§ 2. Assignment of contractual rights and liabilities by

operation of law.

We have hitherto dealt with the mode in which the parties

to a contract may by their own acts assign to others the

benefits or the liabilities of the contract. There are however

certain circumstances in which rules of law operate so as to

transfer to one person the rights or the liabilities of another.

If A by purchase or lease acquire an interest in land of

2l8

OPERATION OF CONTRACT.

Part III.

Marriage.

Repre-

sentation.

Assignment M upon Certain terms which bind them by contractual

in land. obligations in respect of their several interests, the assign-

ment by either party of his interest to X will within certain

limits operate as a transfer to X of those obligations,

tfarriage, again, transfers to the husband the rights and

liabilities of the wife, not absolutely, but conditionally.

Representation, whether in the case of death or bankruptcy,

operates to confer in the one case upon the executors or

administnitorB of the deceased, in the other uppn the assignees

of the bankrupt, his rights and liabilities; but here the assign-

ment of contractual obligations is merely a mechanical con-

trivance for continuing up to a certain point and for certain

purposes the legal existence of the deceased or the bankrupt.

They to whom the contract is assigned take no benefit by it,

nor are they personally losers by the enforcement of it against

them. They nierely represent the original contracting party

to the extent of his estate and no more.

Covenants

affecting

leasehold

run with

the land

if they con-

cern the

thing de-

mised,

See cases col-

lected in note

to Spencer's

case,

I Sin. L. C.

I. 71. 74.

Asngwmeni of obligations v/pon the transfer of interests

in land.

a.

Covenants affecting leasehold interests.

At Common Law these are said to ' run with the land and

not with the reversion,' that is to say they pass upon an

assignment of the lease, but not upon an assignment of the

reversion. If the lessee assigned his lease, the man to whom

he assigned it would be bound to the landlord by the same

liabilities and entitled to the same rights as his assignor, to

this extent : —

(i) Covenants in a lease which * touch and concern the

thing demised ' pass to the assignee of the lessee whether or

no they are expressed to have been made with the lessee * and

his assigns.' Such are covenants to repair, or to leave in good

repair, or to deal with the land in any specified manner.

(2) Covenants in a lease, which relate to something not in

Chap. IT. 5 3. THE ASSiaNMENT OF CONTBACT. 219

existence at the time of the lease, are said to bind the assigns

only if named, that is to say, if the covenant be expressed

as made with heirs and assigns. But although this rule is

laid down in the leading case upon the subject, it has been Minshuu v.

so unfavourably commented upon in a modem decision that « «• * n. sos.

its validity is extremely questionable.

(3) In any case the assignee of the lessee does not acquire not if pure-

benefit or liability from merely personal or collateral covenants ^ P®"°^ •

made between his assignor and his landlord. X the lessee

covenanted to use his premises as a public-house. A the

lessor covenanted not to build or keep any house for the sale Thomas t.

Haywari

T^

L. K. 4 Exch.

of beer or spirits within half a mile of the demised premises.

X assigned his lease to M, It was held that the benefit of

^'s covenant did not pass to if.

The reversioner or landlord does not, at Common Law, by Covenants

the assignment of his interest in the land convey his rights ^th*the^"

and liabilities to the'assiffnee, reversion

° except by

It was not till 32 Hen. YIIL. c. 34 that the law m this statute.

respect was changed, a change probably due to the dissolu-

tion of the monasteries. By that act the assignee of the

reversion is enabled to take the benefits, and also incurs the

liabilities, of covenants entered into with his assignor : and it

has been settled that the rules as to the connection of the

covenants with the thing demised apply to such as run with

the reversion equally with those that run with the land. sm. l. c. 1 69.

The act only applies to leases under seal, but in the case of

leases from year to year, payment of rent and the acceptance

of it is held to be evidence from which a jury may infer * a cS^h 5^ ^''

consent to go on, on the same terms as before,' s c.^pf'a^ ^

/3. CoveTiants affecting freehold interests.

At Common Law, covenants entered into with the owner Covenants

of land, that is to say, promises under seal made to the owner o^er.

of land, and for his benefit, pass to his assignees, provided

220

OPEBATION OP CONTRACT.

Part III.

Dicey, Parties

to Actions,

lao-s.

Covenants

by owner.

Stockport

Waterworks

Co. V. Potter,

3 H. & C. 3oa

2 Mylne &

Keen. 5x7.

Common

Law view.

Equitable

enforce-

ment of

restrictive

covenants.

they touch, and concern the thing demised and are not merely

personal.

X a vendor of land covenants with A the purchaser that

he has a good right to convey the land ; the henefit of such

a covenant would pass from A to his assignees. It would be

otherwise if a covenant were introduced into the conveyance

relating to some matter purely personal between A and X,

On the other hand, covenants entered into hy the owner of

land which restrict his enjoyment of the land, do not at

Common Law bind his assignees, except he thereby create

certain well-known interests, such as easements and profits,

recognised by law.

If a man endeavour to create restrictions on his land which

are not included in the circle of rights in re altend known to

the Common Law, he cannot affix those rights to the land so

as to bind subsequent owners. The cases which deal with

attempts to create 'an easement in gross' illustrate this

proposition, the principle of which is thus enunciated by

Lord Brougham in Keppd v. Baily : — * It must not be sup-

posed that incidents of a novel kind can be devised and

attached to property, at the fancy or caprice of the owner. . .

Great detriment would arise and much confusion of rights, if

parties were allowed to invent new modes of holding and

enjoying real property, and to impress upon their lands and

tenements a peculiar character, which should follow them

into all hands however remote.'

But Courts of Equity have established a class of exceptions

to this general rule, and although these have been mainly

confined to covenants in the case of land sold for building

purposes, it is difficult to see what limitations can be intro-

duced to the principle on which they are enforced. The

view taken by Courts of Equity may be thus illustrated.

A sells land to X and covenants that he A, being possessed of

adjoining land, will never use it otherwise than in a particular

way. A sells his land to M with notice of the covenant, and

Chap. II. §2. THE ASSiaXMENT OF CONTRACT. 221

ATb enjoyment of the land is then limited bj the terms of

the covenant The principle is thus stated by Lord Cotten-

ham : — ' That this Court has jurisdiction to enforce a contract

between the owner of land and his neighbour purchasing

a part of it, that the latter shall either use or abstain from

using the land purchased in a particular way, is what I

never knew disputed. . . It is said that the covenant, being

one which does not run with the land, this Court cannot

enforce it ; but the question is, not whether the covenaiit runs

udth the land, but whether a party shall he permitted to use

his land in a manner inconsistent tmth the contract entered

into hy his vendor, and with notice of which he purchased.^ ha^J^'pSlm.

Assignment of oontractiuil obligcUion upon marriage.

When a woman marries, having bound herself by contract Leake.

pp. XS3B-I24'9.

while feme sole, and being entitled thereby to benefits, or contracts

subject to liabilities, the effect of her marriage is to disable ®^ "aarned

her from acquiring the benefits of such contracts and to vest dum sola.

them conditionally in her husband ; to protect her from the

liabilities of such contracts and pass them, with some limita-

tions, to her husband. She is disabled from acquiring the

benefit of her contracts, for if she sue alone upon contracts

made by ber before marriage, she may be met by an application

to the summary jurisdiction of the High Court

The husband takes the benefit of contracts made by the Husband's

wife dwn^ sola, if he does any act which amounts to a redttction "^ '

into possession of the chose in action. He does this, in the

case of a contract executed on the part of the wife, by re-

ceiving or authorising another to receive payments due in

respect of such contracts. He may do this also by suing

jointly with the wife for whatsoever may be due to her upon

her contracts. Whatever is thus obtuned passes absolutely

to the husband, like all other personal property of which the

wife was previously possessed. If the husband do not diuing iM^^""-

the coverture reduce into possession the choses in action of^^^^^^s^

Z2% OPEBATION OF CONTRACT. Part III,

Fleet V. the wife, they fiurvive to her if he die first, or pass to her

Perriii,

L^R. 4 Q. B. representatives if she die in his lifetime,

and liabili- The hushand acquires the liabilities of the wife to this

^^^^* extent; at Common Law he was liable to be sued jointly

with his wife upon any contracts made by her before marriage.

33 & 34 Vict. The Married Women's Property Act, 1870, exempted him

Sanger V. from this liability altogether and limited the creditor's

Jfo. " ^**' renaedy to the separate estate of the wife. But an Act to

37 & 38 Vict, amend the last-mentioned Act has again fixed upon the

c. 50. ,

husband a liability for his wife's ante-nuptial contracts

limited by the amount of such real and personal property

of the wife as has been settled on or vested in the hus-

band, and of such choses in action as the husband has

reduced, or might by reasonable diligence have reduced into

possession.

Assignment cf contractual obligation by death.

Representa- Death passes to the executors or administrators of the

all con- deceased all his personal estate, all rights of action which

ri^hts^hich ^^^^^ aflPect the personal estate, and all liabilities which are

affect per- chargeable upon it. Thus covenants which are attached to

' leasehold estate pass, as to benefit and liability, with the

personalty to the executor or administrator, while covenants

affecting freehold, as covenants for title in a conveyance of

freehold property, pass to the heir or devisee of the realty.

if not de- The rights and liabilities of the executors and administrators

person^ °" are further limited in this way, that performance of such

skill or contracts as depend upon the personal services or skill of the

deceased cannot be demanded of his executors, nor can they

insist upon offering such performance. Contracts of personal

service then expire with either of the parties to them : an

apprenticeship contract is thus terminated by the death of the

Baxter V. mastcr, and no claim to the services of the apprentice survives

Burfield, ' ■*•••■

3 str. Z266. iq i\^Q executor.

In like manner a breach of contract which involves ^

Chap. It. § 2. THE ASSiaNMElH? OF CONTBACT. 223

purely personal loss does not confer a right of action upon

executors. In Chamberlain v, WUliamsan, an executor sued a m. & s. 408.

for a breach of promise to marry the deceased, the promise

having been broken and a right of action having accrued in the

lifetime of the testatrix. But the Court held that such an

action could not be brought by representatives of a deceased

person, inasmuch as it did not clearly appear that the breach

of contract had resulted in damage to the personal estate.

'Although marriage may be regarded as a temporal ad-

vantage to the party as far as respects personal comfort, still

it cannot be considered as an increase of the transmissible

personal estate.'

Assignment of contractual obligation by bankruptcy.

The Bankruptcy Act of 1 869 provides a machinery whereby 3a & 33 vict.

the creditors in the case of bankruptcy or liquidation by Bank-

arrangement may appoint a trustee of the property of the jj^uMation.

bankrupt for the purpose of getting in and dividing the

property for the benefit of the creditors. Such a trustee Trustee's

acquires * not only what may in strictness be called the P°^®" *

property and debts of the bankrupt, but also those rights of

action to which he was entitled for the purpose of recovering

in specie real or personal property, or damages in respect of Rogers v.

Spence,

that which has been unlawfully diminished in value or taken g ^;^'

from him.' The trustee thus acquires, like the representa-

tives of a deceased person, rights to the performance of

executory contracts and rights of action for contracts broken.

The trustee of the bankrupt acquires in a fuller and more their extent,

independent manner than the personal representatives, the

rights of the person whose legal character he for the time

assumes. In some ways he acquires a wider power than the

bankrupt would have possessed in respect of his obligation.

He takes all the property, real as well as personal, of the

bankrupt, and obligations in respect of each ; and, as his duty

is not merely to represent the bankrupt, but to represent him

224

OPERATION OF CONTRACT.

Part III.

with special reference to the interests of his creditors, he is

aJble to disclaim and so discharge such executory contracts

as he thinks will not be beneficial to the estate.

and limits. But, like the representative of a deceased person, he

is excluded from suing for 'personal injuries arising out

of breaches of contract, 8uch as contracts to cure or to

32 & 33 Vict,

c. 71. s. 3^

Drake v.

Beckham,

n M. &W. 319.

marry.

Part IV. INTEBPBETATION OF CONTBACT. 22$

PAET IV.

THE INTERPRETATION OF CONTRACT.

ArrsB considering the elements necessary to the formation Interpreta-

of a contract, and the operation of a contract as regards ^°j^ ^^^'

those who are primarily interested nnder it, and those to

whom interests in it may be assigned, it seems that the next

point to be treated is the mode in which a contract is dealt

with when it comes before the Courts in litigation. In con- in what the

sidering the interpretation of contract we require to know |S^^* ^^''"

how its terms are proved ; how far, when proved to exist in

writing, they can be modified by evidence extrinsic to that

which is written; what rules are adopted for construing the

meaning of the terms when fully before the Court.

The subject then divides itself into rules relating to evi- Rules re-

dence and rules relating to construction. Under the first head evidaice. ^

we have to consider the sources to which we may ffo for the ^^ (*) *°

. , . construc-

purpose of ascertaining the expression by the parties of their tion.

common intention. TJnder the second we have to consider

the rules which exist for construing that intention from

expressions ascertained to have been used.

2%6 INTERPBETATION OF CONTRACT. Part IV.

CHAPTER I.

Bules relating to Evidence.

Provinces If a dispute should arise as to the terms of a contract

and Jury, made by word of mouth, it is necessary in the first instance

to ascertain what was said, and the circumstances under

which the supposed contract was formed. These would be

questions of fact to be determined by a jury. When a jury

has found, as a matter of fact, what the parties said, and that

they intended to enter into a contract, it is for the Court to

say whether what they have said amounts to a contract, and,

if so, what its effect may be. When a man is proved to have

made a contract by word of mouth upon certain terms, he

Seep. 195. cannot be heard to allege that he did not mean what he

said.

The same rule practically applies to contracts made in

writing. Where men have put into writing any portion of

their terms of agreement they cannot alter by parol evidence

that which they have written. When the writing purports

to be the whole of the agreement between the parties, it can

neither be added to nor varied by parol evidence.

Why oral We may, as regards rules of evidence, dismiss purely oral

need not be Contracts from our consideration. For the proof of a con-

discussed, tract made by word of mouth is a part of the general law of

evidence; the question whether what was proved to have

been said amounts to a valid contract is a question to be

answered by reference to the formation of contract; the inter-

pretation of such a contract when proved to have been made

Chap. I. BULES RELATING TO EVIDENCE. 227

may be dealt with presently under the head of rules of con-

struction.

We will confine our consideration of rules relating to Three mat-

evidence to their effect upon written contracts and contracts inquiry.

under seal; and we may say that admissible evidence ex-

trinsic to such contracts fall^ under three heads.

(i) Evidence as to the fact that there is a document pur- i. Proof of

. i 1 ^ ^ * ^ . . existence of

portmg to be a contract, or part of a contract. document ;

(2) Evidence that the professed contract is in truth what 2. Of fact of

it professes to be. It may lack some element necessary

to the formation of eontract, or be subject to some parol

condition upon which its existence as a contract depends.

(3) Evidence as to the terms of the contract. These may 3- Of terms

Ml J- i.» t.' \. -x i A • • 'J ofcontract.

require illustration which necessitates some extrinsic evidence;

or they may be ambiguous and then may be in like manner

explained ; or they may comprise, unexpressed, a usage the

nature and effect of which has to be proved.

We thus are obliged to consider (i) evidence as to the

existence of a document, (2) evidence that the document is a

contract,. (3) evidence as to its terms.

Before going further, we should note that there is this Difference

difference between contracts under seal and written contracts, formal and

a difference suggested by what has been said before. A ^^^^

contract under seal is a formal contract, deriving its validity p. 39-

from the form of the instrument in which it finds expression :

therefore if the instrument is proved the contract is proved, In the first

unless it can be shown to have been executed under circum- menTis^e

stances which preclude the formation of a contract, or to contract.

have been delivered under conditions which have remained

unfulfilled, so that the deed is no more than an escrow.

But ' a written contract not under seal is not the contract wake v.

Harrop,

itself, but only evidence, the record of the contract.' Even ^"-^n. 77s.

where statutory requirements for writing exist, as under

29 Car. II. c. 3. § 4, the writiiig is no more than evidentiary

of a previous or contemporaneous agreement. A written

Q 2

MS INTERPBETATION of contract. Part IV.

In the offer contaming all the terms of the contract signed by A

writing is fti^d accepted by performance on the part of B, is enough

dence of the ^ enable JB to sue A under that section. And where there

contract, is no such necessity for writing, it is optional to the parties

to express their agreement by word of mouth, by action or

by writing, or partly by one, and partly by another of these

processes.

It is always possible therefore that a simple contract may

have to be sought for in the words and acts, as well as in the

writing of the contracting parties. But in so far as they

have reduced their meaning to writing, they cannot adduce

evidence in contradiction or alteration of it * They put on

paper what is to bind them, and so make the written docu-

Wake V

"?nf N 775. °^®^* conclusive evidence against them/