Commercial law for accountant students

Preface

This book has been written for the accountant student and for the public generally with the hope that it will enable them to understand the legal principles underlying the great subject of law as applied to commercial dealings and usages in general. It is not intended for lawyers and law students, but mainly for business men, and students desirous of obtaining the rudiments of this vast topic, not that they might thereby act as their own lawyer, but by having this knowledge they may better appreciate the importance of calling in a lawyer at the proper time and thus avoid blunders occasioning great annoyance and expense.

The practical questions at the end of each lesson have been gathered from actual cases decided by the courts of various jurisdiction, from questions given at different examinations for the C. P. A. Degree, and others have been arranged by the author. It can readily be seen that these questions cannot be answered unless the text has been thoroughly mastered. The author has not hesitated to avail himself of the many authorities on the various subjects covered in this volume, and is under vast obligation to them for the help which he has received in the use of their books.

Meyer B. Cushner.

Chapter I— Law In General

What is Law — ^Why Law is Necessary — Enforcement of Laws — Municipal Law — Law Merchant — Common Law — Common Law Courts — Equity Courts — Judicial Decisions as Precedent Between Federal and State Courts — The United States Supreme Court is Independent of the Decision of the State Court Under These Circumstances — The State Courts are Absolutely Bound by the Decisions of the United States Supreme Court Even if They Have Views That Are Radically Different. 9-15.

CHAPTER II— LAW IN GENERAL {Continued)

Substantive and Adjective Law — ^What is Substantive Law — What is Adjective Law — Classification of Rights — Remedies — Actions in Personam — Actions in Rem — Property — Questions on Law in General. 16-24.

Chapter Iii— Contracts

The Formation of a Contract — Definition of a Contract — Offer and Acceptance — Revocation of an Offer — Acceptance — Communication of Offer and Acceptance — Who May Enter Into Contracts — Capacity of Parties — Infants — Necessaries of Life — Lunatics, Idiots, and Drunkards — Married Women — Legal Status: Aliens — Agents — Form of Contract — A Legal Consideration — Unreal Consideration — ^Waiver of a Legal Right — Forbearance of a Legal Right — Mutual Consent Necessary — Mistakes in Contract — Fraud — Duress — Undue Influence — Legality of Object — Assignment of the Contract — Assignment of a Right — Notice of Assignment — Assignment by Operation of Law — Discharge of Contract — Discharge by Agreement — Discharge by Express Pro"sasions in Contract — Accord and Satisfaction — Discharge by Substitution — Discharge by Performance — Tender of Performance — Nature of a Tender of Money — Legal-Tender Money of the United States — Discharge by Breach — Discharge by Impossibility of Performance — Discharge by Operation of Law — Practical Questions on Contracts. 25-52.

II COMMERCIAL LAW.

Chapter Iv— Statute Of Frauds

Its Origin — Why the Statute of Frauds Was Enacted — Requirements of the Statute — Section 4th of the Statute — Effect of the Statute on Oral Contracts — Second Clause of Section Four of the Statute — Debt, Default, or Miscarriage — Fifth Clause of Section Four — Section 17 of the Statute — Fraud Committed Under Cover of the Statute and the Remedy — Practical Questions on the Statute of Frauds. 53-59.

Chapter V— Statute Of Limitations

What Are Statutes of Limitation and Their Object — Time of Running — The Statute as Affecting Simple Contracts, Judgments, and Liens — Postponements and Interruptions of the Statute — New Promise and Acknowledgement — Part Payment — Practical Questions on Statute of Limitations. 60-66.

Chapter Vi— Interest And Usury

Definition of Interest — Interest by Express Agreement or Contractual Interest — Interest Allowed as Damages — Rate of Interest — Usury — What Contracts are Usurious — Practical Questions on Interest and Urusy. 67-72.

Chapter Vii— Negotiable Bills And Notes

What is Meant by Negotiability — Formal and Necessary Requisites of Negotiable Bills and Notes — Requisites of Bills and Notes — For a Bill of Exchange — For a Promissory Note — For Both Bills and Notes — An Unconditional Order or Promise — Time of Payment — Specifications of Parties — Words of Negotiation — Delivery of the Instrument — Acceptance of Bills — Indorsements — Different Kinds of Indorsements — Special Indorsement — Without Recourse In dorsement — Conditional Indorsements — Restrictive Indorsement — Essentials of Indorsements — Liability of Parties to Negotiable Instruments — The Acceptor — The Maker — The Drawer — The Indorser — Accommodation Parties — The Accommodated Party — Presentation and Notice of Dishonor — When a Negotiable Instrument is Dishonored — Presentment Necessary — What is Presentment — Time of Presentment — By Whom Presentment is to Be Made — Further Comment on Presentment — Protest — Notice of Dishonor — Certification of Check — Holder of Negotiable Paper — Defense That May be Set up Against Holder — Real Defenses — Practical Questions on Bills and Notes. 73-98.

Chapter Viii— Sales Of Personal Property

What 'is a Sale of Personal Property — The Contract of Sale — Part Payment — Acceptance of Goods — When Title Passes — Bargain and Sale — Agreement to Sell — Duties of the Seller — As to Title — As to Possession — As to the Thing Con-

COMMERCIAL LAW. Ul tracted For — Duties of the Buyer — The Rights of the Seller — Sellers Lien — Stoppage in Transit — Notice Required — Bill of Lading — Rights of the Buyer — Breach of Warranty — Practical Questions on Sales of Personal Property. 99-110.

Chapter Ix— Guaranty And Suretyship

Distinction Between Guaranty, Suretyship and Indorsement — Necessary Form and Requisites of Guaranty — ^Who May Act as Guarantor or Surety — Classes of Guarantees — Guaranty of Collection and Guaranty of Payment — Demand and Notice — Rights of the Guarantor — Rights of Surety After Payment of Debt Against the Principal — Right of Surety Against the Creditor — Contributions of Co-Suretys — Discharge of the Surety — Practical Questions on Guaranty, and Suretyship. 111-121.

Chapter X— Insurance

"What is Insurance — Fire Insurance — Insurable Interest — Reinsurance — ^Warranty and Representation — Life Insurance — Insurable Interest — Representation, Concealment, and Warranty in Life Insurance — ^Waiver and Estoppel — Marine Insurance — Measure of Indemnity — Practical Questions on Insurance. 122-130.

Chapter Xi— Shipping

<I!ontract of Shipping or Affreightment — What is a Charter Party Bill of Lading — By Whom Issued — Operation and Effect of the Bill of Lading — Transfer of Title by Indorsement of Bill of Lading — Salvage — Bottomy or Maritime Loans — Rules of General Average — Practical Questions on Shipping. 131-138.

Chapter Xii— Bailments

■What is a Bailment — Bailor and Bailee — Distinction Between a Bailment and a Sale — Goods taken on the Installment Plan — Division of Bailments — Examples of Bailments of the First Class — The Degree of Care Required — Use of the Property — The Degree of Care Required in Second Class o Bailments — Degree of Care and Responsibility in the Third Class of Bailments — The Pledge or Pawn — Collateral Security — Pledge Distinguished from Chattel Mortgage — ■ What May be Pledged and for What — ^What May Not be Pledged — Degree of Care Exacted for Pledge — Right of Possession of Pledge — Duty of Pledgee to Return — Remedies of the Pledgee — Pawnbrokers — The Hire of Chattels for Personal Use — Keeping or Storage — ^Warehousemen — ^Warehousemen's Lien — Warehouse Receipts — Common Carriers — ^What is a Common Carrier — ^Who Are Common Carriers

IV COMMERCIAL LAW.

— ^When Common Carriers May Refuse to Carry Goods — Liability of Common Carriers — Reason for the Liability — When the Rule of Liability Does Not Apply^ — Common Carrier's Lien — Telegraph Companies — Duty of the Company — Stipulations in Contract Limiting Liability — Inn- Keepers — Who Are Inn-Keepers — ^Who is a Guest — Inn-Keeper's Liability for the Effects of their Guests — Inn-Keeper's Lien on the Goods of His Guest — Practical Questions on Bailments. 139-164.

Chapter Xiii— Partnership

What is a Partnership — Firm is Not a Legal Entity — Formation of Partnership — Articles of Agreement — Competent Persons — Lawful Purpose — Business Owned in Common — Classes of Partners — Business Carried on for Common Bene- ^ fit — Powers of Partners — Firm Name — ^What Names May be Adopted — Right to Use the Firm Name as a Trade Name — The Property of the Firm — Partners Interest in Firm Property — Partnership Real Estate — Termination of Partnership — By Act of the Parties — By Operation of Law — Notice of Dissolution — Distribution of Firm Property upon Dissolution — Proportion of Profits and Losses — Limited Partnership — How Formed — Dissolution and Notice — Practical Questions on Partnership. 165-181.

Chapter Xiv— Joint Stock Companies

What are Stock Companies — Joint Stock Companies Distinguished from a Partnership — From a Corporation — Rights and Liabilities of the Members — Dissolutions of Joint Stock Companies — Practical Questions on Joint Stock Companies. 182-185.

Chapter Xv— Corporations

What is a Corporation — Public and Private Corporations — Nature and Purpose — Power and Rights of Corporation — Creation of Corporations — First Step — Second Step — Third Step — Promoters — Who is a Promoter — Contracts of Promoters — Promoters Relation to the Corporation — Capital and Capital Stock — Classes of Stock — Subscription of Stock — ^Watered Stock — Certificate of Stock — Transfer of the Stock — Lost Certificate of the Stock — Management of the Corporation — Meetings — Cumulative Voting — Officers and Agents of the Corporation — The Board of Directors — Liabilities of the Directors — Property and Contracts — Real Property — Personal Property-Contracts-Accommodation-Parties-Ultra Vires Acts of the Corporation — Liability of Shareholders — Dividends — Stock Dividends — ^Who Owns the Dividends — Practical Questions on Corporations. 186-213.

COMMERCIAL LAW.

Chapter Xvi— Agency

Definition of Agency — Who is an Agent — Distinction Between Agent and Servant — Who May Act as Principal — ^Who May Act as Agent — Appointment of Agent — Express Appointment by Parole and in Writing — Agency by Estoppel — Agency by Necessity — Agency by Ratification — General or Special Agents — Attorney at Law — Attorney in Fact — Brokers — Factors — Shipmaster — Bank Cashier — Auctioneers — Termination of the Agency — By Agreement — By Act of Either Party — By Operation of Law — Agency Coupled With an Interest — Notice of Termination — Obligation of Principal to Agent — Obligation of Agent to Principal — Principal's Liabihty for Agents' Acts — What is the Apparent Scope of the Agents' Authority — Liability for Agent — Torts — Criminal Liability — Agents' Liability — Practical Questions on Agency. 214-234,

Chapter Xvii— Real Property

Distinction between Real and Personal Property — Land — Fixtures — Real Fixtures — Chattel Fixtures — What Fixtures are Removable — Intention — Character of the Annexation — Severance— Constructive Annexation — Nature of Fixtures — Trade Fixtures — Domestic Fixtures — Party Making Annexations — Time of Removal — Estate — Estate in Fee-Simple — Estates Tail — Estate of Life — Estate for Years — Estate at Will — Estates by Dowers — Estate of Curtesy — Acquirement of Real Estate — Conveyance of Real Property — Requisites of a Deed — Various Kinds of Deeds — Recording the Deed — Mortgages — Definition of a Mortgage — Mortgage is a Lien — Rights and Liabilities of the Mortgagor — Assignment of Mortgage — Satisfaction of the Mortgage — Foreclosure of the Mortgage — Practical Questions on Real Property. 235-259.

Chapter Xviii— Bankruptcy

Purpose of Bankruptcy Laws — ^Who May Apply to be Adjudged a Bankrupt — Voluntary Proceedings — The Inventory and Schedules — Involuntary Proceedings — Acts of Bankruptcy — 1st. Fraudulent Conveyance — 2d. Giving Creditors Preference — 3d. Assignment for the Benefit of Creditors — 4th. Removal or Concealment of Property — 5th. An Admission by the Debtoi' — Creditor's Petition — Inventory and Schedules — Exempt Property — Subsequent Proceedings — Compositions — Discharge of the Bankrupt- Effect of a Discharge — Practical Questions on Bankruptcy. 260-286.

VI COMMERCIAL LAW.

Chapter Xix— Estate Of Persons Deceased

Definition of a Will and Codicil — Form of a Will — ^Who May Make a Will — Probate of Wills — Intestacy — Executors and Administrators — Appointment of Executors and Administrators — Power and Duty of Executors and Administrator — Payments and Debts of Legacies — Final Accounting of Executor or Administrator — Preparing the Account — Commissions and Expenses Allowed in Administrating the Estate — Practical Questions oh Estates of Persons Deceased. 287-307.

Chapter Xx— Landlord And Tenant

How the Relationship is Created — The Lease — ^What May be Leased — Rights of the Landlord — Rights of the Tenant — Right of the Tenant to Remove Fixtures — Practical Questions on Landlord and Tenant. 308-316.

Chapter Xxi— Mechanics' Lien

Definition and Object — Property Subject to the Lien — Priority Between Mechanics' Liens and Other Encumbrances — How the Lien is Perfected — Contractor, Sub-Contractors and Materialmen — Enforcement of the Lien — Lis Pendens — Practical Questions on Mechanics' Lien. 317-323.

APPENDIX— ANALYTICAL TABLES.

Private Rights and Torts which Result from their Breach — Personal Rights — Absolute Rights — Relative Rights — Personal Property — Its Sub-Di^asion — How Title is Acquired — Estates as to Time, Duration, Number. 324-330.

GENERAL REVIEW.

Fifty Practical Questions Designed for a General Review. 331- 346.

Chapter I. Law In Geneeal

What is La^v.

Law in its broadest sense, means a rule of action or conduct, prescribed by a superior, which the inferior is bound to obey, and in those creatures that have neither the power to think, nor to will, such rules must be invariably obeyed so long as the creature itself subsists, for its existence depends on that obedience. These rules would be regarded as the law of nature.

In this volume we will consider the rules of human action and conduct, that is, the precepts by which man the highest of all creatures, being blessed with both reason and free will, is commanded to avail himself of these faculties to regulate his behavior.

Why Law is Necessary.

From the first formation of society can be traced the various rules which time and civilization have developed into fixed laws of conduct, in order to promote the fiocial welfare of the body adopting them.

A prominent writer treating of the necessity for law says, " If a man were to live in a state of nature there would be no occasion for any other laws than the law of nature and the law of God. Neither could any other law possibly exist, for a law always supposes some superior who is to make it; and in a state of nature, we are all equal, without any other superior but Him who is the author of our being. But man was formed for society, and, as is demonstrated by the writers on this subject, is neither capable of living alone, nor indeed has the courage to do it." Since man forms a component part of society, it becomes necessary that out of consideration for the comfort, peace, and well-being of the other members of the community, he should do certain things, and refrain from doing certain other things, and thus promote the best interests of the whole body. The adoption of such rules of conduct forms the basis for the laws governing the entire community. Enforcement of Laws.

It is readily seen, that while laws may be enacted for the regulation of the conduct of the individuals comprising the social body, yet such laws unless capable of being enforced can have no beneficial effect, for from our very understanding of law, it must be a rule of conduct prescribed by a superior and which the inferior is bound to obey, the superior must be in a position to enforce obedience. In other words, an executive power aside from the legislative power. Every law enacted therefore must contain some provision as to the enforcement, otherwise it is a nullity. Municipal Law.

Municipal law is defined to be a rule of civil conduct prescribed by the supreme power in a state commanding what is right, and prohibiting what is wrong. While

COMMON LAW. 11

the natural and moral laws regard man as a creature and point out his duty to himself and to his neighbor considered as an individual, municipal or civil law regards him also as a citizen and bound to other duties towards the community: duties which he must participate in, because he also enjoys the rights and benefits of a common union.

Law Merchant.

The law merchant has been defined as the general body of commercial usages in matters relative to commerce. It is a system of law which does not rest exclusively on the positive institutions and local customs of any particular country, but consists of certain principles of equit)^ and usages of trade, which general convenience and a common sense of justice have established, to regulate the dealings of merchants in all the commercial countries of the world.

Common Law.

By the common law is meant, that system of law which has prevailed in England and in this country and includes those principles, usages, and rules of action applicable to the government and security of persons and of property which do not rest for their authority upon any express or positive declaration of the will of the legislature. It designates the unwritten, as distinguished from the written law. The common law is also known as, " that law which derives its force and authority from the universal consent and immemorial practice of the people."

In the United States the common law has been adopted as the foundation of jurisprudence in nearly all the states ; while many of the most important and useful common law principles have been embodied in the Constitution of the United States and of the several states.

is commercial law.

Common Law Couets.

The courts which enforced the common law were known as common law courts. These courts proceeded in a very tedious and slow manner in enforcing the law. They abounded in technicalities. From the earliest formation of these courts, the custom grew to report the cases that were tried in them. These reports embodied a statement of the question involved; the legal argument of counsel for each of the litigants; and the decision of the judge with the reasons therefore. In this way the reports acted as precedents and were guides for the determination of similar questions that might be in dispute.

The convenience of this method of procedure cannot be too fully appreciated. It resulted in fixing a rule of law upon which the counsellors might rely in giving suggestions and legal advice to their clients.

As time went on, these precedents accumulated and in many instances outlived their usefulness, for while they may have been well suited to the customs and business usages of the times in which they grew up, modern developments in the affairs of mankind required either, the modification or the complete abolishment of these precedents. The first method is accomplished by the judges themselves, who becoming convinced that a precedent as applied to a particular case coming before them works a great injustice, either over-rule the precedent applicable to this case, or distinguish it from one already adjudicated. Then again the precedent could be abolished entirely by act of the legislature, which, when it became necessary, would pass a law correcting the objectionable precedent. Such enactments of the legislature form what is known as the statutory law.

judicial decisions federal and state courts. 13

Equity Courts.

The equity courts originally exercised jurisdiction over equitable rights only, because the other courts refuse to recognize equitable rights. But these equity courts never interfered with the other courts and in turn were never interfered with. So that now the equity courts exercise jurisdiction over both legal as well as equitable rights. Equity courts have the power to invade at will the provinces of other courts because equity jurisdiction is a prerogative jurisdiction and is exercised in legal contemplation by the sovereign. Its object in obtaining jurisdiction over rights which it is the province of the other courts to protect, is to promote justice by supplying defects in the remedies which the courts of law afford. The extent of this jurisdiction is co-extensive with its objects, equity assuming jurisdiction over legal rights so far as justice can be promoted thereby.

It often happens that the protection afforded by the courts of law to legal rights is insufficient and inadequate, and equity courts are able to supply these shortcomings, chiefly because it has a different method of protecting these rights, and where justice requires ic, compulsion or coercion is used by Equity Courts to enforce its mandates.

Judicial Decisions as Precedents Between Federal AND State Courts.

United States Courts acquire jurisdiction because the plaintiff and the defendant are citizens of different states or countries, or because the question in dispute involves the laws of the United States or of the Constitution. The United States Supreme Court is the ultimate tribunal of appeal, whether the case is from a State court or an inferior United States court.

The United States Supreme Court is Independent OF the Decisions of the State Court Under These Circumstances.

1. Where the State court decisions are inconsistent with the decisions rendered by the United States Supreme Court on constitutional law or involving construction of Federal Constitution or Treaties or Acts of Congress or settlement of Federal questions.

2. Where the question is one of general commercial law, not depending on State statute or usage.

3. Where the question is one depending on general public policy.

4. Where the question is one of general equity jurisprudence.

The State Courts are Absolutely Bound by the Decisions of the United States Supreme Court Even if They Have Views That are Eadically Different.

Where the question arises under the Constitution or the laws of the United States, or treaties made by authority of the National Government. Decisions on questions other than those herein stated are not binding on State courts, but, nevertheless, such decisions are entitled to great respect.

The United States Supreme Court is bound by the settled construction placed upon the statute of a State by the State court, and ought to adopt and apply them, unless involving a question of Federal law, such as whether the statute itself, conforms to the Constitution and laws of the United States, then, if as yet the State courts have not given any interpretation or decision, or there are conflicting decisions on the statute, the United States Supreme Court will give its own.

UNITED STATES COURTS. 15

The decisions of one State Court are not binding on the courts of another state, but, nevertheless are entitled to great respect in similar questions ariiing in the courts of the latter state.

Chapter II. Law In Geneeal (continued)

Substantive and Adjective Law.

Substantive law is the law of primary rights and duties. These rights and duties do not arise from injuries or from violation of other rights and duties. In 60 far as the law defines what these rights and duties are, it is termed substantive law.

Adjective law is remedial law; so far as it provides B method of aiding and protecting the enforcement of rights and duties^ it is a law of procedure.

Eights.

Bights are one man's capacity of influencing the acts of another by means not of his own strength, but by the opinion or force of society. When we say a man has a right to do a certain thing; to the possession of an article; or to be treated in a certain manner, it implies that the public will consent to his doing these things, and object to anyone interfering with him in so doing. So we may say that right is a name given to an advantage that has the public consent. A legal right would be such as is recognized by law and enforced by the power of the State, the validity of a right is the force lent to it by the State, thereby causing its obligatory character.

ABSOLUTE AND RELATIVE RIGHTS. 17

The character of the elements from which a right results is as follows:

First. A person in whom the right resides, who is clothed with the right or who is benefited by its existence.

Second. An object over which the right is exercised. This object may be a physical thing or what the law chooses to treat as such.

Third. Acts or forbearances which the person in whom the right resides is entitled to exact.

Fourth. A person from whom the acts and forbearances can be exacted, against whom the right is available, whose duty it is to act or forbear for the benefit of the subject of the right.

Absolute and Eelative Eights.

An absolute right is a right that is born with an individual, while a relative right is one springing from and dependent upon an absolute right, e. g. Thus B's right to the enjoyment of life is an absolute right, and there is a duty or obligation imposed on the rest of the world not to interfere with his right: but if A, despite that right and his obligation not to interfere with it, should by some negligent act cause B injury and put B's life in danger, there would be vested in B a relative right, a right to damages and compensation for injuries received, which right has sprung into existence on the violation of B's absolute right by A.

Absolute rights are divided into rights of ownership and personal rights, while relative rights imply both a right on one side and an obligation or duty on the other. The term obligation as used here implies both the duty and the right.

The entire sum of human rights are the absolute rights, and these are never increased by the addition of relative rights. For it is possible to create innumerable relative rights founded on one absolute right, and the decrease of the latter is commensurate with the increase of the former.

Classification of Eights.

Eights are generally divided into two classes, namely, rights in Eem, and rights in Personam. Eights in Eem are rights existing in a person with respect to an article or subject of property inherent in his relation to it, implying complete ownership with possession, and available against the world. Eights in Personam, on the other hand, are rights against a person, a right which gives its possessor the power to oblige another person to give or procure, to do or not ta do a certain thing. Thus, for example, take the rights in Personam arising from the formation of a contract made by A with B for the purchase and sale of B's horse, and we would have the following:

1. A would have a right to the horse in question as against B, as long as the ownership still resides in B.

2. A right to force B to deliver the horse in the specific performance of his contract or give satisfaction if it is detained.

3. A right to demand satisfaction for the breach of the contract if B sells and delivers the horse to another buyer.

4. As against a stranger (buyer) A has no right whatever to the horse, so that A cannot force the buyer to yield the horse to him, nor to make satisfaction for detaining a thing of A's.

5. Suppose, on the other hand, B delivered the horse to A, as per contract, then the horse becomes A's, and he now has a right in Eera, a right to the thing delivered as against all mankind.

CREATION OF EQUITABLE RIGHTS. 19

6. In consequence of the fifth right, A can compel the restitution of the horse from any person who may take and detain it.

7. A can force any one who does take and detain the horse to give satisfaction to him for injury to his right of ownership.

Equitable Eights.

The different methods by which equity creates equitable rights are :

I. Sub-obligation II. Mortgages

III. Subrogation

IV. Marshalling of assets.

1st. Where from one legal right an indefinite number of equitable rights and obligations are created. Thus by diagram let us suppose that A is the legal owner of a right and he assigns to B, B to C, C to D, etc.

Then we will have the following : A is bound to B.

B is bound to C.

C is bound to D.

D to no one (nobody after him).

Thus, we have as many equitable obligations created as there are men in line, less 1 or 3 equitable obligations implying the same number of equitable rights.

2nd. Mortgages. Where A mortgages to B (1st. mortgage), we have created an equitable right of redemption in A and equitable obligation to reconvey in B. On the second mortgage to C, A gives his first equitable right to C, and in turn gets a new equitable right of redemption of the first equitable right from C, who is under equitable obligations to reconvey same on payment. This may go on any number of times.

3rd. Subrogation. A is the debtor and is under obligations to B, the creditor, to the sum of $5,000. C, who is surety for A, has also bound himself to B for the payment of the amount due by A. The time for payment has come. A does not pay. Then B has the option of suing either C or A. Suppose he does sue C and recovel'S from him, thus releasing A of his obligation: but this is surely unjust, so equity steps in and says, we will not say that C has paid A^s obligation but simply bought his debt, and so equity creates an equitable right in C against A for the sum paid.