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supply a city with a continuous and adequate supply of water, or of illuminating gas or electricity, breaches its contract by failing and neglecting to furnish the stipulated supply, the municipality has the right to invoke the aid of a court of equity to enforce the rescission of the contract, since the remedy at law by an action for damages is in such cases wholly inadequate.22 It must, however, act with reasonable promptness, and may be held to have waived its right to terminate the contract by delaying until after the contractor has incurred large expenses in endeavoring to bring the plant up to the required capacity or in rebuilding a plant destroyed by fire.23

For similar reasons it is held that where a municipality has issued bonds and has paid the interest on them for a number of years, without questioning their validity, a court of equity will not, at the instance of the municipality, cancel them in the hands of an innocent purchaser for value, even though they are actually invalid. And where a town, by vote taken in town meeting, has ratified the doings of the selectmen in borrowing money and giving a note therefor in behalf of the town, it cannot at a subsequent meeting rescind such ratification.25 So, a municipal council, after allowing claims against the city with no effort to investigate them, cannot order an investigation and rescind their action and recover back the money paid, because of facts which they did not know, but which they might have as

22 City of Columbus v. Mercantile Trust & Deposit Co., 218 U. S. 645, 31 Sup. Ct. 105, 54 L. Ed. 1193. See Mills v. City of Osawatomie, 59 Kan. 463, 53 Pac. 470; Kalberg v. Meade, 50 Wash. 268, 97 Pac. 59. Compare Seymour Water Co. v. City of Seymour, 163 Ind. 120, 70 N. E. 514, holding that rescission of a franchise granted by a city to a water company, in acceptance of which the water company agreed to furnish a certain pressure for fire protection, and to furnish water fit for domestic purposes, will not be decreed by a court of equity on the ground that the company has not complied with its contract in these respects, since the city has an adequate remedy at law by mandamus to compel the water company to fulfill the conditions of its contract.

23 Mills v. City of Osawatomie, 59 Kan. 463, 53 Pac. 470.

24 Town of Cherry Creek v. Becker, 123 N. Y. 161, 25 N. E. 369. And see Powell v. City of Louisville, 141 Fed. 960, 73 C. C. A. 276. 25 Brown v. Winterport, 79 Me. 305, 9 Atl. 844.

certained by reasonable diligence.20 But a municipal corporation may have its grant or contract set aside on the ground of fraud, provided it is in a position to do equity by restoring the other party to his former situation.27 And rescission is justified where it appears that a party has obtained a contract to do work for a county or municipality by means of bribery or corruption or by arranging to stifle competition,28 or that he is proceeding to carry out the contract in a manner, or by means, forbidden by the statute law of the state,29 or where the municipality has expressly reserved the right to discontinue and annul the contract whenever it appears that the contractor has failed to comply with its terms and conditions.30 But a court will not set aside a contract by a municipal corporation for the purchase of property, which has been delivered to it, on the mere ground that it made a bad bargain and paid more than the property was worth, and that the action of the city council in authorizing the contract was dictated by improper motives.1 And conversely, one contracting to do work for a municipal corporation is not entitled to a rescission of the contract merely because he finds conditions. more difficult or the work harder or more expensive than he expected, where he was not in any way deceived or misled by the officers of the municipality.32

It should be added that a license granted by a state or a municipality, authorizing the grantee to do some act or engage in some occupation which would be unlawful without such permission, is not a contract, and is not granted in the exercise of business powers, but of governmental powers. Hence it is not subject to the rules which govern

26 Advertiser & Tribune Co. v. Detroit, 43 Mich. 116, 5 N. W. 72; Wayne Co. v. Randall, 43 Mich. 137, 5 N. W. 75; McArthur v. Luce, 43 Mich. 435, 5 N. W. 451, 38 Am. Rep. 204.

27 Oakland v. Carpentier, 21 Cal. 642.

28 Jennings County Com'rs v. Verbarg, 63 Ind. 107.

29 Portland v. Baker, 8 Or. 356.

30 Bietry v. New Orleans, 24 La. Ann. 21. And see Powers v. Yonkers, 114 N. Y. 145, 21 N. E. 132.

81 City of New Orleans v. Warner, 175 U. S. 120, 20 Sup. Ct. 44. 44 L. Ed. 96,

32 Sanitary District of Chicago v. Ricker, 91 Fed. 833, 34 C. C.

ordinary contracts, but may be revoked, annulled by subsequent legislation, or subjected to additional restrictions, even though granted for a specific time, and even though a fee or other consideration was paid for it.33

§ 334. Maritime Contracts.-The rule of caveat emptor applies to the sale and purchase of a ship, at least in so far as that the purchaser is under the duty of making an examination for himself and exercising his own judgment as to the condition of the vessel, and he cannot rescind because of faults or imperfections which were patent and could have been discovered by such inspection. But, at least according to the doctrines of the civil law, the seller of an article impliedly warrants it against any secret or hidden defects, and hence where one buys a ship, which is partly in lading at the time, and on commencing the voyage she proves to be rotten and unseaworthy, he may counterclaim damages against the price.35 And where a ship-builder constructs a vessel on the order of a purchaser, there is an implied warranty that she shall be fit for service generally or for the particular service for which she is intended, if that was stated to the builder, and this includes both materials and workmanship.36 Where a vessel is sold "with all faults," this means faults which a ship may have "consistently with being the thing described," and hence where a vessel was advertised for sale as "copper fastened," and it proved that she was only partially copper fastened, and would not be called in the trade a copper-fas

33 Stone v. Mississippi, 101 U. S. S14, 25 L. Ed. 1079; Boyd v. Alabama, 94 U. S. 645, 24 L. Ed. 302; Moore v. Indianapolis, 120 Ind. 483, 22 N. E. 424; Fell v. State, 42 Md. 71, 20 Am. Rep. 83; People v. Flynn, 184 N. Y. 579, 77 N. E. 1194; Portland v. Cook, 48 Or. 550, 87 Pac. 772, 9 L. R. A. (N. S.) 733.

34 Sanford & Brooks Co. v. Columbia Dredging Co., 177 Fed. 878, 101 C. C. A. 92; The Sam Slick, 1 Sprague, 289, Fed. Cas. No. 12,283. As to the application of the rule of caveat emptor to sales of personal property generally, see, supra, §§ 61, 64, 113, 178.

35 Bulkley v. Honold, 19 How. 390, 15 L. Ed. 663. As to latent defects in personal property sold, generally, see, supra, §§ 64, 123.

36 Cunningham v. Hall, 4 Allen (Mass.) 268. As to the implied warranty of fitness for use where article is sold by the manufacturer or producer of it, or is specially made to order for the customer, see, supra, §§ 189, 190.

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tened vessel, it was held that the seller was liable as for a breach of warranty.3 87 But where a vessel is explicitly sold "with all faults," the purchaser cannot repudiate his contract on discovering latent defects, although those defects were known at the time to the seller, provided the latter did nothing to conceal them from the purchaser.38 On the other hand, if the seller takes means to conceal from the purchaser faults which he knows to exist, and also makes a false statement as to the condition of the hull, this constitutes a fraud which will justify rescission of the sale."

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In regard to charter parties or contracts of affreightment, the ordinary rules governing the rescission of contracts will generally be found applicable. Thus, neither party is at liberty to abandon the contract of affreightment except for legal cause or with the consent of the other party. Where a charterer, without justification, refuses to accept the vessel when tendered for loading, or fails to furnish a cargo, this will justify the owner in disregarding the agreement and in seeking other employment for his ship, though it has been ruled that a new charter for the vessel effected by the owner with a third person, in these circumstances, is for the benefit of all concerned, and is not a rescission of the original charter in such sense as to release the charterer from liability.42 And the owner is not bound to accept the charterer's renunciation of the contract, but may at his option treat it as still in force, and in such case he is not required to accept other employment for the vessel until the lay days for loading allowed by the charter have expired and there has been an actual breach of the contract by the charterer. In one of the cases, it appeared

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37 Shepherd v. Kain, 5 Barn. & Ald. 240.

38 Baglehole v. Walters, 3 Camp. 154; Pickering v. Dowson, 4 Taunt. 779; Bywater v. Richardson, 1 Ad. & El. 508.

39 Schneider v. Heath, 3 Camp. 506.

40 Clark v. Massachusetts F. & M. Ins. Co., 2 Pick. (Mass.) 104, 13 Am. Dec. 400.

41 The Alida, 14 Phila. (Pa.) 602; Wilkie v. Schultz, 35 La. Ann. 491.

42 Benson v. Atwood, 13 Md. 20, 71 Am. Dec. 611.

48 Cornwall v. Moore (D. C.) 132 Fed. 868, citing Hochster v. De La Tour, 2 El. & Bl. 678; Avery v. Bowden, 5 El. & Bl. 714.

that a member of a firm of ship-brokers had chartered a vessel to carry a certain kind of cargo, but was unable to furnish the cargo, and his firm rechartered the vessel for a cargo of a different character, also paying to the ship a sum in addition to the freight named in the second charter. But it was held that, as none of these circumstances showed that the master agreed that the second charter should replace the first, he was entitled to recover damages if the vessel was delayed or the freight of the second cargo was of less value than the first." But a contract of affreightment is annulled by a change of destination, made without the assent of the other party.45

A charter-party implies a warranty of seaworthiness, even. if it is not expressed, and this covers visible or patent faults as well as latent or hidden defects, and if, in consequence of either, the ship is not actually seaworthy, the charterer may rescind and refuse to accept her, or, if he uses her, may recover for damages to cargo.1o And the owner of a chartered vessel which becomes unseaworthy on the voyage to the port of loading, who fails to report her disability on her arrival, in consequence of which a cargo is procured or prepared for shipment, is liable for the damage legally resulting to the charterer from such inability to take it or from delay in making repairs. But the hirer of a vessel who accepts her after an examination or inspection, as in compliance with the terms of the contract, cannot hold the owner to an implied warranty against defects which were then discoverable. He is then supposed to rely on his own inspection, is charged with such knowledge as it ought to have brought him, and cannot complain of injury resulting from defects which he passed over or failed to discover, if his examination was not in any way interfered with or rendered ineffective by the practices of the owner.48 A pro

44 Chamberlain v. Pettit (D. C.) 49 Fed. 109.

45 Boyle v. Dickenson, 6 Mart. N. S. (La.) 102.

46 Charles Killam & Co. v. Monad Engineering Co. (D. C.) 216 Fed. 438; Ye Seng Co. v. Corbitt (D. C.) 9 Fed. 423; Hubert v. Recknagel (D. C.) 13 Fed. 912; McCann v. Conery (D. C.) 11 Fed. 747; Kopitoff v. Wilson, 1 Q. B. Div. 377.

47 The Ask (D. C.) 156 Fed. 678.

48 The Presque Isle (D. C.) 140 Fed. 202; Philadelphia & G. S. S. Co. v. McCauldin, 202 Fed. 735, 121 C. C. A. 197; Sanford & Brooks

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