natural obligation (cf. Pacifici-Mazzoni, V, 2, p. 377); nevertheless several hold as more probable, when the game is merely aleatory, that the cause is shameful and produces no natural obligation. Yet what has been voluntarily paid cannot be repeated, on account of the principle: shamefully given, shamefully repeated.

Finally, the laws of England and of the U.S.A. consider the contract of game as null. Can what has been paid be repeated? The laws of the States vary. (Cf. Slater-Martin, A Manual, etc., c. 13).

Conclusion for conscience. 1. What someone has received as profit from a game otherwise honest, he can keep, at least until the judge has commanded restitution. - 2. Those who have been defeated and do not owe an excessive amount of money, we shall exhort to pay the debt. - 3. Nevertheless, to impose a strict obligation will generally be difficult; nor will absolution have to be denied to him who wishes to use the civil law. Cf. Lehmkuhl, Das bürgerliche Gesetzbuch, at arts. 762-764; Theol. mor. I, 1372. The common persuasion of upright persons in the region also must be observed.

I. Notion. 1. A lottery by which, after the various parts of an inheritance have been constituted, it is committed to lot to decide which portion shall fall to each person, or by which also concerning a matter doubtful or litigious among a few it is established that it will belong to him whom the lot has indicated, is altogether to be separated from lotteries commonly so accepted. A lottery or sortition of this kind is entirely honest, and is juridically efficacious, as is expressly established by several Codes, for example the Austrian, § 1273, and the Brazilian, 1480.

2. The lottery of which we treat here is a contract by which, with several paying a certain price toward a certain thing or toward a certain sum of money placed in common, a right of the prize is acquired if the drawing should fall to someone.

II. Moral judgment. 1. The contract is just, provided that both the ratio of the prize and of the hope correspond to the money which the competitors pay; nor may the master of the lottery make excessive profit certain for himself. Therefore of itself, where he sustains no danger, as merchants who sell goods by the help of lottery, the profit ought not to exceed the fruit which honest business dealings are accustomed to bring. Often, however, some reason of beneficence is added. And in official lotteries the State reserves more for itself by way of tribute, not at all greatly to be recommended.

2. Lotteries, however, give place to many abuses. Wherefore laws ought to take care that they do not permit them except for just reasons; and they are accustomed to impede excesses by various cautions. Thus they require that titles which give hope of a great but uncertain prize, nevertheless meanwhile bear a modest annual interest. The prize itself is not to be counted among the fruits of the titles, but is the price of an aleatory sale promised in advance.

III. Positive laws are accustomed to distinguish lotteries permitted by public authority, whose obligations they sanction, and other lotteries which are either declared null and prohibited or are equated with games.

I. Notion. So called from the sign of an inn or place at Bruges where merchants were accustomed to assemble, a Bourse is called a market where goods are present only by samples (campioni) or by titles. A bourse of goods and a bourse of securities are distinguished. Besides various and true dealings of the same kind, very many others are mixed with game or wagering, or are discharged by mere game. The reasons are often more entangled; yet they can be reduced to these almost simple forms.

1. Market for a day. Values or goods to be handed over afterwards are now bought-sold, namely on the day on which "liquidations" are accustomed to take place (for example the 1st and 15th day of each month), for the price which will then obtain. According as the thing has increased in price or has become cheaper, either contracting party will carry off a profit from the contract, which thus is mixed with a certain wagering (agio, in the broad sense). Often, on the appointed day, nothing must be handed over, but only that profit must be paid. The matter then ends in game.

That game is merely aleatory, when the unskilled indulge in it (which happens too often); but it must be called mixed when skilled merchants make a prudent estimation of the future event.

2. A market with premium is a purchase-sale under penitential earnest-money, in which either contracting party reserves to himself the faculty of rescinding the contract, with the premium paid. When the day is approaching, he either confirms the market or rescinds it by paying the premium. These again can be done in a true or fictitious contract.

3. Certain accessory contracts of sale-back, etc., which contain a virtual loan of money or lease of goods, whose interest is the price, are respectively called report, déport. Or otherwise you have report, if the prorogation is made by the buyer; déport, if by the seller.

II. Moral judgment. These games of themselves are not unjust, but the principles concerning monopoly, concerning sale-back, concerning wagering and game must be applied. Very often excesses are to be reproved here, and justice is easily offended, whether because the wagerer often does not have whence to pay debts at the appointed time, which invalidates the contract unless the other was conscious of that unstable condition; or because, by deceit, for example by false rumors and reports, false increases or decreases of things are obtained; or because by buying up a monopoly is procured, by which thereafter abuse is made for changing prices more than is right, whence come the ruins of many who are deceived by these arts.

Nevertheless it is not fitting that, on account of excessive abuses, we should take away every goodness from these dealings. When passions, whether political or lucrative, do not attempt to turn everything upside down, the anticipatory estimations of experts contain useful indications for others and prevent values from either being depressed too much or increasing too much, but foster a certain tempered equilibrium. If, after a serious market for a day, a new agreement has diminished the obligations undertaken, that can incur no reprehension. And it also happens that by a market for a day which, as was agreed from the beginning, is to have its end without any handing over of goods or titles, someone seriously provides for his affairs. Suppose someone gives his labor to a dangerous business, so that he would lose everything if the titles which he holds should decrease in value. By now adding a fictitious sale of those titles, the damage will be compensated by profit and he will carry on the business securely.

Positive laws concerning these markets are uncertain enough. The German Code, 764, and the Swiss Code of Obligations 513 equate markets for a day which are concluded by payment of a premium with games. In a similar way the tribunals of Belgium and France estimate these things. What the judges of the Netherlands think is less certain (cf. Duynstee, op. c. n. 299). But particular laws perhaps enacted concerning this argument must also be observed. Thus the French law of 28 March 1885 pronounced legitimate all markets for a day, even if they should end in mere payment of a premium. But this is not understood to have been established concerning markets which from the beginning tended to this from the will of the parties. In Italy, the laws of 14 June 1874 and 24 Sept. 1876 protected by action, with a certain form observed, markets for a day concerning public titles. Concerning this argument cf. also arts. 73-75 of the commercial Code, the ordinance of 27 Dec. 1882, royal decrees 9 June, 13 and 14 Nov. 1907 (Pacifici-Mazzoni, V, 2, 377-384).

I. On Transaction. 1. Notion. Transaction is a contract by which, by a mutual but onerous renunciation of the parties, a controversy concerning a doubtful right is ended. - Contrary to an amicable composition, it brings in no gratuitous cession even of a partial right, although it is often mixed with a certain condonation.

2. Norms. Transaction supposes a doubtful right; and the just price must be estimated from the probability which, at the moment of the agreement, the right had. It can be vitiated by various error. In our law it bears strict interpretation. He alone who can alienate a thing can transact concerning it.

This peaceful mode of ending lawsuits is so commended by the Code of Canon Law that the judge himself ought to employ exhortations toward obtaining it. Cf. c. 1925. Nevertheless the solemnities for the alienation of ecclesiastical things must be applied. Cf. c. 1927, which also guards against simony at least of ecclesiastical law, by being unwilling that a transaction be made "concerning spiritual things," whenever the payment of a temporal thing intervenes. Moreover, also in ecclesiastical matters, the civil laws of the place where the transaction is made are to be observed (can. 1926).

II. On Compromise. 1. Notion. Compromise is an agreement by which, for avoiding or ending a lawsuit, the parties commit the controversy to be settled to the judgment of one or more persons. If, from the intention of the parties, which is presumed such, they ought to settle the question according to the norm of law, they are called arbiters; but arbitrators, if they transact the business according to good and equitable (c. 1929).

2. Things to be observed. In ecclesiastical matters laymen cannot validly exercise the office of arbiter; and the solemnities for the alienation of ecclesiastical things are to be observed (c. 1930, 1931).

For certain questions to be solved which consist in fact, the judges themselves are accustomed to designate experts {experts}.

III. On Concordats and Similar Agreements. To the genus of friendly or coerced compositions there are to be referred various agreements which debtors who are not solvent enter into with creditors, or which even, through the mediation of a judge, are imposed on creditors. But one must distinguish:

1. An agreement by which the obligation of paying is merely deferred for the debtor: concerning this agreement nothing particular occurs to be said.

2. A voluntary cession of goods which the debtor has made so that creditors may cease from judicial pursuit. Besides that effect, does it also hold as a remission of the remaining debts? This wholly depends on the intention of the parties, from the words which they have used. But, in doubt, the negative parts are to be held, because, as several Codes have (for example the French, 1315; Italian, 1312; Dutch, 1474), remission of debt is not presumed but must be demonstrated. Creditors, however, were not compelled positively to reserve their rights. And perhaps, on account of the modest hope of obtaining more afterwards, they abstained from an express reservation, without any intention of condoning the remainder. If, however, somewhere the persuasion has prevailed by which an agreement of this kind would be understood as concerning full remission, then, with Genicot, I, 604, the silence of creditors could be held as a renunciation, since a different clause would be so easily placed in the agreement.

Concerning judicial cession of goods there is no longer reason for us to speak. For this was done lest the debtor be apprehended bodily on account of debts. But since now a favor of this kind is shown to have been conceded to every debtor who was in good faith, judicial cession of goods has become obsolete.

3. Merchants, however, make so-called concordats with creditors, by which they obtain either that imminent bankruptcy (fallimento, faillite) ¹ be met, or that bankruptcy already made have an end. Concordats of this kind, at least if the greater part of creditors (defined by a certain ratio) have given assent, are confirmed by the authority of the judge and are imposed on the rest. In the U.S.A., and also in England, an unfortunate debtor can, at least in the external forum, obtain liberation from a judge.

It is now asked whether the debtor who afterwards can pay more than the proportional part with which the creditors were content or ought to have been content, is bound to supply the remainder, or whether, on the contrary, he can consider himself freed from every debt.

Writers go off into various opinions. Several, relying also on ancient authorities, deny liberation altogether unless liberation is expressly conceded; some, but rather hesitantly, seem to incline to the more benign parts, at least in some regions. And in truth various regions must be distinguished.

In France, cession of goods, from art. 1270, and a concordat do not take away the natural obligation. So the writers. The same seems to have to be said concerning Italian law, both on account of art. 1312, Civil Code, and on account of the chapter on concordats in the commercial Code, where not even an insinuation of full liberation is had. So also Ballerini-Palmieri, III, 513. The same seems to have to be said concerning Spain and other regions of Latin law and concerning Germany. In Belgium, the clause is customarily added: "provided that affairs do not become more prosperous" (sauf retour à meilleure fortune): that clause bears this interpretation, that the debtor owes nothing until he is able conveniently enough to satisfy all his debts. - In the Netherlands, there are serious reasons for thinking that the law concerning judicial concordats wished to extinguish every debt in conscience. Cf. Duijnstee, n. 235. - In England, both Crolly, De iust. et iure, III, 1232, and Slater, A Manual, I, 138 and 151, think that by liberation simply conceded by creditors, and by judicial liberation, debts are also removed in the internal forum.

In the U.S.A. the Bankruptcy Act, 1 July 1898, with additional changes in 1903, 1906, 1910, has such words that at least probably debts of conscience are extinguished. Cf. Martin apud Slater, p. 438-451.

Certainly, on account of the common good, so that hope may be restored to an honest merchant, the law can concede such condonation. But the debtor, in order that he may be able to use this favor, ought to have honestly done what the law ordered to be done, and to have abstained from every fraud in the concordat itself.

¹ For proper bankruptcy belongs merely to merchants. Others who are unable to pay are said to fail their creditors (sont déconfits, tombent en déconfiture).

1. Notion. Suretyship is a contract by which someone undertakes to fulfill another's obligation, in place of the principal debtor who is unable.

2. Effects. The surety is not bound except insofar as the principal debtor is bound, and of itself insofar as the latter's inability is juridically established. Remission of the debt conceded to the borrower frees the surety, but not conversely. It happens not rarely in practice that the creditor, consulting his own convenience, immediately seeks payment from the surety.

The obligation of the surety is of itself estimable by price.

Clerics are forbidden from suretyship, without consulting the Ordinary, c. 137. Cf. III, 17.

Suretyship pertains to the contracts which we call secondary, because they suppose another contract to which they are attached, so that they may strengthen its efficacy.

The two other secondary contracts, pledge and hypothec, were treated above where accessory real rights were discussed, n. 362-364.

Some things to be observed concerning contracts. 1. In present-day laws this is the general principle, which in these words is promulgated in the Brazilian Code, art. 129: "The value of declared will depends on no peculiar form unless that is expressly required."

Wherefore few contracts are solemn. In French patrimonial law there are only donation (931); nuptial agreements (1394); hypothec (2127); payment of a debt by which the one paying is at the same time subrogated to the creditor in his right (1250); subrogation in the legal hypothec which a married woman enjoys (art. 9 of the law of 23 May 1855). In Italian law art. 1314 enumerates eight cases of form imposed under penalty of nullity: which form can be a public instrument or a private writing.

In English law and U.S.A. law, the only solemn contracts are those by which dominion over immovable things is transferred {deeds and mortgages}.

2. The nullity of an act is not usually so great that it is non-existent, but it brings about that it can be declared infirm and void by a judge. Therefore he who possesses a thing from an invalid instrument nevertheless does not have it without title.

3. A condition of nullity must be accurately distinguished from a condition of proof. Thus in French law obligations which surpass 500 fr. in value cannot be proved in the civil forum, unless at least an initial written proof is had.

4. A condition of validity must especially also be distinguished from a condition to be fulfilled so that the contract can be opposed to third parties. Thus a contract concerning an immovable thing must be copied in a public office.

I. A contract is the consent of two or more persons in the same juridical agreement, while a quasi-contract is an honest fact, existing by the authority of law or by the voluntary will of someone, which produces a certain obligation of justice. A contract can be considered in fieri, or in its constitution, and in facto esse, or in the permanent effect which it produces.

II. Division. Contracts from the end of those operating are gratuitous, onerous, or mixed. They are gratuitous when the promise or performance of one party is compensated by no repromise from justice. Otherwise they are onerous, and indeed properly or analogically: properly, if compensation is made by commutation, equal or unequal, with the very performance of the other party; and most properly, if the commutation is equal; improperly, if, without commutation, on occasion of the performance of the other, another title is verified obliging to a certain payment: as is the title of sustenance obliging to taxes to be paid for sacred ministries; and, in civil society, obliging to "honoraria" to be paid to him who has fulfilled a ministry of a superior order, as is a professor by whom knowledge is communicated, a physician by whom health is procured, an advocate by whom right is defended, a judge by whom right is rendered. A contract is called mixed in which only a partial price is required. - Moreover, the equality of commutation is either between the thing given and the thing accepted, as in sale, lease, exchange; or between rights in common things and contributions, as in partnership; or between two uncertain hopes, or between an uncertain hope and a present performance, as in aleatory contracts, such as insurance is. And the reasons of these contracts can be mixed, so that sale and lease, partnership and insurance, can be had at the same time.

From the end of the work, every contract changes rights; but some contracts, where laws allow it, change real rights, while others generate obligations.

From the effect of generating obligations, contracts are unilateral or bilateral (synallagmatic); nude or clothed (with a civil action); some are valid, firm, or infirm in various degree: either null of themselves, or only rescindable;

From form they are consensual, which take the beginning of obliging from the consent of the parties, or real, which take it from the fact or handing over of the thing; solemn or simple, according as the expression of efficacious consent is bound to a certain mode or not; express or tacit, according as consent is expressed by signs applied or by fact;

From appellation, they are named or unnamed;

From subsistence, some are principal, others accessory.

III. Constitution. The elements by which a contract is constituted are some essential, without which it would be null or another contract; natural, which are judged to be present unless they are positively excluded; accidental, which must be positively added in order to be present.

Every contract is made concerning some thing or matter, which is its remote or proximate object, and it requires consent or a conspiring together of the wills of persons who are capable by law. Several, as a third element, add a lawful cause, or proximate motive which, known to each party, enters the contract. The legislator sometimes supplies this.

IV. Proper efficacy. Every contract changes rights, whether real or personal: in which case there arises in either or both contracting parties an obligation of justice, which, unless it has been strictly personal, affects the patrimony, and differs from an obligation of fidelity, light in its genus.

Every contract expresses a voluntary commutation of rights, so that the transfer of rights can be explained by the true and mutual interior and exterior consent of the offerer and the acquirer. By the law of nature alone, consent must be made known to the offerer, but not to the acceptor as such. In a solemn contract, consent must be expressed in a certain form.

A will not to obligate oneself cannot be combined with true consent; but a will not to execute the obligation undertaken can be.

V. Vices. A contract is vitiated by error and fear. 1. Substantial error, which affects the essence of the contract, i. e. its nature, cause, essential object, of itself annuls the contract; accidental error concerning a quality which is required as a condition sine qua non operates the same. And error which, from the deceit of the other party, gave cause, that is, occasion, to the contract permits the deceived party to withdraw from the contract. Every error giving cause also permits this, provided the other party is made unharmed. Damages from vincible error will have to be repaired according to the degree of fault.

2. Omitting fear disturbing reason, and fear from within, or from without but just, every other fear obliges its author to repair damages. On account of fear from without and unjust, which is imputable to the other party, the one who has directly suffered fear can at least rescind the contract, provided, comparatively, i. e. with attention to the person fearing, the fear was grave or gave cause to the contract. Several also concede this, whoever was the author of the fear. If the contract is made only indirectly from fear, the contract is not rescindable unless the other party was to be blamed.

3. Deceit by the law of nature effects nothing unless it has produced error. But attention must be given to positive laws.

4. Lesion of itself does not affect a contract, unless from some positive law.

VI. The interpretation of contracts must be made according to equity, so that in doubt the response is rather for the debtor.

VII. Extension and variety of obligation. 1. Of themselves only the contracting parties and those who hold their place are obligated: representatives and successors, unless the obligation has been strictly personal and not real; for a real obligation affects the patrimony. But dominion transferred by contract all must of themselves reverence.

2. An obligation of itself (unless a different mind of the parties is demonstrated) has its origin from the moment of the perfected contract.

3. Subordinated to a condition which is not merely potestative, and which is possible and suspensive, an obligation is suspended; but, when the condition arrives, in some law it is judged to have existed from the moment of the contract. If the condition is possible and resolutory, the obligation holds meanwhile, but, when the condition arrives, it is so extinguished that as to several effects it is judged never to have existed. A purely potestative condition, since it leaves the obligation entirely to the will of the party, effects nothing; a necessary future condition sometimes holds for a day; an impossible condition of itself, if suspensive, weakens the contract; if resolutory, it does not extinguish the contract. A shameful condition is morally impossible. But one must see what laws establish concerning these conditions.

4. A day from which affects not the obligation but the execution: it defers this; it ends the same if it is a day to which, unless it was established for urging the obligation.

He in whose favor the day has been established can renounce the day: it is presumed to be the debtor; but it can be the creditor or each.

5. Mode is a burden or charge imposed upon him who has the right from the contract; its effect must be estimated both from the mind of those agreeing and from the law.

6. The same must be said concerning the express cause for which one contracts.

7. An added demonstration, or more accurate description of the object, can be merely demonstrative, which lacks juridical effect, and taxative: in which case, the falsity having been detected, either the contract falls, or the error must be repaired. Positive laws must be consulted.

8. An added disjunction allows a certain option to be present: whether it permits the debtor to substitute another thing for the thing which alone was promised (facultative obligation), or the stipulation itself has been made disjunctive (alternative obligation). This of itself does not cease unless both objects have perished.

VIII. Confirmation of contracts. The force of agreements is strengthened: a) by a promissory oath, concerning which above; b) by a penal clause, whether for soliciting execution, in which case the penalty is not owed unless it is sought and the debtor is to be blamed; or for estimating damages, in which case it is owed whenever damages would have to be repaired; c) by earnest-money, which can be probatory, confirmatory, which is lost if execution has been lacking, and penitential, which gives place to receding from the contract.

IX. Extinction of obligation. The obligation of a contract is extinguished: a) by payment of the debt; b) by novation, by which an obligation is changed into another; c) by remission of the debt; d) by compensation, which is "the contribution of debt and credit between themselves," and can be legal, facultative, or judicial; e) by confusion, when the one who was creditor becomes the same as debtor, or conversely; f) by loss of the certain thing which is owed; g) by rescission of the contract; h) when a resolutory condition arrives; i) by liberative prescription.

There are also causes, especially damage, which permit delay of execution.

Unforeseen circumstances, by the law of nature, will be able reasonably to hold as tacit conditions, yet in such a way that the other party is not damaged thereby.