66.　Commercial partnerships and companies can only be formed for the purpose of carrying on jointly a commercial business.

67.　Partnerships and companies formed with the object of carrying on an illegal or prohibited business are void ab initio.

68.　Partnerships and companies for the carrying on of whose business the consent of some public authority is by law or ordinance required cannot be formed unless such consent is obtained.

69.　The formation of a partnership or company is, with regard to third persons, of no effect as such, until it has been duly registered and published.

70.　Every partnership and company must have a firm name and a seal of its own, and must have a definite seat of business.

71.　The firm name must be engraven on the seal, and a copy of the seal must be deposited with the Commercial Register at the Court in Article 18 mentioned. The same formality is to be observed on any subsequent alteration of the seal taking place, or upon a new seal being adopted.

72.　The firm name and seal are placed upon all communications addressed to public authorities, upon reports, certificates of shares, bills of exchange and promissory notes, and, generally, upon all documents by means of which the partnership or company acquires any rights or enters into any obligations.

73.　Every partnership and company has its own separate property and independent rights and duties. It can, in particular, in its own name acquire rights of claim and incur liabilities, acquire property movable and immovable, and sue and be sued in Court.

136.　A limited partnership is one in which the liablity of its members is limited to the amount of their contribution in money or things of value, unless in the case of one or more of them it is otherwise determined by contract.

137.　Subject to the rules in this Section contained, the provisions governing ordinary partnerships apply also to limited partnerships.

138.　In the case of a limited partnership the registration and publication must, in addition to the particulars in Article 79, ii--vi. specified, contain :--

139.　The firm name of a limited partnership may not contain the family names of partners other than those who are unlimitedly liable. The firm name is in every case to conclude with the words “ Goshi-kwaisha”

140.　With the exception of partners with unlimited liability, and directors, the partners can, on their own account as well as on that of third persons, carry on or take part in transactions falling within the same description of trade as that pursued by the partnership.

141.　All the partners, unless it is otherwise provided in the contract, are equally entitled and bound to represent the partnership.

142.　Where the partnership consists of more than seven partners, it appoints one or more of the partners to be directors, either at once in the partnership contract or, in the event of such case arising at a later period, by means of a resolution of the partnership, for the validity of which a majority of three-fourths of all the partners is required.

143.　The partners entitled to management or directors have the exclusive right of representing the partnership in all its affairs, judicial and extra-judicial ; they are, however, bound by the provisions of the partnership contract and the resolutions of the partnership.

144.　Any restriction placed upon the representative powers of the partners entitled to management or directors is of no effect with regard to third persons entering into transactions with them in good faith.

145.　Subject to the consent of the partners entitled to management or directors, a partner with limited liability may transfer his share in the partnership to a third person, who thereupon enters into all the rights and duties of the transferor.

146.　It may be previously determined in the partnership contract or by a resolution of the partnership arrived at as in Article 142 mentioned that, all or some one or more of the partners- entitled to management or directors, shall be unlimitedly liable for the partnership obligations incurred during their conduct of business.

147.　The unlimited liability mentioned in the last preceding Article of any partner entitled to management or director terminates at the expiration of one year from the date of his retirement from office.

148.　The partners entitled to management or directors are to convene an ordinary general meeting at least once in every year, and to convene an extraordinary general meeting whenever they deem necessary or upon a requisition made by one fourth of all the partners.

149.　Seven days at least prior to the date of a general meeting, the object of the meeting and copies of the documents to be laid before it must be communicated to each partner.

150.　At the ordinary general meeting, which is to be held immediately after the close of the business year, a balance sheet and a report on the business of the preceding year and on its results are to be submitted to the partners for their examination and approval. The question of approval is decided by resolution passed by a majority of the members present.

151.　To pass a resolution deciding any matter laid before an extraordinary general meeting an absolute majority of all the partners is required.

152.　Where the number of partners present at such general meeting is insufficient to pass a resolution by the majority required by the preceding Article, a provisional resolution may be passed. In such case the resolution passed must be communicated to all the partners and a fresh general meeting convened, with an express notification that the resolution will become effective if confirmed by a majority of those present at such subsequent general meeting.

153.　No interest or dividends may be paid to partners so long as the partnership capital is diminished by losses.

256.　Partners entitled to management and directors are liable to a fine of not less than 5 yen and not exceeding 50 yen in the following cases :--

257.　Directors of joint-stock companies are liable to a fine of not less than 5 yen and not exceeding 50 yen in the following cases :--

258.　Directors of joint-stock companies are liable to a fine of not less than 20 yen and not exceeding 200 yen in the following cases:--

259.　The liquidators of joint-stock companies are liable to a fine of not less than 10 yen and not exceeding 100 yen in the following cases:--

260.　Liquidators of joint-stock companies are liable to a fine of not less than 20 yen and not exceeding 200 yen in the following cases :--

261.　The fines prescribed in the preceding Articles are imposed by order of the Court. Against such order immediate complaint may be raised.

262.　Partners entitled to management, directors, inspectors or liquidators are in the following cases, liable to a penalty of not less than 50 yen and not exceeding 500 yen, and in cases of an aggravated character are in addition liable to be punished with major imprisonment for a period not exceeding one year:--

263.　Promoters making false statements concerning the subscriptions for shares are liable to a penalty of not less than 20 yen and not exceeding 200 yen.

264.　The penalties prescribed in the two preceding Articles are to be inflicted by way of criminal procedure.

265.　Contracts relating to joint trade are not subject to the provisions of this Code respecting partnerships and companies. No partnership or company and no partnership or company property can be created by virtue of any such contract.

266.　Where two or more persons engage in individual commercial transactions or undertakings on joint account, there exists a temporary association (Tozakumiai), and each participant is with regard to third persons directly and jointly and severally entitled and bound by any acts done for the purpose of carrying out the contract by one or more of the participants or by all of them combined, or by their common agent.

267.　Where two or more persons are separately engaged in individual commercial transactions or undertakings, or in commercial businesses, but have agreed to participate in the profits and losses arising therefrom, there exists a profit and loss association (Kiobunkumiai) and each participant is jointly and severally entitled and bound as in the preceding Article provided ; he is, nevertheless, entitled, upon a claim arising from the acts of other participants being made against him, to plead the prior remedy of the plaintiff against such other participants.

268.　Where a person participates in the commercial business of another by contributing property thereto on the understanding that he is to share, in return for such transfer of ownership, the profits and losses without his name appearing in the firm name and without taking any part in the conduct of business, there exists a dormant association (Tokumeikumiai), and he is, with regard to third persons, liable in respect of the acts of the active member to the extent only of so much of his contribution as is not paid up.

269.　In the absence of any express stipulation with regard to the share of such contributor in the profits and losses of a dormant association, such share is to be calculated according to the proportion borne by his contribution to the total capital of the business.

270.　No profits are divisible until provision has been made for any reduction of the contribution resulting from losses. A dormant associate is, nevertheless, not bound to make good with profits due but not received, or with profits already received, any deficiency in his contribution incurred by subsequent losses.

271.　A contract of dormant association, if no fixed duration is therein agreed upon, can be cancelled by a six months notice ; it is also terminated by the bankruptcy or decease of the active member or by the discontinuance of the business.

272.　Upon cancellation of the contract the contribution of the dormant associate must be returned to him, after deducting the losses and debts falling to his share.

273.　A dormant associate is entitled upon cancellation of the contract and also at the end of each business year, to claim production of an account and inspection and examination of the trade books and papers.

274.　The conclusion of commercial contracts may be either express or implied.

275.　The contents of commercial contracts are determined by the actual, definite, and common intent of the parties thereto, construed according to the usages of trade and the reasonable aim of traders.

276.　Express contracts may be concluded either in writing or verbally, or by signs.

277.　Where the principal subject-matter of a contract exceeds fifty yen in value, the contract, unless performance thereof takes place forthwith, is to be formed in writing and delivered.

278.　The requirement of formation in writing is fulfilled by a formal document of contract, or by letters, telegrams, accounts, tickets, and any writing whatever, which bear the signature, or in the place thereof the names, of the person bound or his representative.

279.　With regard to the contents of the contracts in Article 277 specified, evidence or counter-evidence is not admissible unless it is in writing, except in so far as there is question of the construction of the terms of the contract in conformity with Article 275, or of proof of mistake, coercion, or deceit, or of facts which are mentioned in the contract itself, but without binding intent.

280.　The contracts mentioned in Article 277 are valid even where they are not formed in writing, if they are subsequently, and in the case of bilateral contracts by both the parties thereto either actually performed, or recognized in writing.

281.　An implied contract exists where there is tacit consent to a contract proposal, and in all cases where a person does or abstains from doing something, to which an obligation or right of claim is by law or the usages of trade attached.

282.　Consent by silence to a contract proposal can never be deemed to exist, except where the usage of trade or good faith and confidence, and in particular the special business position of the party to whom such proposal is made, or the settled business relations existing between the parties constitute as a rule a ground for presuming consent.

283.　In the case of bilateral contracts consent by one party to performance by the other is to be taken as an implied promise to perform on his part also.

284.　No contractual obligation can either expressly or impliedly arise without a lawful consideration.

285.　Where the obligation of a contract is made contingent on the uncertain happening or nonhappening of some future event, the contract is of itself dissolved, when, in the one case the event does not take place, or when, in the other case, it has taken place.

286.　A condition attached to a contract or any provision therein as to time can only be rendered inoperative by means of express waiver by the party in whose favor it was introduced.

287.　Where by means of a commercial contract two or more persons jointly acquire a right of claim or contract an obligation, and there is no express agreement to the contrary, the right of claim may be enforced by creditors and the obligation against the debtors jointly and severally and unconditionally.

288.　The rule laid down in the preceding Article applies also to obligations of suretyship, in particular with regard to two or more creditors as against one surety, as well as with regard to two or more sureties for the debt of one debtor, and also with regard to one surety for the debt of one of several debtors.

289.　The diligence due from one person to another in commercial matters is, unless otherwise provided or agreed upon, to be taken to mean such diligence as is usual at the place of performance on the part of a prudent and industrious trader.

290.　Responsibility for any act committed with wrongful intent or through gross negligence cannot be excluded by antecedent contract.

291.　The risk of accident can be accepted, and the exercise of utmost diligence undertaken, by express contract, in cases where they are not already provided for by this Code.

292.　A contract is concluded as soon as the proposal of one party is accepted without objection by the other, and such acceptance, unless given by implied consent, has been declared in due form to such first party.

293.　A proposal is to be deemed to be declined if no acceptance is declared forthwith, or within the time allowed to the party to whom the proposal is made.

294.　In cases where implied acceptance of a proposal may be presumed, such proposal is to be deemed to be accepted if it is not declined by the party to whom it was made, either forthwith, or within the time allowed for his so doing.

295.　In the case of parties at a distance the declaration of acceptance is deemed to have been made to the proposer forthwith, if it has been put into a course of ordinary transmission to the proposer by, at the latest, the middle of the week-day next following that of receipt of the proposal. When such day is a general holiday, such transmission may be made on the next succeeding day.

296.　A conditional or modified acceptance of a proposal may be regarded by the proposer at his option either as an absolute refusal, or as a fresh proposal on the part of the person to whom the proposal was made.

297.　Until such time as acceptance can, under ordinary circumstances, either forthwith or withen the time allowed be declared, the proposer is bound by his proposal to the other party ; he is entitled, however, before or at the time when such proposal reaches the other party to revoke the same by a communication to an effect contrary to that already made.

298.　The declared acceptance of a proposal count be revoked without the consent of the other party ; in the case, however, of parties at a distance, a revocation is valid, if it reaches the proposer prior to or together with the intimation of acceptance.

299.　In respect of mistakes and delays occasioned in the transmission of contract communications between parties, the party is liable in whose interest the transmission took place, in so far as the person undertaking the transmission is not responsible.

300.　Samples, price-lists and other objects in recommendation of a contract proposal, sent together with or separately from such proposal, belong as a rule to the party to whom the proposal is made, even where it is declined ; all other goods are to be properly preserved by him until further disposition thereof by the proposer ; he may, however, repay himself any disbursements or any commission due by the sale of the same at the expiration of a reasonable time in conformity with the provisions of Article 373.

301.　Commercial contracts are voidable on the ground of coercion, deceit, or mistake, but not on the ground of gross disadvantage, and, in particular, not on the ground of inadequacy of price or other consideration.

302.　Performance of a contract consists in the complete doing of that which one of the parties thereto has, with the consent of the other expressly or impliedly bound himself to do.

303.　In the absence of express contract or of usages of trade, the rules prevailing at the place of performance are to decide as to the substance and extent of the debtor's obligation, in particular as to the nature and quality of the object due.

304.　Where proper tender is made of complete payment of that which is due to the creditor, but acceptance is declined by him, the debtor is entitled to deal with the subject-matter of performance at the expense and risk of the creditor, and is responsible to him in respect only of wrongful intent and gross negligence.

305.　The creditor is not bound to accept partial or overdue performance, excepting in so far as payments on account are agreed upon or are usual.

306.　The performance of a contract is overdue where it does not take place before the expiration of the stipulated or otherwise determined due date.

307.　The due date may be fixed to be either at a named date or at the expiration of a certain period of time.

308.　Where such period of time is calculated by days, the last of such days is to be deemed to be the due date ; if, however, it is reckoned by weeks, months, or years, the day of the last of the same corresponding to the day on which the contract was concluded is to be deemed to be the due date.

309.　Where a period of time is calculated by days, the day on which the contract was concluded is not to be taken into account.

310.　Half a month is to be regarded as a period of fifteen days.

311.　Where the due date falls on a general holiday, the week-day next following is to be deemed to be the due date.

312.　Apart from special circumstances, one day is, for the purposes of performance, to be taken to be the duration of business hours usual at the place of performance.

313.　Where it is stipulated that performance is to take place during the course of a certain period of time, it may be effected or demanded on any business day within such period.

314.　Where in the case of the preceding Article any doubt exists, the party in whose interest such period was fixed is entitled to choose the day for performance ; in the case of goods the person entitled to receive, and in the case of money claim the debtor, is, as a rule, to be considered as such party.

315.　Where a period is extended, and no particulars are specified, the further period is to be calculated from the expiration of that originally fixed.

316.　Where no time is fixed for performance, either by the contract or otherwise, the creditor is entitled to fix a due date if the debtor fails to perform within a reasonable time.

317.　Where no other place of performance is specified, or is to be inferred from the nature of the transaction or the intention of the parties, performance is to take place at the place specified by the creditor or party entitled to receive, or failing such specification, at the place of residence and, in particular, at the seat of business of the creditor or party entitled to receive.

318.　The obligation of transmission incumbent on the debtor is fulfilled by delivery to the forwarding agency specified by the creditor, or to such as may, if none be specified, be suitably employed.

319.　Where both parties reside at one and the same place, local usage or the nature of the transaction is, in the absence of special contract, to decide whether it is incumbent on the debtor to forward the object due to the creditor, or on the latter to fetch away the same.

320.　Without prejudice to the debtor's liability for his own fault or that of persons employed by him, the forwarding of the object due, unless otherwise stipulated, takes place as a rule at the risk of the creditor.

321.　Measures and weights, distances, periods of time and holidays, standards of value and kinds of money in case of money payments, as well as other particulars relating to performance are determined according to the rules in force at the place of performance, unless otherwise determined by special contract or the usages of trade.

322.　In the case of alternative debts, or of debts the subject-matter of which is left undetermined, the selection of the subject-matter of performance, provided it is still in existence, is, in the event of doubt, to be left to the debtor.

323.　Where a debtor fails to discharge his debt in due course, the creditor has the option of either cancelling the contract, or claiming compensation or damages, as the case may be.

324.　Compensation consists, in the case of money debts, in the payment, besides the amount of the debt itself, of moratory interest from the due date until the date on which the debt is paid ; in the case of all other debts, in the payment of the highest money value that the object due reached after the due date, with the addition of moratory interest from the date of such assessment until the day of payment, unless the creditor prefers thereto the value of such object on the due date with moratory interest from such date.

325.　The creditor may claim compensation without being bound to prove any fault on the part of the debtor or loss incurred by himself by reason of non-fulfilment, but only where, from the nature and extent of the obligation, the debtor is responsible for such non-fulfilment.

326.　The money value of the object due, to be assessed in pursuance of Article 324, is the ordinary market value thereof, and in the case of things dealt in on Exchange their Exchange quotation, with the addition in each case of the expenses and disbursements incurred in consequence of the delay.

327.　Where a creditor fails as in Article 304 mentioned to duly accept, he likewise is bound to compensate the debtor for all expenses and disbursements incurred by him in consequence of such failure.

328.　Where a person wrongfully, by a fault committed intentionally or through neglect, causes detriment to another, he is bound to pay the latter full damages.

329.　Damages comprise indemnification for the actual loss sustained as well as for loss of profit.

330.　The profit consists in the gain which it can be shown would have resulted to the party damaged but for the fault of the other which caused the damage whether such gain was anticipated or usual, or not.

331.　In assessing damages no regard is to be had to merely possible, probable or future loss or profit, or loss or profit dependent on the supervening of other circumstances.

332.　Where the amount of compensation or damages has been previously agreed upon between the parties, the contract, as a rule, applies, and no indemnification higher or lower than that agreed upon can be obtained by means of an appeal to actual facts.

333.　Every person who has to make compensation for expenses, disbursements, advances and other similar expenditure, or who has to pay damages, is on the demand of the entitled party, to pay interest in proportion to their amount from the day on which they became due.

334.　The rate of moratory interest as well as that of other interest, in so far as it is not fixed by law or by contract, is seven per cent per annum.

335.　Where a money debt is paid before due date the debtor may claim a discount for the time still to run, if such discount was stipulated for or is in accordance with the usages of trade.

336.　Where a contract is cancelled by the creditor on the ground of non-performance, the debtor is to take back anything given in part performance in its actual condition, and is to restore to the creditor, in full, any thing that may have been received in counter performance or the value thereof.

337.　The creditor, in order to secure performance of a contract, may impose on the debtor as a penalty in the event of non-performance, the payment of a sum of money ; the enforcement of such a penal stipulation is independent of the requisites for damages.

338.　A penalty does not deprive the creditor of his right to performance or indemnification ; in the case of doubt, howeevr, a penalty and damages cannot be claimed together

339.　Where the damage sustained by the creditor in consequence of culpable non-performance is greater than the amount of the penalty such additional amount may be claimed over and above the penalty as damages.

340.　The contract of a penalty for the purpose of concealing a transaction for the payment of differences, or any illegal gaining or wagering transaction is void.

341.　Instructions to conclude a commercial transaction are in every case to be regarded as an agency for the purpose, excepting in as far as the principal expressly reserves the right of ratifying the agent's act.

342.　Commercial transactions concluded by an agent for his principal, whether in the name of the latter or not, directly entitle or bind the principal in regard to third persons.

343.　Whoever concludes a transaction with another person on behalf of a third person, without the latter's instruction or subsequent ratification, is personally responsible to such person in respect of such transaction.

344.　Where a person in concluding a transaction as agent exceeds his authority, he is responsible to his principal for so doing, if the third person had not, or could not have had knowledge thereof.

345.　Where the party with whom an agent has concluded a commercial transaction on behalf of another was ignorant of the fact of agency and of the person of the principal, and such ignorance was due to no fault of his own, he is entitled to claim indemnification from the agent for the damage he may have sustained by reason of non-performance by the principal.

346.　Agency is not determined by the death of the principal or of the agent.

347.　No agency can be transferred to a third person without the principal's consent, or the circumstances from which the principal's consent may be inferred to be obtained.

348.　Any person concluding a commercial transaction on behalf of another, with the latter's instructions or subsequent ratification, is entitled, even in the absence of an express agreement, on production of an account to be indemnified for the advances, disbursements, and other expenses, properly made or incurred by him in such transaction, and to demand the usual interest, commission, or fees.

349.　Rights of claim in commercial matters are prescribed at the expiration of six years from their due date, or, where no such date is fixed, from the time of their accruing, excepting where some shorter period for prescription is by law provided.

350.　Prescription is interrupted by a summons for performance expressly addressed to the debtor, by any judicial or extra-judicial act done by the creditor for the purpose of enforcing or guaranteeing his right of claim against the debtor, by a written promise to pay, or by part payment by the debtor in respect of the principal claim or any accessory claim.

351.　The mere forwarding of a receipted or non-receipted account is not to be deemed summons.

352.　Expiration of the period for prescription operates to completely extinguish the principal claim as well as every accessory claim, and to prevent the creditor from further, either directly or indirectly, enforcing the same.

353.　Persons between whom such settled business relations exist that mutual rights of claim and debts continually arise therefrom may discharge the same by means of a periodical mutual balancing of the account

354.　Account current relatians can be created by contract, express or implied, but not by the mere giving of credit even when continued for a length of time.

355.　The account is to be balanced at intervals of one year, unless a shorter period is fixed by contract.

356.　At the end of every period each party is bound to close the account and to send, within the stipulated or a reasonable time, the statement thereof to the other party for confirmation, or for raising any objection he may have thereto.

357.　If no objections are raised, or if, notwithstanding any objection being raised, account current relations are continued without reservation, the account is to be regarded as tacitly confirmed.

358.　Individual rights of claim belonging to an account current cannot be enforced separately, unless the account current relation is determined, or the account is disputed.

359.　Where an account has been confirmed, the balance due to one or other of the parties can be claimed by virtue of such account alone.

360.　In the absence of any contract to the contrary, the balance shown due at the end of each period may be carried over as a fresh item into the next account.

361.　In the absence of contract or usage to the contrary, all mutual rights of claim and debts arising out of commercial matters may be brought into account current.

362.　Where account current relations are constituted between persons standing to each other in such settled business relations that rights of claim arise in favour of one of the parties alone, and the other party from time to time makes payment on account of such rights of claim, the rights of claim belonging to such account current are only enforceable periodically and upon the account current taken as a whole.

363.　On rights of claim entered in account current suitable interest, even in the absence of any contract, is due from the time of their entry.

364.　With respect to the balance shown due for any period, the last day of such period is to be deemed to be the due date.

365.　Account current relations, with respect to the rights of claim and debts entered in account current, are inoperative as against third persons.

366.　Apart from the right of either party to withdraw at any time, account current relations are dissolved by the death or bankruptcy of either of the parties thereto.

367.　A pledge of movables for guaranteeing a right of claim arising out of a commercial transaction is in every case to be created by a contract in writing ; such contract is invalid unless the date and amount of the right of claim to be guaranteed, and the lawful consideration therefor as well as the date of the pledge and the objects pledged are expressly specified therein.

368.　The creation of a pledge entitles the creditor to satisfy his right of claim by the sale of the objects pledged, provided that possession of the same has been transferred to him or his representative.

369.　The indorsement and delivery of bills of lading, warehouse certificates and other documents, the indorsement of which transfers to the indorsee the right of disposal over the goods to which they refer, is equivalent to the transfer of the possession of the thing itself.

370.　Where documents to order form the object of a pledge, they are to be endorsed to the creditor and delivered to him. Such indorsement is to contain mention of the pledge.

371.　Where a debtor is in arrear with the payment of his debt, the creditor may proceed to the sale of the object pledged after he has, by producing the contract of pledge, obtained an order of the Court, without it being necessary for him to institute an action against the debtor.

372.　The sale of the object pledged can, however, take place without previous order of the Court, where the debtor in the contract in writing expressly declared his consent thereto, as well as in all cases of pledge of documents to order.

373.　In the cases in the two preceding Articles mentioned, sale is to take place in public auction through a broker or auctioneer or, in the case of goods dealt in on Exchange, by means of public offer on an Exchange. Notice of the intended sale is to be given to the debtor eight days at least before the day appointed for sale.

374.　Until the expiration of the term specified in the preceding Article the debtor is entitled to make payment to the creditor and to claim the return of the object pledged.

375.　The surplus remaining, after deducting the amount of the claim together with interest and necessary expenses and disbursements from the price realized, is to be paid over to the debtor less all the costs of sale.

376.　The creation of a pledge' does not operate to preclude the debtor from alienating the object pledged ; he is, nevertheless, out of the price realized bound to pay the pledge creditor the full amount of his claim, failing which he is liable to be punished with major imprisonment not exceeding two years.

377.　A purchaser, having knowledge of the pledge right of a third person over an object he has purchesed, is to pay the price up to the full amount of his pledge claim to the pledge creditor direct ; if he fails to comply herewith he also is liable to the punishment in the preceding Article mentioned.

378.　Where two or more persons have obtained a pledge right over one and the same thing, the privilege of sale is vested in the one who is in possession of the thing, where such possession was not obtained by coercion, or secretly, or on condition of the thing being returnable on demand.

379.　Where, in the case of two or more pledge creditors, one is in possession of the thing itself and another of the documents vesting the right of disposal thereof, the party who first acquired such respective possession is entitled to the privilege of sale.

380.　Provided that the pledge creditor acts in good faith, a valid pledge of movables may be created by the owner or by his substitute to whom he has entrusted the same for the purpose of disposal thereof or by any person who has rightfully acquired the possession of the things, provided the same, documents to bearer excepted, have not been stolen or lost.

381.　An object pledged by a person to whom it does not belong can be redeemed by the owner prior to the completion of the sale thereof, on satisfaction of the claim of the pledge creditor in full.

382.　The sale of an object validly pledged operates, after payment of the price, to extinguish every antecedent right thereto of ownership or pledge.

383.　A pledge may be created on behalf of a debtor by a third person.

384.　No pledge can be created in respect of a future debt.

385.　Judicial stay of the sale of an object pledged can be obtained by a plea of payment to the creditor, if the same can, primâ facie, be made to appear probable.

386.　Rights of claim based on a document to order or to bearer can be pledged without it being necessary to inform the debtor thereof.

387.　Where in consequence of a commercial transaction a person has come into possession of property belonging to another, and has a right of claim that is due for work, expenses, advances, disbursements, or fees, or interest thereon, in respect of such property, he is entitled to retain the thing itself or its proceeds, until he has received the payment in full or guaranty for his right of claim.

388.　For rights of claim due on a balance of an account current and, where the debtor has suspended payment, for all rights of claim, though not yet due, arising out of commercial transactions a creditor is entitled to exercise the right of retaining all property of the debtor of which he has rightfully obtained possession.

389.　A lien is lost by loss of possession, except where the entitled party disposed of the thing for his own benefit and gave notice of his right to the new possessor.

390.　A lien is lost when the right of claim in respect of which it was acquired becomes extinguished by prescription or otherwise ; but not where the ownership in the thing itself passes to another either with or without the will of the debtor.

391.　A lien cannot be assigned to a third person by the creditor.

392.　Where a person has notified the debtor of the exercise of a right of lien to which he is entitled, and fails within reasonable time to receive payment or guaranty, he is at liberty to sell the thing retained in conformity with the provisions in Articles 371 and 373 contained and to pay himself out of the proceeds.

393.　Where a person is entitled to claim performance of a bilateral contract, he may retain what he himself has to render until the other party has on his part performed what is owing from him, unless it is otherwise agreed or the same is contrary to the usages of trade.

394.　The right under a contract in writing to claim delivery of a fixed sum of money or of specified goods, where the contract either expressly or according to the usages of trade runs to order, is transferable by indorsement to a third person.

395.　The maker or indorser of a document to order can render the same non-indorsable by a note on the document to such effect.

396.　Documents to order and every indorsement thereon are to be dated and are to bear the signature and seal of the maker and of each indorser.

397.　The lawful consideration of the contract in respect of which the document was made or indorsed need not be stated thereon, without prejudice, however, to the provision of Article 370.

398.　A document to order may be indorsed in blank.

399.　The maker of a document to order is, even without previous acceptance, bound to pay or to deliver to the indorsee the sum of money or the goods specified therein, but only upon presentation and delivery of the receipted document, and discharge of any counter-claims in respect of which he is, under Article 387 entitled to exercise a lien.

400.　The maker of a document to order is entitled, but not bound, to take means to identify the person presenting the same ; he is, nevertheless, responsible, in the event of malicious intent or gross negligence, to any person injured thereby.

401.　The maker of a document to order can only decline to fulfil his obligation on the ground of such pleas as anything contained in the two preceding Articles entitles him to raise, or as can be based on the document itself.

402.　The question as to what rights belong to an indorsee in respect of the objects transferred to him by reason of the indorsement depends on the contents of the contract concluded between himself and the indorser.

403.　Documents to order stolen, lost, or otherwise missing, whether indorsed or not, can be declared void in conformity with the provisions of the Code of Civil Procedure at the instance of the person entitled.

404.　Tickets, cards, and other certificates of obligation to bearer are transferable by mere delivery. The right of claim to which the bearer thereunder becomes entitled as against the person issuing any such certificate is to be decided according to the provisions specified on the certificate itself or according to laws or ordinances or usage.

405.　In so far as not specially provided for in the following Articles, the rights and obligations of public agents, brokers, commission agents, and forwarding agents are to be determined according to the principles laid down in Chapter VII, Section VI.

406.　Public agents are traders who make a business of acting for other persons in commercial matters.

407.　A public agent may trade on his own account or exercise another calling, and may act as agent for more than one person ; he is not, however, as a rule, at liberty to act for both parties in one and the same transaction.

408.　The contract of employment of a public agent may be either express or implied and may be either for single transactions or for one kind or several kinds of transactions, and either for a fixed or for an indefinite period of time ; it may be cancelled at any time by either party, without prejudice, however, to rights resulting from the contract, or to the obligations to indemnify for any damage resulting by reason of wrongful cancellation.

409.　It is the duty of every public agent, even without express request, to protect the interests of his principal in every particular of the transactions with which he is charged ; he is not, however, bound to continue his services unless he has first received payment of what is already due to him.

410.　The extent of a public agent's cepacity to represent his principal is dependent on the instructions given him by such principal, or on subsequent ratification ; such ratification is, in the case of permanent agents, to be regarded as equivalent to continuing instructions unless the contrary appears from the circumstances, or from some express statement of the principal.

411.　As a rule a public agent is only entitled to conclude contracts by virtue of express instructions.

412.　A public agent who is instructed merely to conclude transactions is not thereby empowered to receive payments or returned goods, or to admit reclamations.

413.　A public agent is not empowered to conclude compromises or to carry on legal proceedings, unless special instructions are conferred on him for the purpose.

414.　A public agent instructed to deliver goods or to otherwise perform a contract is to be deemed to be empowered to receive payment in respect thereof, unless the contrary is expresely stated by the principal.

415.　In transactions conducted or concluded by a public agent, he is not responsible to his principal for payment by third persons, unless he is himself in fault or has specially undertaken such liability. In the latter case Article 288 applies.

416.　In respect of the acts of a permanent public agent, the principal is in every case to be held responsible to third persons, provided they acted in good faith, where such agent, on being questioned, expressly asserted he was thereunto empowered, or where the acts come within the usual scope of his instructions.

417.　Fees or any remuneration or indemnification received by a public agent from third persons in respect of acts undertaken by him are to be placed by him to the account of the principal, failing which the latter may declare such acts as not binding on him.

418.　A public agent has, as against his principal, a right of lien in accordance with Articles 387 and 388 in respect of any amount due to him for commission, advances, disbursements, expenses or interest. He is only entitled to charge his principal with such disbursements and expenses as have actually been caused him, and as in each individual case appear justified by the usages of trade or by the actual needs oi' interests of the principal.

419.　Brokers are traders who by virtue of official sanction carry on, as a business, the intermediate negotiation of commercial transactions between other persons. In places where no Exchange exists the brokers have the exclusive right to fix and publish the quotations for goods and documentary securities as well as the rates of money and of exchange. Brokers, when acting as such, have public credibility for their acts.

420.　Brokers can be appointed for particular branches of commercial transactions.

421.　No person can be appointed broker unless he has completed his twenty-fifth year and has for a period of five years at least been occupied in the branch of trade in question, and unless he enjoys an irreproachable reputation. Persons who have become bankrupt can only be appointed after rehabilitation.

422.　Every broker is required to give security in money before entering on his employment ; the amount of such security is to be fixed by ministerial decree for each place and each branch of trade and for the case of two or more branches of broking being carried on by one broker ; it may, however, in no case exceed twenty thousand yen.

423.　The number of brokers admissible at any place, and for each branch of trade at any place, may be limited according to requirements.

424.　A broker may dispose of his business to, or may be otherwise succeeded therein by a qualified person ; his successor, however, is not entitled to carry on the same until he has obtained the official sanction and given the required security.

425.　Where in any one place there are at least ten brokers in all or in any particular branch of trade, they can, after having obtained the sanction of the Government thereto, form themselves into a guild, and they are to elect from their number, for the space of one year at least three directors. Every broker of the place is both entitled and bound to enter such guild.

426.　Brokers or a brokers' guild are forbidden, under penalty in the case of brokers of the loss of their business privileges, and in the case of a brokers' guild, of dissolution and loss of the business privileges of its members to carry on the business of brokers on joint account ; a brokers ' guild may, however, undertake a joint security for any member in accordance with the provisions of the guild's byelaws.

427.　Every brokers' guild is by vote of the majority, to establish bye-laws for the exercise of its business, for which the consent of the Chamber of Commerce and of the Exchange at the place in question, or of the one or the other only, where only one exists, and the sanction of the Government are necessary. Every member of the guild is bound to observe such bye-laws.

428.　The directors of a brokers' guild are entitled and bound :--

429.　A broker is entitled in transactions negotiated by him to represent both parties.

430.　A broker is not permitted to transact any business on his own or another's account, or in his own or another's name, if he directly or indirectly has any interest therein.

431.　Brokers are to make all necessary statements accurately, completely, and truthfully, to the persons to whom they act as intermediaries and they are responsible therefor: in addition to this they are, in particular, in so far as concerns a transaction negotiated by them, responsible for the identity and capacity of such persons and for the genuineness of their signatures and seals. They may not negotiate transactions either for or with persons who are personally unknown to them, unless the identity of such persons is guaranteed them by some local trader of good standing.

432.　Brokers are bound to preserve secrecy when required so to do by their principals.

433.　In transactions negotiated by brokers in respect of goods, they are personally to convince themselves of the existence and quality of the goods and of the solvency of the purchaser, and to preserve, properly marked, the patterns and samples delivered to them, until the transaction is completely finished.

434.　In transactions respecting bills of exchange, promissory notes and other documentary securities, brokers are, on accepting instructions, to require from the vendor delivery thereof to themselves, and from the purchaser payment in advance of at least twenty per cent of the price.

435.　Brokers are not empowered to conclude transactions otherwise than by virtue of the express statements of the parties thereto. In the case of undisclosed principals the authority to conclude a transaction is to be deemed at the same time to carry with it authority to receive performance or counter performance as the case may be.

436.　Brokers are not permitted to negotiate illegal, prohibited, or fictitious transactions.

437.　Brokers are to exercise their functions as such personally ; in particular they may not make use of an assistant or agent in concluding transactions.

438.　Brokers are liable to their principals in damages for the violation of duties incumbent on them, and for every other fault.

439.　Claims arising out of any transaction concluded by a broker for an undisclosed principal lie directly and exclusively against the broker.

440.　Every broker is bound to enter, day by day, in a special day-book, the essential substance of the transactions concluded by him, and to personally close and sign and seal each day's entries ; he is also, and at the latest in the course of the next following day, to furnish each party to every transaction with a copy of the entries relating thereto signed and sealed by himself ; such copies may run to order.

441.　The day-books of deceased or retired brokers are to be deposited with the directors of the brokers' guild, or, where none such exists, with the Court.

442.　Brokerage cannot be charged until the transaction has been completed except where it is otherwise fixed by any rule or is otherwise customary.

443.　The acceptance from one party of any remuneration or benefit over and above the legal brokerage entitles the other party to declare the transaction void.

444.　An Exchange is a public institution where commercial transactions are effected in accordance with the provisions of the Exchange bye-laws.

445.　Where sufficient trade exists, the traders of a place or of a district thereof may, with the sanction of the Government, establish an Exchange for commercial transactions in general or for particular branches of trade.

446.　Every Exchange is to have a fixed place of Exchange, bye-laws and directors. All these, and every alteration of the same, are subject to the sanction of the Government.

447.　In so far as no special laws or ordinances exist, the concerns and regulations of an Exchange are settled by the bye-laws of the Exchange, or where the same are not provided for therein by the directors in conformity therewith.

448.　Where decisions of the directors are objected to as being unjust or prejudicial, the Department of State for Agriculture and Commerce, after hearing both sides, is to give its decision, accompanied by the grounds therefor.

449.　The Government may determine that, excepting in retail trade, certain goods may in any one or more places be dealt in only on Exchange.

450.　An Exchange may establish a depot for the goods that may be dealt in thereon and may issue warehouse certificates to order. The directors and Exchange brokers are, however, prohibited from making advances on such certificates or acquiring them by purchase.

451.　Exchange brokers, after they have obtained the special sanction of the Government and have given the required security in money, are admitted by the directors and bound over upon oath to observe the Exchange bye-laws and other Exchange regulations.

452.　Where a brokers' guild exists, one director at least of such guild is to be elected to the director of the Exchange.

453.　To every Exchange there is to be appointed a number of brokers corresponding to the extent of business thereon.

454.　The provisions of this Code with regard to brokers are binding also on Exchange brokers.

455.　Brokers, Exchange brokers and Exchanges are under the supervision of the Departments of Finance, and of Agriculture and Commerce.

456.　A commission agent is a trader who does business under contract in his own name on account of others.

457.　The validity of transactions concluded by a commission agent with third persons is, with regard to such persons, not dependent on the instructions or ratification of his principal.

458.　A commission agent is bound to observe the instructions given him by his principal and is responsible to him for damage caused by exceeding the same or by any other fault.

459.　A commission agent is exempt from responsibility for exceeding his instructions, if he can show that such act on his part was unavoidable under the circumstances of the case and preserved his principal from further damage, unless his principal expressly or impliedly directed absolute fulfilment of what he has instructed.

460.　A commission agent is not permitted to free himself from responsibility for exceeding his instructions by taking upon himself to defray the difference in price or in other items of account thereby caused to the detriment of his principal.

461.　A commission agent may not retain for himself any difference in price or in other items of account arising in favour of his principal by reason of any deviation from his instructions.

462.　The provisions of Article 409 are to be applied also to commission agents. In particular, a commission agent is at all times and without delay, before as well as after the execution of a transaction, to render to his principal all necessary information, and is fully to protect the interests of the owner in regard to transport, storage, insurance, purchase, sale and all other commercial operations.

463.　A commission agent is bound to accept all instructions falling within the scope of his business, if he receives the requisite advances in proper time and has cover or guaranty for his claims arising out of the transaction.

464.　Where a commission agent refuses to accept instructions, he is forthwith to notify such refusal to the person who gave them, failing which he is responsible for executing such instructions ; he must also make provision for the proper preservation of the goods entrusted to him.

465.　In the absence of special agreement a commission agent is not bound to make advances to his principal or to third persons on his principal's account ; he is, however, entitled with the consent of his principal, or even without it in such cases as is customary according to the usages of trade, to make advances or to give credit to third persons on his principal's account.

466.　A commission agent is responsible to his principal for the solvency of third persons in accordance with the provisions of Article 415, but only so far as such third persons are themselves liable.

467.　A principal may at any time revoke or vary the instructions given to a commission agent, so far as they are not yet executed.

468.　A commission agency is terminated by the bankruptcy of one of the parties ; in the event of death or other incapacity to execute the instructions, it is not terminated, unless one of the parties declares that he terminates it on the ground of such fact.

469.　A commission agent is entitled, in addition to business he does as such, to transact business of a similar or different nature on his own account.

470.　Unless the principal has expressly declared the contrary, a commission agent may execute the instructions on his own account as purchaser, vendor or otherwise as the case may be ; in such event, however, his rights and obligations with regard to his principal are in no way affected.

471.　In the cases in the preceding Article mentioned the instructions are to be deemed executed as soon as the commission agent has dispatched notice to his principal of his acceptance on his own account.

472.　As soon as instructions have been executed, the commission agent is to notify his principal of the fact and is to pay to him or place to his account the proceeds of the transaction after deducting the amount due to himself.

473.　Where the instructions to a commission agent do not run otherwise, goods purchased or in other manner received on account of the principal are to be placed by him at the disposal of such principal, and are to be properly preserved by him until they are, disposed of. He is only bound to provide for the transmission of the goods by virtue of express instructions ; without prejudice, however, to his right of lien.

474.　Transactions concluded by a commission agent which the principal is not bound to recognize remain, notwithstanding they are not recognized, but without prejudice to the provision in Article 381 contained, valid on the commission agent's account, and the latter is bound to indemnify the principal for all damage sustained.

475.　Rights of claim and obligations arising out of commission agency transactions are, as a rule, direct rights of claim and obligations of the commission agent ; the former are, however, on assignment thereof to the principal, or in the case of the insolvency of the agent, directly enforceable against third persons by the principal.

476.　A commission agent is entitled to claim from his principal, in addition to repayment of any advances made to him :--

477.　Where instructions to a commission agent have remained unexecuted without fault attributable to him, commission can only be claimed where locally customary and, at the most, up to one half of the ordinary commission.

478.　A commission agent is entitled to place his own trade mark or firm name on goods dealt in by him on commission.

479.　Unless the contrary is expressly agreed upon, a commission agent who has to execute instructions after a particular pattern or model may only cause them to be executed by the rightful owner or author of such pattern or model, failing which his principal is entitled to cancel the contract without regard as to whether the goods do or do not correspond to the pattern or model.

480.　The principles governing business on commission are to be applied to the publication on commission of books and other scientific or artistic works mechanically reproduced

481.　A forwarding agent is a trader whose business consists in the transmission according to contract of goods and other articles in his own name on account of others.

482.　The responsibility of a forwarding agent is the same as that of a commission agent, as well as that of a carrier, whether a fixed charge for carriage has been stipulated or not, and irrespective of whether the transmission he undertook is performed by means of transport belonging to himself, or hired, or under the control of others.

483.　Where not otherwise stipulated, and in all cases of through transport, a forwarding agent is responsible, as carrier, for all intermediary forwarding agents, and for all public agents, carriers, and other persons by means of whose successive services the transmission he undertook is carried out.

484.　The forwarding agent is to make out a way-bill which must state :--

485.　A way-bill runs to order, unless the contrary is expressly mentioned. It may be made out to bearer.

486.　The consignor may demand delivery of one or more duplicates of the way-bill.

487.　Every forwarding agent is to enter day by day in a special book all forwarding contracts concluded by him, and is daily to close and sign and seal the same. Every way-bill must conform with the corresponding entries in the book.

488.　Any thing in the way-bill mentioned which conflicts with the forwarding contract entered into or with existing laws and ordinances is without effect.

489.　The forwarding agent may claim :--

490.　The rights of claim of the forwarding agent cannot, unless otherwise stipulated, be enforced either by him or those subsequent to him in the transmission, or by any person who has entirely or partially performed the transport stipulated for, until delivery of the goods at their destination.

491.　For claims or pleas founded on the responsibility imposed on the forwarding agent, he himself, as well as the other persons in the preceding Article mentioned are liable jointly and severally and unconditionally.

492.　The provisions in this Section contained apply also to persons who undertake, as a business the conveyance of passengers, the transmission of newspapers, telegrams, printed matter and other things, the insertion by way of agency of advertisements, as well as other services of transmission, but not to freight brokers, public agents, reference or intelligence bureaus and similar institutions.

493.　An inland carrier is a person who undertakes, as a business, the transport of goods and other objects by land or inland navigation.

494.　The delivery of goods is to be deemed delayed, when not made within the time agreed upon, or, in the absence of any express agreement as to time, within the time usually required for effecting the transport. Such time is in every case to be calculated from the date of the way-bill, or failing mention of such, from the date of acceptance of the goods for transport.

495.　The amount of indemnity recoverable for delayed delivery of goods, where no other sum is agreed upon, or where it does not appear disproportionate to the amount of damage, is equal to one third of the cost of carriage.

496.　Where goods in the condition in which they are have become unsaleable or useless, or have lost at least three-fourths of their value, by reason of delay, partial loss or damage, compensation amounting to their full value may be claimed on their abandonment to the carrier.

497.　In the case of loss of or damage to a portion or to pieces of a consignment, the amount of compensation is to be the amount by which the total consignment is thereby diminished in value, if the undamaged portion or pieces cannot be used or sold in their then condition. The provision of the preceding Article applies, however, where the value of the undamaged portion or pieces does not exceed one fourth of the value of the total consignment.

498.　The amount of indemnity is to be calculated in conformity with the provisions of Article 324, taking in the case of commercial goods their commercial value, and in the case of other goods their ordinary value, at the place of delivery, unless a greater value is stated in the way-bill.

499.　Disputes arising between the parties as to value or the extent of damage are to be decided by the opinion of experts, who are to be appointed by the parties themselves, or, where they cannot agree, by the Court on their application.

500.　In respect of gold or silver in specie, precious metals, precious stones, objects in gold or silver, documentary securities, documents, and other valuables, indemnification according to their actual value can only be claimed where at the time of entrusting the same for transport a declaration was made of their nature and value, and they were thereupon subjected to an increased charge for carriage in accordance with a properly published special tariff.

501.　In the case of other goods the carrier may stipulate, by means of a fixed tariff properly published beforehand, that compensation as in Article. 498 provided will only be made up to a certain amount per package or weight.

502.　The amount of the indemnity in the preceding Articles determined can only be increased or diminished by means of an express contract based on good and sufficient grounds.

503.　Gross negligence or malicious intent renders the carrier in all cases liable for full damages in conformity with the provisions of Articles 328 and 329.

504.　A carrier is responsible for persons in his service and other persons employed by him in effecting the transport he has undertaken.

505.　Where the transport undertaken by a carrier is effected by other carriers subsequent to him, they may be held jointly and severally liable for the full amount.

506.　Every carrier is to be deemed with regard to the goods entrusted to him for transport the public agent of the sender or of the person entitled to receive, and is responsible to him for omission of the diligence necessary for the preservation and proper conveyance of such goods.

507.　The provisions of Articles 483-491 apply correspondingly also to carriers.

508.　Prior to and during transport the sender or the person entitled to receive as the case may be may stop or alter the carrying out of the stipulated transport ; without prejudice, however, to the right of recourse belonging to the carrier.

509.　Both parties to the contract are entitled to the same right as that in the preceding Article mentioned in cases where the commencement or continuance of the stipulated transport is hindered, or rendered impossible or dangerous by irresistible force or accident ; in such case, however, the carrier is only entitled to payment of the cost of carriage in proportion to the transport already effected, and to be indemnified for any expenses and disbursements he may have incurred.

510.　Where the failure to perform the stipulated transport or where any interruption therein is due to the fault of the carrier, or is occasioned by him. and he omits to supply another fit and proper carrier, the sender or the person entitled to receive, as the case may be, has the option of cancelling the contract or of claiming indemnification.

511.　Prior to or during the carrying out of the stipulated transport the sender is entitled to make any disposition with regard to the goods other than that mentioned in the way-bill, so long as the carrier has not delivered the goods or the way-bill to the person originally designated as entitled to receive.

512.　A carrier is not entitled, without lawful cause, to decline to accept the instructions for transport given to him or to make his acceptance thereof dependent on onerous conditions, excepting where the transport he is required to effect is accompanied with special risk or does not fall within the usual scope of his business ; in particular, he may not, save under exceptional circumstances, allege insufficient means of transport or insufficient transport arrangements.

513.　On arrival of the carrier at the place of destination the right of claim arising on the contract of carriage is enforceable against the carrier, according to the contents of the way-bill, by the person entitled to receive named therein or otherwise indicated, either in his own name or in that of some third person.

514.　Where the person named in the way-bill or otherwise indicated as the person entitled to receive refuses either to accept the goods or to fulfil the conditions imposed by the sender, or where he fails to satisfy the cost of carriage and other lawful rights of claim of the carrier, or where he is not to be discovered, the carrier may deposit the goods in a public warehouse or, by virtue of an order of the Court, in the hands of a third person, and may sell them in conformity with the provisions of Article 392 to the extent of the full amount of his right of claim.

515.　By acceptance of the goods and payment of the carrier without reservation by the person entitled to receive, every claim against the carrier becomes extinguished.

516.　All rights of action and all pleas against a carrier in respect of loss, damage, or delay, are prescribed after the expiration of one year from the day on which delivery of the goods took place, or, in the event of total loss, should have taken place.

517.　Every person conveying passengers by land or inland navigation in return for the habitual payment of a fare is liable to indemnify such passengers for personal injury caused them by reason of failure on his part to exercise the utmost diligence in carrying them. In case of dispute it is for the carrier to prove that he has been free from blame.

518.　The indemnification consists in the reimbursement of medical expenses and of the extra cost of maintenance caused to the injured party, and in exemplary damages, which are to be fixed according to the gravity and duration of the consequences of the accident, as well as according to the earning powers of the party injured thereby.

519.　Where death or permanent injury, infirmity, or incapacity of earning has resulted from the accident, the amount of exemplary damages is to be fixed after taking also into consideration the requirements of maintenance of the family of the deceased or sufferer.

520.　The responsibility of a carrier of passengers for passengers' luggage is the same as that of an inland carrier, if such luggage has been delivered to him and, where when necessary, the nature and value thereof have been declared, irrespective of whether the passenger accompanies it, or whether a separate charge is payable therefor or not.

521.　A carrier of passengers is only responsible for hand baggage in so far as he is chargeable with fault and in so far as it is necessary to satisfy the actual and reasonable requirements of the journey.

522.　Passengers' luggage, in the absence of other instructions, is to be handed over to passengers at the termination of the journey, or if this cannot be done to be kept in safe custody for the space of three days ; after the expiration of this period the responsibility of the carrier is to be measured in conformity with the provisions of Article 304.

523.　In other respects the provisions of the preceding Section apply also to the carriage of passengers and luggage. No lien can be exercised upon the wearing apparel of passengers.

524.　The responsibility for passengers and luggage exists without regard to whether the fare or the charge for luggage was prepaid or not, and even where, in particular cases, no such fare or charge was payable.

525.　The subject-matter of a contract of sale can only be a thing which is already in existence at the time of conclusion of the contract and over which the vendor possesses the right of disposal.

526.　A thing belonging to another can be sold by a person who has obtained possession thereof in a lawful manner, provided that the purchaser acts in good faith at the time of the transfer of the right of ownership. Such thing, however, unless it be a document to bearer, must not have been either lost nor stolen.

527.　A contract for the sale of a thing, which is already in existence at the time of conclusion of such contract, but delivery of which is by natural causes not then possible, is, in the absence of any other intention of the parties, a contract upon the condition that the thing becomes capable of being delivered.

528.　A contract for the sale of a thing, which at the time of such contract no longer exists, is valid, if neither of the parties had knowledge of the fact and the contract was concluded with due regard to the uncertainty of the thing being in existence.

529.　A contract of sale, in which the vendor stipulates for the right of repurchase, is invalid if it was concluded for the purposes of a transaction relating to differences, or for the purposes of an illegal usurious or other unlawful transaction.

530.　All contracts of sale are invalid which are from the outset concluded without the intention of performance, or which are concluded for the sale of things of which acquisition or alienation is prohibited.

531.　Conclusion of the contract of sale or, where it is a conditional contract, fulfilment of the condition, or, where the thing has first to be measured or set apart, the measurement, separation, or indication thereof, passes the ownership of the thing to the purchaser, and the risk of loss thereof or damage thereto has to be borne by him.

532.　A sale on inspection or trial is deemed to be concluded subject to the condition that the purchaser approves the thing.

533.　A sale according to trade mark, pattern, model or sample, is an unconditional contract, by which the vendor engages that thing conforms to such trade mark, pattern, model or sample, and, unless otherwise stipulated, that it emanates from the owner or author of the trade mark, pattern, model or sample.

534.　Where a thing is bought unconditionally after inspection, the vendor, excepting in the case of his own deceit or of material mistake on the part of the purchaser, is only liable for deficiencies or defects in respect of which he gave a warranty, or which he knowingly failed to disclose to the purchaser.

535.　The forwarding to any particular person with the goods and prices specially indicated, of patterns, models, samples, catalogues, and other business notices is to be deemed a binding offer of sale, unless the sender has reserved to himself the right to vary his proposals.

536.　Immediately on conclusion of the contract, the vendor is entitled and bound to deliver the thing and to receive the price, and the purchaser to accept the thing and to pay the price, unless a certain interval of time is allowed by contract or the usages of trade for the fulfilment of the said obligations.

537.　In the absence of any rule, provision of the contract or usage of trade to the contrary, the delivery of the thing takes place at the expense of the vendor, and acceptance, examination and the payment of the price, at the expense of the purchaser.

538.　Until delivery, the vendor, excepting where the purchaser is in arrear in taking delivery, is liable to him for the loss of the thing or for damage thereto, if such loss or damage was brought about by his failure to exercise the utmost diligence.

539.　Where delivery of the thing to the purchaser takes place before conclusion of the contract, the same liability as in the preceding Article mentioned is imposed on the purchaser towards the vendor.

540.　Where at the time of conclusion of the contract the thing is in the hands of a third person, such person is bound to deliver it to the purchaser, in the same manner as he would have to deliver it to the vendor.

541.　Where the price is not expressly fixed, the market price or in the case of things dealt in on Exchange the Exchange quotation current at the time and place of performance is in the absence of any other intention of the parties, the price payable.

542.　By reason of deficiency or defect in the thing, or delay in delivery the purchaser is entitled, at the expense of the vendor, to protest through a broker and to communicate the protest to the vendor.

543.　In the absence of any other contract, the vendor is bound to supply the goods in the quality current at the time and place of performance.

544.　The purchaser is bound immediately on receipt of the goods to examine their quantity and quality, and to notify the vendor of any deficiencies or defects.

545.　Where a vendor makes part performance only, the purchaser can cancel the entire contract, unless it was the intention of the parties that part performance should be admissible. In the latter case a price proportionate to the actual performance is to be paid.

546.　The weight of the packing is to be counted in the weight of the goods only where there is an ex press contract to that effect, or where it is so prescribed by the usages of trade.

547.　On receipt of a notice or protest from the purchaser with regard to deficiencies or defects in the thing, the vendor is on his part entitled to have an examination made of its actual condition or quality by a broker or other expert.

548.　If the parties or their experts are unable to agree, the actual condition or quality of the thing is to be determined by an expert to be appointed by the Court.

549.　Where a purchaser declines acceptance of a thing, he must forthwith place it at the disposal of the vendor and, until such disposal is or ought to have been effected, he is bound to provide for the keeping of the thing.

550.　The purchaser may sell the rejected thing on account of the vendor where he has already paid the price therefor or where such thing is of a nature to spoil or lose in value. In the case of such sale by the purchaser to protect his own interests the provisions of Article 392 must be observed.

551.　The purchaser is entitled to require the vendor to furnish him with an account, not later than delivery of the thing, and to make out a receipt for the payment of the price.

552.　A contract of supply is a contract for the sale of a thing which at the time of concluding the contract either does not yet exist, or over which the vendor has no right of disposal, or which is still in transit, or of which delivery is to take place by means of a document to order or to bearer, or by means of some requisite changing by writing of names.

553.　A contract of supply once concluded is binding on both parties thereto ; the right of ownership and risk in the thing, however, only pass to the purchaser upon delivery to him of the thing.

554.　Things naturally extant, but not yet in man's power, are to be deemed non-existent.

555.　Things, for the transmission of which until delivery to the purchaser the vendor is responsible, are to be treated as equivalent to things in transit.

556.　In the case of a contract of supply by means of a document to order or to bearer or the like, it can be determined by contract or the usages of trade that delivery of the thing to the purchaser may only take place on payment of the price to the third person bound by such means of sale as aforesaid to deliver the thing.

557.　Where no delivery of the thing deliverable under a document to order or to bearer or the like is made to the purchaser, he may enforce against the vendor his rights arising from the contract of supply, excepting where, in accordance with the intention of the parties or the nature of the transaction, the vendor is to be free from liability.

558.　The principles governing contracts of sale are to be applied also to contracts of supply, in addition to the provisions in this Section contained.

559.　A person carrying on, as a business, the holding of public auctions for others may not decline, without lawful reason, instructions given to him for such purpose.

560.　Auctions on an Exchange can only be held by Exchange brokers.

561.　Any person is entitled to bid at a public auction, so long as no reasonable suspicion exists as to his solvency or good faith.

562.　No auctioneer may bid on his own account, and a vendor is only permitted to bid where he has expressly reserved the right to do so, and where his object is not to thereby fraudulently force up the price.

563.　In the absence of any express reservation, things brought to auction are at the time fixed for sale, to be adjudicated to the highest bidder.

564.　The contract of sale is concluded in respect of each article or number so soon as the adjudication is given to the last bidder.

565.　Where two or more person make the highest bid at the same time and they are not willing to take the thing in common, the adjudication is given to the one who on a further bidding amongst themselves makes the highest bid.

566.　Where the last bid is invalid or is not accepted by the auctioneer, the adjudication is given to the person who made the bid immediately preceding.

567.　Every bidder is bound by the conditions of sale publicly made known by the auctioneer prior to commencement of the auction, in so far as such conditions are not contrary to law.

568.　An auctioneer may in addition represent purchasers in bidding, and in concluding and carrying out the contract of sale. He is not, however, at liberty to make advances to the vendor upon things entrusted to him for sale by auction before they are sold.

569.　The expenses of sale by auction are, unless otherwise stipulated, to be borne by the vendor.

570.　The auctioneer has a right of claim against the vendor for the stipulated or customary commission, and for indemnification of the expenses and disbursements incurred by him in the sale, in so far as these are not covered by his commission. For such right of claim, and for any advances lawfully made by him to the vendor, the auctioneer is entitled to a lien upon the things entrusted to him for sale or upon the price obtained therefor.

571.　The auctioneer is responsible to the vendor for every damage he occasions the latter by his negligence or unskillfulness or with malicious intent.

572.　Where, after the conclusion of a contract of sale, the purchaser suspends payment, or the fact of his having already done so prior to such conclusion becomes known to the vendor, and the latter does not otherwise receive payment in full or guaranty, he may take back the thing sold, which is in transit to the purchaser or to his order, in so far as it has not yet come into the possession of the purchaser or of his representative, or has not been validly resold or pledged by him.

573.　The re-sale of the goods to a subsequent purchaser is only valid, if, on such sale being effected, he was acting in good faith, and if it was effected in return for a reasonable and actual price ; if such price has not been paid, the original vendor may require it to be paid to himself up to the amount of his right of claim.

574.　The right of stoppage in transit is not precluded by the fact that the vendor has given credit for the price, or that he is in receipt of part payment thereof, or that account current relations exist between him and the purchaser ; such right is, however, precluded by the drawing by the vendor of bills of exchange or by his receipt of bills, notes or other instruments of credit from the purchaser in respect of the full price, provided such instruments bear, apart from the signature of the purchaser or of his representative, the signature of a third person as bound thereon.

575.　Reasonable suspicion of impending suspension of payment by the purchaser or of the possibility thereof on account of embarassed business circumstances, is equivalent to actual suspension of payment.

576.　The taking possession by the purchaser or his representative is to be deemed effected, when the goods have been brought into his warehouse, or have been deposited in a like place in his name irrespective of whether the cost of carriage, custom dues, or other expenses attaching to the goods, have been previously paid by him or not.

577.　The right of stoppage in transit can only be exercised on payment or reimbursement of the expenses, disbursements, or other claims attaching to the goods in respect of transport or occasioned thereby, in particular of cost of carriage, commission, forwarding commission, custom dues, insurance, and average.

578.　The right of stoppage in transit can also be exercised by the principal against a commission agent charged with the sale of goods or his representative, even where he is already in the possession of the goods or has sold them to a third person ; such right can be similarly exercised by a commission agent, charged with the purchase of goods, against the principal.

579.　The right of stoppage in transit can likewise be exercised:--

580.　A loan for consumption may be made either by the creditor direct or by another person on his account, and either to the debtor direct or to another person on his account.

581.　Every advance or payment, and every taking over of a definite obligation on account of the debtor, whether in consequence of direct contract or of some other contractual relation existing between the parties, stands on the same footing as a loan for consumption.

582.　The debtor is bound in every case to repay the subject-matter of the loan in equal kind and quantity, in so far as such repayment can take place or is intended by the parties to take place.

583.　For a loan for consumption in goods or documentary securities, the debtor, unless otherwise agreed upon, and in all cases where he received a specific object, must return the money value thereof at the time and place of receipt.

584.　An instrument of credit running in the name of the debtor or issued on his account, cannot, where the debtor is bound to repay the amount named thereon, be negotiated or otherwise transferred by himself or on his account excepting for its full face value, in the contrary event such instrument of credit loses its validity. The allowance of a discount is not, however, hereby excluded.

585.　Where a loan for consumption is made on an indorsable or otherwise negotiable instrument of credit, the persons who are to be regarded as creditor and debtor are those who are indicated as such on the instrument.

586.　The debtor is bound, even without an express contract, to repay a loan for consumption received by him, unless the contrary was intended by the parties or is to be presumed from the nature of the transaction in question.

587.　The debtor can in no case be deprived by contract of the right at any time to repay a loan for consumption after previous stipulated or reasonable notice ; the creditor, however, unless otherwise stipulated, is only bound to accept the principal and subsidiary amount of the debt in full in one payment, and without the deduction of a discount.

588.　Where a loan for consumption is given for a time uncertain, the debtor may at any time make repayment thereof after previous reasonable notice ; the creditor, however, can only demand repayment after previous reasonable notice and in the absence of violation of good faith.

589.　In the cases in Article 585 specified the obligation of repayment can only be agreed upon for a certain time.

590.　Repayment of the principal of a loan may, irrespective of any contract to the contrary, be claimed before the stipulated time if the debtor remains in arrear with the interest due pursuant to the contract for longer than one interest term, or if he suspends payment or falls into embarrassed circumstances.

591.　In the cases in Article 581 mentioned the creditor's right of claim is enforceable only in conformity with the contractual relations existing between himself and the debtor.

592.　In so far as is not contrary to express contract or to the preceding Article, interest, to such amount as is by the nature of the transaction determinable and customary, may be claimed for every loan for consumption, and for all capital paid out or employed for another.

593.　Interest can only be claimed upon interest which has become due after this has been added to the principal, either by balancing of an account, or by some other settlement of account, or by special contract.

594.　A simple receipt acknowledging repayment of the principal in full is at the same time to be regarded as a receipt with respect to the interest due on such principal.

595.　Interest paid voluntarily cannot be reclaimed.

596.　In lieu of direct repayment, the creditor may require the debtor, up to the amount of the principal and subsidiary debt, to make payment to other persons, to accept or pay bills, notes, or orders, or to take over other obligations of debt on the creditor's account. The debtor may on his side require the creditor to settle the account by crediting payments made in conformity with Article 581.

597.　A promise to give credit, so long as it has not been revoked, is binding, whether it be given as a subsidiary term of another contract or as an independent promise.

598.　A promise of credit to a fixed amount cannot be revoked, if it was given to a creditor, either expressly or according to circumstances, for the purpose of payment of a debt or for the purpose of security.

599.　An independent promise of credit, after it has once been accepted for a fixed amount, is revocable only if the person who is in receipt of credit fails to fulfil the obligations undertaken by him in return, or suspends payment, or falls into embarrassed business circumstances, and the giver of credit is not possessed of sufficient cover or guaranty.

600.　A promise of credit may be given for a fixed or an unlimited amount, for a time certain or uncertain, conditionally or unconditionally, specially or to order.

601.　A mutual promise of credit is binding on both parties according to the principles of bilateral contracts ; it is revocable, however, in the cases in Article 599 specified.

602.　The acceptance in account current of a deposit or of other sums of money or of valuables is to be deemed a tacit promise of credit up to the full amount of credit then standing open.

603.　In case of doubt, interest or commission for a promise of credit can only be claimed in proportion to the amount of credit actually given in pursuance of such promise.

604.　Where a promise of credit is given by means of an order or letter of credit addressed to another, the party issuing the same is responsible to the promisee for performance, and such performance takes place on account of the issuer ; acceptance, however, of such order or letter of credit by the addressee is to be regarded as a fresh promise of credit.

605.　Where a promise of credit is given in pursuance of the instructions of another person, such person is to be regarded as surety of the promisee.

606.　The recommendation of a person for a grant of credit to a fixed amount, if given without reservation is to be regarded as an instruction to give credit.

607.　Whoever takes over for keeping a thing belonging to another, is responsible for the return thereof to the depositor, exercising with respect thereto the same care as he exercises with respect to his own property.

608.　A person who receives a reward for the keeping of things belonging to others, or expressly takes upon himself the responsibility therefor, or takes over such things not only for the purpose of keeping but also for the purpose of management, or makes a business of the keeping, or management, of such things, or with whom such things are deposited in the course of the business in which he is engaged, is responsible to the depositor for the exercise of the utmost care.

609.　Every innkeeper, restaurant keeper, keeper of a bathing establishment, or other person who in the course of his business receives guests is liable for loss or damage to the things brought by such guests and deposited on his premises, and he cannot free himself from such liability, either by means of a notice of non-liability, or by calling upon such guests themselves to exercise care, or in so far as there was fault on the part of himself or of any person in his service, by express contract. Large sums of money and things of special value are to be declared and committed to special keeping.

610.　The depositary may by contract, or without any contract where he keeps, or manages, things belonging to others as a business, claim a reward for his care, and, in every case, may claim to be indemnified for his necessary disbursements ; he may also claim to be indemnified for any damage he may by the fault of the depositor have sustained.

611.　Excepting in the case of Article 617, the return of a deposit may be at any time demanded without previous notice, irrespective of whether such deposit was made for a definite or for an indefinite period of time.

612.　A thing deposited for an indefinite period may be at any time returned by the depositary, provided that he gives a reasonable or the stipulated notice.

613.　Where a thing is deposited by two or more persons jointly, it may, unless otherwise stipulated, be re-demanded by and returned to any one or more of them.

614.　Fruits or benefit which accrue from the thing deposited during the period of deposit belong, unless otherwise stipulated, to the depositor.

615.　Where things are deposited merely according to kind and indicated by number, weight, or other measure, they can, in so far as they are not, according to their nature, to be regarded as specific objects, only be required to be returned in equal number, weight, or measure.

616.　Where fungibles belonging to two or more depositors become mixed together, each depositor becomes co-owner in the mixture in proportion to the amount deposited by him, and bears, in such proportion, the risk of loss or damage to the entire mixture.

617.　Where fungibles are deposited in such manner, that according to contract or the usages of trade the depositary is entitled to the use or disposal thereof, the right of ownership therein and the entire risk of loss thereof or damage thereto is transferred to the depositary, irrespective of whether he receives a reward or not, or pays interest to the depositor or not.

618.　The question as to whether the depositary is entitled to the use of specific objects deposited is to be determined entirely according to the intention of the parties.

619.　In the absence of any express agreement to the contrary, deposits of money or precious metals made without being sealed up or otherwise secured are always to be regarded as the property of the depositary ; similar deposits of documentary securities, however, only where they have been transferred by the depositor to the depositary at a settled rate.

620.　On a deposit wherein the ownership passes to himself the depositary is only required to pay interest where such was expressly agreed upon, and can only claim a reward, if such was expressly stipulated for or is customary.

621.　Deposit-receipts may be made out either to the name of the depositor, or to order, or to bearer ; they are indorsable, unless the contrary is stated thereon.

622.　In the cases of Articles 617 and 61g, the depositary or depositor may, by contract or the usages of trade, be permitted the right respectively to return or require either the thing itself, or the market price thereof at the time and place of delivery or re-delivery.

623.　A depositary is not bound to inquire into the depositor's right of ownership or disposal, or to inquire into the rights of the person who presents the deposit-receipt and claims the return of the deposit ; the depositary is responsible, nevertheless, for malicious intent or gross negligence.

624.　The principles laid down in Article 615 and following Articles apply also to inland carriers, masters of vessels, and other persons, with regard to things entrusted to them according to number, weight, or other measure, without being secured or marked, for the purpose of transport, of having work done upon them, or for some other purpose ; they further apply to a pledge creditor to whom money or other fungibles are delivered for the purpose of pledge.

625.　The contract of insurance is a contract whereby the insurer, in return for the payment of a premium, binds himself to indemnify the insured for loss or damage which may arise with respect to a specified object, during a specified period, from an unknown or uncertain event.

626.　The risks which may be insured against are chiefly fire, earthquake, storms, and other natural occurrences, the risks of transport by land and by water, death and personal accidents. Insurance against other risks is not, however, excluded.

627.　Every interest in property which the insured has as owner, creditor or by virtue of some other legal title or relation, and by the injury to which in consequence of the happening of the risk the insured would be directly damnified, is insurable.

628.　An insurance may be effected by a person on his own account or on account of another, and with or without the instructions or previous knowledge of the insured, and without the latter being indicated.

629.　The insurable interest is, as a rule, limited to the ordinary value of the thing insured ; where it is to exceed such value, it must be the subject of a special and express agreement.

630.　The value of the thing insured is determined in the case of movables intended for use by the cost of restoring or replacing the same, and in the case of commercial goods by their market price at the time and place of the happening of the damage or loss.

631.　No insurance is valid to an extent beyond that of the insurable interest in the thing insured.

632.　Where the value of the thing insured is previously fixed by express contract or on the basis of a valuation by experts, such assessment can thereafter only be disputed on the ground of coercion, deceit or material excess, and the provision of the preceding Article does not apply.

633.　The value of an insured right of claim is determined by the amount of the debt, together with interest and the expenses of collection.

634.　The amount of indemnity payable, in the case of insurance of persons, is the sum insured, and in the case of insurance of things, is the extent to which the insured has been directly or indirectly injured by the occurrence of the risk.

635.　The insurer is not bound to make good loss or damage which the insured unnecessarily and voluntarily occasioned himself or permitted to be so occasioned, or which had its immediate cause in the nature or inherent defects of the thing insured or in the use for which it was destined.

636.　An insurance effected against a risk which has already happened at the time of concluding the contract of insurance is invalid, excepting where neither of the parties nor either of their representatives had knowledge thereof and the insurance was effected with the express intention of including such risk.

637.　Where one and the same person is insured separately and with respect to the same thing in respect of the same interest by two or more insurers, either simultaneously or at different times, each of the insurers must be notified of such double insurance and their assent must be obtained, failing which any of them may cancel the contract.

638.　In the case of double insurance, the insured, unless otherwise agreed upon, may claim payment of the indemnity from each of the insurers, and any insurer who has paid can claim from the other insurers their share of the indemnity paid ; the amount thereof is to be settled among them proportionately to the amount of all the insurances, so far as any of the same is not invalid or has not terminated by expiration of time or otherwise.

639.　In case of insurance below the amount of the insurable interest, the insured is to be deemed his own insurer for the remaining amount, and is, unless otherwise agreed upon, to bear the loss in the proportion which the latter has to the former.

640.　By alienation of the thing insured, or by other transfer of the insurable interest, the insurance passes as of course to the new acquirer, except in so far as the alienor retains an interest or anything in Article 654 contained is opposed thereto, or unless the insurer has expressly reserved to himself the right to give his consent to the transfer.

641.　The right of claim to a sum insured may, unless otherwise stipulated, be assigned to a third person either before or after it falls due without the consent of the insurer, and the insurer is bound from the time when he acquired knowledge of such assignment to make payment to such person exclusively.

642.　The conclusion and performance of contracts of insurance are governed by the principles laid down in Chapter VII of this Code ; nevertheless the insurer is in every case bound, forthwith upon such conclusion, to make out a policy of insurance and to deliver the same to the insured, and is liable to him for all damage caused by failure or delay in so doing.

643.　The contract is to be deemed to be concluded, when the insurer, or his representative authorized to conclude it, has without objection accepted the written insurance proposal with its accompanying written declaration.

644.　A contract of insurance may be concluded by either party through a commission agent.

645.　Insurance public agents established elsewhere than at the seat of business of the insurer and insurance public agents in Japan of an insurer abroad, are, with respect to the insured, and provided that they have made no declaration to the contrary to him, to be deemed to be empowered to conclude contracts, to accept declarations, to receive premiums, to pay over the sum insured, and in every other manner to represent the insurer.

646.　The policy must be dated and must be signed and sealed by the insurer or his representative, and it must contain the following particulars:--

647.　The contents of the policy may be corrected, explained, supplemented, or altered by the usages of trade, or by supplementary or other documents relating to such policy.

648.　A policy of insurance may be made out to order or to bearer, but not in blank.

649.　The contents of a contract of insurance can only be proved by means of the policy or writings relating thereto, unless these no longer exist, or were not made out.

650.　The value of the thing insured, in so far as it is not specified in the policy, and the amount of the damage sustained may be proved by any other legally admissible evidence.

651.　The insured is bound, on the happening of the risk, to take all possible care to avert the same, and also, after the occurrence of the risk, to forthwith notify the insurer or his agent thereof, as well as of the fact and amount of the loss or damage sustained ; the insured is liable to the insurer or his representative for any detriment caused by the violation of this obligation.

652.　No insurance covers risks occasioned by reason of war or civil commotion, unless such risks have been expressly accepted.

653.　The insurer is entitled to dissolve the contract, if the insured, in concluding the same, misrepresented or concealed material facts, irrespective of whether the same was done with malicious intent, or not ; but the insured is to be deemed free from blame, if he has answered every question put to him by the insurer to the best of his knowledge and in good faith ; the right of the insurer to dissolve the contract is not, however, affected by such circumstance.

654.　The insurer is not bound by the contract of insurance, unless the same is continued by him, in cases where, subsequent to the conclusion of the contract, some change in the conditions takes place with respect to the thing insured which increases or alters the risk taken, or where the premium, unless delay in the payment thereof is expressly or impliedly accorded, is not paid within the stipulated or customary time, provided such payment has been demanded upon presentation of a receipt.

655.　The contract is not binding on the insured so long as the risk taken does not commence to run against him ; nevertheless, no division of the premium by reason of diminution or shortened duration of the risk is permissible, unless it was paid in advance in respect of two or more periods for the payment of premium.

656.　Where, during the continuance of the insurance, either of the parties is declared bankrupt, the other party may, at his option, either cancel the contract or require guaranty for its performance.

657.　Where, in the absence of fault on the part of the insured, the contract is invalid, or is voluntarily cancelled, all premiums already paid must, subject to the customary reduction due to the insurer, be returned to him in their entirety where the insurer ran no risk, otherwise only the premium for the current period must be returned to him subject to the like reduction, and in proportion to the diminution of the risk, in cases of double insurance, or of over-insurance, of lessening of the insurable interest, or in cases having any other causes.

658.　By payment to the insured of the sum insured the insurer acquires, as of course, any existing rights of claim against third persons to which the insured is entitled in respect of the damage sustained, and in particular, in the case of insurance of a right of claim, the rights of the creditor against the debtor ; such acquisition cannot extend, however, beyond the amount paid.

659.　In the case of partnerships or companies founded for the purpose of mutual insurance of the members thereof, the rights and obligations of these latter, in particular with regard to payment of premiums or of additional premiums, payment of the debts of the partnership or company, participation in its profits, and the presentation of accounts, are to be determined according to the contract or regulations of such partnership or company, and, in so far as they are inadequate, by the provisions of this Code.

660.　Movables or immovables may be insured by a person who as lessee, usufructuary, depositary, or in other like capacity, has the possession or custody thereof either in his own interest, or in the interest of the owner or in that of both. Where doubt exists with respect hereto, the first is to be deemed the interest insured.

661.　Where, in the case of insurance of immovables, the' insured is bound by law, ordinance or other public regulations or by contract to undertake the reconstruction or the repair of the destroyed or damaged object, the insurer may apply to the Court to fix a term for the fulfilment of such obligation by the insured or his successor in rights, and may supervise the execution thereof, and he is only required to pay out the sum insured in proportion as the work progresses.

662.　Movables may be insured either specifically or as a whole ; in the latter case the insurance is not affected by the occurrence, during the term of insurance, of any augmentation or diminution in the constituent parts of the whole, or by reason of such parts being entirely or partially replaced by others during such term.

663.　An insurance of movables is only valid as regards the dwelling-place or other locality named in the policy ; the insurance is not, however, voided by removing provisionally of the thing insured to some other place.

664.　The provision of Article 635 only applies to objects exposed to the risk of spontaneous combustion or explosion, if the insured has neglected to take the stipulated or requisite precautionary measures.

665.　Loss caused to the insured whether the fire breaks out on the premises of the insured himself or in their neighbourhood, by measures taken to extinguish such fire or taken for the purpose of saving life or property, or by theft or in some similar manner is to be deemed loss by fire.

666.　The risks of lightning, of explosions of or by powder or engines, and other similar risks, as well as the risk of earthquake are, if not otherwise agreed upon, to be treated as a risk of fire, irrespective of whether a fire ensues thereon or not.

667.　Fruits of the earth and other natural products are only insurable against extraordinary occurrences of nature which cannot be averted by human power and care, such as violent rains, floods, drought, or storms.

668.　Unless a shorter period is stipulated, the insurance is valid for one year.

669.　Where damage has occurred, the indemnification payable to the insured is, in proportion to the sum insured, the amount of the difference between the value of the insured products after the event and the value which they would have possessed at maturity, if no damage had occurred unless the sum insured exceeds the last named value.

670.　The insurer is not liable unless the damage amounts to at least one fourth of the value which the products would have possessed in the absence of such damage.

671.　Things in transit may be insured by inland carriers and by any one having an interest in their safe arrival at the place of destination.

672.　The insurer, by an insurance of things in transit, takes over every risk of loss or damage to such things during the transit, including risks of fire, theft, robbery, hostile force, and others similar thereto, in so far as no particular risks are expressly excepted.

673.　When things in transit are alienated during the transit, the insurance passes in accordance with the provisions of Article 640 from the alienor to the new acquirer.

674.　Where any loss or damage not covered by the policy occurs to a thing in transit, it is on the insurer to prove such exception.

675.　In the absence in the policy of any expressly specified value, the basis in determining the amount of loss is the original value of the thing in transit with the accessory expenses, or, where this cannot be ascertained, the ordinary or market value of the thing at the place and time of loading together with all imposts, expenses of insurance and loading, as well as the expenses with which the insured is charged for transport.

676.　In addition to the particulars in Article 646 specified, the following must be stated in the policy:-- The nature of the transport and particular means of transport ; The names of forwarding agent and of the inland carriers ; The route by which the insured thing is to be carried, with special mention of the place of departure and the place of destination and, where any place is to be stopped at, of such place ; The duration of transit, if any such has been agreed upon.

677.　The life or health of a person may be insured for the term of his life or for some other specified period of time.

678.　Any person may insure his own life or health or that of another, if in the latter case he has at the time of effecting the insurance a pecuniary interest in such other's life or health.

679.　The consent or knowledge of another person whose life or health is insured is not requisite for the validity of such insurance.

680.　The sum insured, as soon as it has fallen due, must be paid to the insured, or to the person for whose benefit, according to the policy, the insurance was effected or to whom the right to claim such sum has passed.

681.　The life or health of a person may be insured by another in pursuance of a contractual obligation either in the interest of such person himself or for the benefit of a third person.

682.　The insurance is or becomes void :--

683.　In all cases where the insurance is or becomes void, there must be returned to the insured the amount stipulated in the event thereof in the contract of insurance and, in the absence of any such stipulation, one half, at least, of the reserve fund already accumulated for him, excepting where he has himself occasioned the invalidity by deceit or in violation of good faith.

684.　The insurer is not entitled to set up the invalidity of the contract against the insured, if he continued the contract with the latter after becoming acquainted with the circumstances causing the invalidity thereof.

685.　The falling due of the sum insured may, apart from the happening of death or accident, be made by contract dependent on the attaining of a certain age, or on the expiration of a certain period of time, or the payment of an annuity may be stipulated for in the place of payment of an insured sum.

686.　The insurance of an annuity is a contract by which the insurer binds himself, in return for a specified sum, to pay to the insured or, upon his death, to others participating in such insurance, a fixed annuity for life, or until the expiration of a certain time.

687.　The right of receiving the annuity may, in conformity with the provisions of Article 641, be assigned by the insured to another person to the same extent and under the same conditions as it belongs to the insured.

688.　In all cases of life insurance, insurance against accidents, and insurance of annuities, the insured or his successor in rights is entitled, upon giving previous due notice, either to cancel the contract and receive the amount due to him in pursuance of the contract of insurance or of Article 683, or to convert the contract into a deposit of capital bearing interest and subject to a previous notice of withdrawal.

689.　No insurance partnership or company may carry on its business until it has obtained the sanction of the Government.

690.　Every insurance partnership or company is bound, by means of annual accumulations, to form a reserve fund out of the premiums paid to it and from other receipts, and such reserve fund is at all times to amount to at least twice the average amount of the insured sums annually payable. This reserve fund must be safely invested and the documents of title issued in respect thereof deposited with the Court, and the revenue flowing therefrom accrues to the partnership or company.

691.　Every insurance partnership or company is bound, once at least in every year, to prepare and publish a statement of its annual revenue and expenditure and a balance sheet of its assets and liabilities, and to forward a copy thereof to every member and to every person insured.

692.　The Court is empowered, upon the application of any person insured, to at any time investigate, by the aid of One or more experts, the state of the insurance business, the condition of affairs, and the proportion of assets to liabilities of an insurance partnership or company, as well as the principles upon which it carries on the business of insurance, and to acquaint the persons insured with the result of such investigation and to publish the same. The expenses of such investigation and publication are to be borne by the partnership or company, if, in the opinion of the Court, there existed sufficient grounds for making the application.

693.　A partnership or company carrying on in addition to one branch of insurance business other branches thereof must conduct each branch of insurance business separately, and must accumulate and employ the receipts of each branch exclusively for the purposes thereof. The above provision also applies in the case of the bankruptcy of an insurance partnership or company. The assets remaining over in case of bankruptcy are to be distributed in accordance with Article 1045.

694.　Where an insurance partnership or company violates the provisions of Articles 690-693, or where, without the consent of all the persons insured, it amalgamates with another partnership or company carrying on the same or another kind of business, or where it alters or actually violates the principles of insurance business adopted by it and made known to the insured, every person insured is at any time entitled, without giving previous notice, to cancel his insurance and to require the partnership or company to return all premiums paid by him for the current term of payment together with in terest at the legal rate from the respective days of payment.

695.　Where an insurance partnership or company is in such a condition of affairs that it is apparently unable to fulfil its future obligations, any person insured may apply to have it adjudged bankrupt, even if it has not yet stopped payment.

696.　An insurance partnership or company concluding contracts of insurance by means of public agents in places other than at the seat of its head office is with regard to such contracts, and irrespective of the authority conferred on such agents, subject to the jurisdiction of the Court within whose district the agent in question has his place of business, and is bound to appoint for itself a judicial representative to appear for it in such Court, failing which the agent in question is to be regarded as such representative.

697.　Every agency of a foreign insurance partnership or company established in this country in accordance with Article 645 for the purpose of independently concluding contracts of insurance, is to be regarded as a branch establishment of such in surance partnership or company, to which the general provisions with regard to branch establishments, as well as the provisions of this Section, both apply.

698.　The provisions in this Section contained are to be applied also to individuals and to associations carrying on the business of insurance.

699.　Bills of exchange and promissory notes are instruments of credit running to order or to bearer and which provide for the unconditional payment of a certain sum of money and import as of course lawful consideration.

700.　Every person who has capacity to trade may bind himself by a bill or note.

701.　The presence on a bill or note of the signature of a person incapable of so incurring liability does not affect the validity of the remaining signatures thereon.

702.　A bill or note in which an essential requisite has been fictitiously inserted is not to be deemed a bill or note with regard to persons aware of such fact.

703.　A person who places his signature on a bill or note on behalf of another without his special instructions, or without expressly indicating that he is acting in a representative character is personally liable therefor.

704.　The payee of a bill or note may directly demand the drawer or maker to furnish him with numbered parts of the same of a like tenor ; so also may any subsequent holder through the intermediary of the previous holders.

705.　Subject to such exceptions as are admitted by law or by the usages of trade, a bill or note is of itself binding according to the tenor of its contents.

706.　A bill or note which does not possess the essentials required by law, or of which the contents are illegal though possessing such essentials or are in themselves contradictory, unless such contradiction can be lawfully removed, is void.

707.　The validity of the contents of a bill or note which complies with legal requirements is not affected by additions on such bill or note which are immaterial to such contents ; and no liability appertaining to bills or notes as such can arise on such additions.

708.　A forged or fraudulently altered bill or note is valid as such, but such forgery or fraudulent alteration, whilst itself creating no liability, does not affect liabilities once validly created.

709.　Liabilities appertaining to a bill or note are to be determined, so far as the contracting thereof is concerned, by the law of the place named on the bill or note, and, where no such place is named, by the law of the domicile of the debtor, and, so far as their fulfilment is concerned, by the law of the place where fulfilment is to take place.

710.　The possessor of a bill, note, or cheque, who has acquired it by lawful means and without gross negligence, cannot be required to deliver up such bill, note, or cheque, or the proceeds thereof, except in cases where the demand so to do is based on such facts as would constitute a plea to a claim on his part for. delivery up of the instrument to him.

711.　The provisions of Article 403 are to be applied to bills, notes, and cheques stolen, lost or otherwise missing.

712.　Claims arising on a bill or note against the acceptor or maker respectively are prescribed after a period of three years, calculated as beginning to run from the day of maturity ; the rights' of recourse of the holder and of the indorsers respectively against the drawer and prior indorsers are prescribed after a period of three years running from the day of protest or notification of the claim.

713.　Where a bill or note is payable at sight, or at a fixed period after sight, prescription begins to run from the expiration of the period provided for presentment, if no presentment has taken place at an earlier date.

714.　Where a person has lost his rights of claim under a bill or note in consequence of prescription, or in consequence of the omission of acts provided for by law, he can, nevertheless, and even in the case of Article 711, enforce such rights against the drawee, drawer, maker, or indorser to the extent to which they have benefited by any provision that they have not disbursed or that has been again reimbursed to them.

715.　All persons whose signatures appear on a bill or note are by virtue thereof jointly and severally liable ; such liability of each debtor is, however, quite independent of that of the others.

811.　A promissory note must distinctly and accurately contain :--

812.　A promissory note cannot be made to the order of the maker.

813.　Where no particular place of payment is named, the note must be paid at the place where it was made.

814.　The maker of a promissory note by making it binds himself to pay it on the day of maturity.

815.　Subject to the provisions in this Section contained, the provisions relating to bills of exchange apply to promissory notes, in so far as they are not excluded by the nature of the case.

816.　A cheque is an order in writing to a banker, with whom the drawer in consequence of a deposit or for some other reason, has a current credit, to pay on presentment a certain sum of money to the person named in the instrument, or to his order or to bearer.

817.　A cheque is to be dated and signed and sealed by the drawer, and may only be drawn payable at sight ; subject to these provisions, the method of drawing expressly or impliedly agreed upon with the banker must be observed.

818.　A cheque is transferable by indorsement, and, where it is indorsed in blank, or drawn payable to bearer, by delivery.

819.　A cheque requires neither acceptance nor protest. Claims on a cheque are prescribed after the expiration of three years from its date. In the event of a cheque not being presented or forwarded for payment within three days of the day of its issue, the holder bears the consequences of the delay.

820.　Where, on presentment, payment of a cheque is not made, the holder and every indorser has during a period of ten days from the date of the cheque a right of recourse ; the holder against all indorsers and the drawer, and each indorser against the parties prior to himself and the drawer ; as against the drawer, however, such right of recourse continues even after such period has elapsed if he had no credit open, or had exhausted the same, or had countermanded payment.

821.　The drawer or holder of a cheque may cross it and state between the crossing lines that it is payable to a banker only.

822.　On receipt of payment, the cheque must be delivered up receipted.

823.　Whoever issues, indorses, or receipts a cheque without the insertion of a date or with the insertion of a false date, or receives, pays or receipts an undated cheque, or issues a cheque without having credit open to meet it or countermands payment of a cheque without just cause, shall be punished with a fine equal to ten per cent of the amount of the cheque in addition to any criminal punishment he may have incurred.

834.　Merchant ships and other sea-going vessels are movables, so far as no exceptions are in this Code established.

835.　Contracts with regard to the building of ships and contracts with regard to the acquisition of ships either in whole or in part, by purchase or other legal act, can only be concluded by means of special documents of contract.

836.　A valid sale of a ship can only be effected by a non-owner under an express instruction of the owner ; the master, however, in the event of unavoidable and officially established necessity, may, without any such instruction, validly sell the ship by means of auction.

837.　The period for the acquisition by prescription of a ship is twenty years. The master of a ship can never acquire the same by prescription.

838.　The ownership of a ship, in so far as it is not otherwise agreed upon, includes that of her entire equipment for purposes of navigation, in particular the masts, sails, and tackle, the engines, anchors, ship's instruments, boats, and stores and provisions, with the exception of everything forming the personal property of the master or crew.

839.　Where a ship is alienated during the voyage, the profit or loss of such voyage, unless otherwise agreed upon, passes to the acquirer.

840.　The voluntary sale of a ship effects no change in the liability of such ship, or of the price realized, for the claims of the ship's creditors, nor does it cause any alteration in the personal obligations of the vendor. In the event of a compulsory or necessary sale, the liability attaching to the ship passes of itself to the purchase-money.

841.　Where a ship is the property of two or. more part-owners, there must be appointed a ship's husband to represent them in all businesses relating to the voyages of the ship.

842.　The owner answers with ship and freight for the acts of the master and of the members of the crew in the exercise of their employment. If the master is at the same time the owner of the ship his liability is unlimited. If he is part-owner his liability is proportionate to the extent of his share, unless owing to fault on his part he incurs undivided liability ; for any deficiency, however, his liability is unlimited.

843.　The owner may appoint the master and dismiss him at will, and, in the absence of a written contract, is not bound to indemnify him.

844.　Where the master is at the same time part-owner, he may, in the event of his being dismissed against his will, claim payment of the value of his share, which value is to be determined by experts.

845.　All questions arising between part-owners concerning the ship are to be decided by a majority of votes, which are to be calculated according to the extent of the share held by each part-owner.

846.　A shipowner has no right of claim to the profit arising from the voyages of the ship until all expenses and losses have been deducted.

847.　A part-owner of a ship may at any time freely alienate his share without the consent of the other part-owners or of the ship's husband.

848.　Whenever a transfer of the ownership of a share in a ship would deprive such ship of her nationality, the remaining part-owners or any of them, are entitled to take over such share on their own account at a valuation which is, if necessary, to be judicially fixed, or to require such share to be sold by auction to a person qualified to be owner thereof.

860.　Every master or other commander of a ship is liable for fault, even though slight, in the exercise of his functions ; he is, in particular, responsible for the cargo and for the safety of his passengers and for their effects.

861.　He is relieved from liability for any act towards any person under whose directions he has acted, if such person had knowledge of the circumstances of the case.

862.　On every voyage the master is bound to see that the ship is seaworthy, properly equipped, manned, and provisioned, that the cargo is properly stowed, and that the ship is provided with the necessary ballast, and is not overladen, or overcrowded with passengers.

863.　The master has the right to select and engage the members of the crew, to form the ship's company, to repair and equip the ship, and to conclude contracts of affreightment ; nevertheless, in these respects he is subject to the directions of the shipowner or of his representative.

864.　On every voyage he is required to have on board the certificates of nationality and of registry, the log book, the list of crew, the custom house clearance, the papers relating to the contracts of affreightment and to the cargo and the list of passengers.

865.　The log book is to be kept by the first officer under the supervision of the master and is to contain a daily record of all matters and occurrences relating to the ship, crew, passengers, and cargo, in particular:--

866.　The master must be personally on board from the commencement until the termination of each voyage, and must proceed on every voyage he is instructed to undertake and complete the same without delay or deviation.

867.　The master is required, within twenty four hours of the ship's arrival at her port of destination, to attend before the maritime authority at such place to produce his log book for the purpose of being certified and to at the same time make his report. The report is to give :-- The name of the ship and her tonnage ; A description of the cargo ; The port and time of departure ; The ship's course ; The conditions of wind, weather and currents ; Any deaths and other disasters, any changes in the condition of the ship, and all noteworthy events of the voyage.

868.　Where during a voyage it becomes necessary to run into a port of distress, the master must forthwith attend before the maritime authority of the port and make a report concerning the causes and circumstances connected therewith for the purpose of having the same protocoled. Such protocol is to be forwarded, officially drawn up, to the ship's owner and, on demand, to all other persons interested at their expense.

869.　In case of peril arising during the voyage the master may under no circumstances desert his ship, excepting after previous consultation with the ship's officers and other principal members of the crew ; in such event, he is bound to leave the ship last and remains responsible for the rescue so far as possible of the persons, papers and goods on board, and of the ship herself.

870.　In case of shipwreck or other event necessitating desertion of the ship, the master is forthwith to go bfeore the nearest maritime authority and make his report upon the causes and circumstances of the case ; such maritime authority may examine members of the ship's crew and passengers and may make all other inquiries for the purpose of confirming or supplementing the report.

871.　In cases of necessity during the voyage the master, after consulting with the officers, and in order to provide for the needs of those on board, is empowered to make use of all provisions existing in the ship on making compensation for their value, and without regard to the persons to whom such provisions may belong.

872.　During the course of the voyage the master, for the purpose of repairing the ship or for other things she may absolutely require, and provided no other means are at his disposal and the shipowner or his representative is absent, is entitled, by virtue of previous consultation with the ship's officers and upon obtaining the sanction of the maritime authority, to mortgage the ship or to pledge or sell the cargo in whole or in part, in return for which the owners of the cargo are entitled to be indemnified according to the prices current at the place and time of discharge.

873.　The master is bound both at the commencement and at the termination of every voyage, and, on demand, at any time, to report to the shipowner and to render him an account.

874.　Neither master nor crew are permitted, without the consent of the shipowner, to receive any goods on board on their own account ; failure to comply herewith entitles the owner to claim both the freight and any profit arising on such goods.

875.　When members of the crew are engaged or discharged, their names are to be entered in or written off from the crew list before the local maritime authority.

876.　The conditions of engagement of members of the crew are determined by the contents of the crew list, by special contract, or by the usages of trade.

877.　Members of the crew discharged without sufficient cause are entitled to receive, by way of indemnification in addition to the whole of the wages due, one half of the wages they have been deprived of earning by reason of such discharge, nevertheless, this sum may not exceed one month's wages.

878.　Any member of the crew discharged during a voyage without sufficient cause is entitled to claim a return passage free of cost to the port of his departure.

879.　Where a member of the crew has been engaged for a specified voyage, he is entitled, in the event of such voyage being prolonged, to a proportionate increase in wages.

880.　In the event of the ship being sunk before the voyage has been completed, the members of the crew lose their right to claim wages, excepting in so far as any part of ship or cargo is saved by their exertions.

881.　Members of the crew are also entitled to claim wages in respect of those days on which they are employed in saving the wreck of ship or cargo.

882.　Members of the crew who fall ill or are injured after they have entered upon their employment have a right to attendance and medical treatment for a period not exceeding three months, unless such illness or injury was brought about through their own fault.

883.　In the event of a member of the crew dying after he has entered upon his employment, his wages up to the day of his death are payable to his heir, and if he was killed in defending his ship, the amount so payable consists of the whole of his wages for the entire voyage.

884.　No member of the crew, after he has once entered upon his employment, may leave the ship without the permission of the master or of his representative.

885.　The provisions in this Section contained apply also to the master, in so far as it is not otherwise provided or does not otherwise follow as of course from the nature of the case.

886.　Every breach of duty on the part of a member of the crew, in particular disobedience and resistance, is to be suppressed by the master by the exercise of his disciplinary powers.

887.　The contract for the letting of a ship or of a part thereof for one or more voyages must be formed in writing and a copy thereof in original must be kept by each party thereto.

888.　Unless otherwise determined by contract, the place of loading, lay days, demurrage days, and demurrage are regulated by local usage.

889.　In calculating lay days and demurrage days, general holidays and those days on which the loading or unloading is prevented by wind or weather or some other natural or legal impediment are to be excluded.

890.　Where freight is fixed by the month or other period of time, such period, in the absence of any contract to the contrary, is to be calculated from the day on which the ship sails.

891.　If, before the voyage commences, trade or intercourse with the port of destination is prohibited, the contract is cancelled without any right to indemnification on either side.

892.　In the event of the port of destination being closed by blockade or other measure, the master, in the absence, or impossibility of execution, of other instructions, must in the interests of the charterer take his ship into one of the nearest ports or return to the port of departure.

893.　If the commencement or the continuation of the voyage is temporarily prevented by irresistible force, the contract still remains effective without either party being entitled to indemnification ; the charterer, however, is entitled to deal with the cargo as he sees fit but at his own expense.

894.　The charterer may cancel the contract before loading has commenced on payment of one half of the freight. Failure to furnish cargo during the lay days is to be regarded as cancellation of the contract, and in such event one half of the freight must be paid.

895.　If. by the fault of the charterer the cargo is confiscated or seized, he remains liable for the whole amount of the freight and is bound to make good any damage occasioned to the ship thereby.

896.　Unless the charterer cancels the contract, the master is entitled and bound to proceed on the voyage, even without the full cargo agreed upon. In such case, however, if his guaranty is not sufficient for the full freight, he may demand further guaranty as well as indemnification for any loss sustained through deficiency of cargo.

897.　Excepting in the case of the second paragraph of Article 905, any receipts in respect of other goods conveyed or any saving in expenses effected by reason of the voyage not taking place cannot be deducted from the freight.

898.　The principles governing charter-party apply also to the case of the charter of a ship for a voyage for a purpose other than that of conveyance of goods.

899.　A bill of lading is a receipt of the master for the goods delivered to him for conveyance. It contains:--

900.　The bill of lading must be made out within twenty four hours of shipment being completed.

901.　The contents of a bill of lading made out as prescribed constitute conclusive evidence between the parties interested, and between them and the insurers ; nevertheless, counter evidence is not excluded.

902.　Upon payment of the freight and accessory charges together with average and any disbursements, and in return for a receipt, the master is bound to deliver the goods at the port of destination to the person who is the holder of the bill of lading. If two or more holders of the bill of lading present themselves, the goods must be deposited in a public warehouse or, by virtue of an order of the Court, with a third person.

903.　The amount of freight is regulated by contract or by the rates current at the time, and must be evidenced in the former case by the charter-party or the bill of lading.

904.　Where the master has expressly overstated the burden of his ship, he is bound to indemnify the charterer or shipper for any damage he may in consequence of such statement have sustained, and the freight is to be proportionately reduced, save where such statement was in conformity with the official certificate of measurement or where the difference, if it was due to mistake, does not exceed one fortieth part.

905.　If, in the case of a charter-party, the charterer fails to furnish the full cargo contracted for, he is none the less liable for payment of the entire freight ; a proportionately increased freight must be paid for additional cargo.

906.　Prior to commencement of the voyage the charterer or shipper may withdraw goods other than those in bulk on paying half the freight and the expenses occasioned by such withdrawal. Full freight must be paid for goods withdrawn after the voyage has commenced, together with the expenses thereby occasioned. The provisions of Article 908 are, however, to be applied where the withdrawal was occasioned by fault of the master.

907.　Where goods have been put on board without the consent of the master or under a false declaration, the master may land them, or may charge the maximum rate of freight in respect thereof or may even have them thrown overboard if the ship or other goods are endangered by them.

908.　Where a ship is unseaworthy, or is not of the stipulated nationality or loses the same, the charterer or shipper may cancel the contract ; in such case the master loses his right to the freight and must indemnify the charterer or shipper for any damage that may have been caused him.

909.　If the ship requires to be repaired in consequence of injury occasioned during the voyage, the charterer or shipper can cancel the contract on paying the full freight.

910.　In the cases specified in Article 893 the expenses of detention are to be treated in accordance with the principles governing general average.

911.　The expenses of delay caused by the charterer or shipper or by the master before or during the voyage or at the place of destination are to be borne by the person who caused such delay ; he must also make indemnification for any damage thereby occasioned.

912.　Full freight must be paid in respect of all goods lost through fault of the charterer or shipper, or in consequence of their nature, or through accident, and for all goods sold in conformity with Article 872 or thrown overboard for the purpose of saving from a common danger ; in the last mentioned case, however, such freight is subject to average contribution.

913.　No freight is payable for goods lost by shipwreck, stranding, or capture, and, unless otherwise agreed upon, any freight paid in advance must in such case be refunded.

914.　If the freight cannot be obtained from the consignee or from the sale of the goods, the charterer or shipper remains liable therefor.

915.　The master preserves a right of preference against the goods carried in respect of freight and other rights of claim for the space of fourteen days after delivery, unless they have passed into the possession of third persons, and although the owner should become bankrupt during the said period.

916.　No diminution in the freight can be claimed by reason of loss of the goods, altered circumstances, or on any other ground.

917.　Goods can be abandoned to the master for the freight if he is responsible for their loss in value.

918.　If the passenger is named in the contract, the right to conveyance cannot be transferred to another party without the consent of the master.

919.　Passengers are bound to comply with all directions of the master relating to the discipline of the ship.

920.　The maintenance of the passenger during the voyage is covered by the passage money, unless the contrary is customary or is agreed upon ; in these cases the master is bound to supply a passenger who is in want thereof with provisions at a reasonable price.

921.　Where at the port of departure or during the voyage a passenger does not go on board by the time fixed, the master is not bound to wait for him and the passenger is bound to pay the full passage money.

922.　Where the voyage is abandoned prior to the departure of the ship the following provisions are to be observed :--

923.　Where the voyage is abandoned after the departure of the ship the following provisions are to be observed:--

924.　In the event of delay in the departure of the ship, and irrespective of the cause thereof, a passenger has a right to claim free lodging and, if maintenance is covered by the passage money, to also claim maintenance on board. In the case of considerable delay the passenger may, however, cancel the contract and reclaim the passage money paid in advance. A right to claim damages arises if the delay was occasioned by the fault of the master.

925.　In cases under the preceding Article the passenger cannot cancel the contract if the master, without violating the passenger's contractual rights, offers equally good means of conveyance by ship for the completion of the voyage.

926.　The master is bound to provide for the safety and health of passengers and to keep on board in serviceable condition all necessary aliments, medicaments and life-saving apparatus. When a disaster occurs, his first duty is to save the passengers, and he may under no circumstances leave the ship until this is effected.

927.　In the absence of any contract to the contrary a passenger is not required to pay separately, beyond the passage money, for the conveyance of luggage and effects which he is entitled to bring on board.

928.　Where a passenger dies on board, the master is bound to take proper care on behalf of his heir of the luggage and effects on board of the deceased.

929.　The principles laid down in Sections I and III of this Chapter, and those in Book I, Chapter VIII, Section VIII with the exception of the first clause of Article 523 apply also to the conveyance of passengers treated of in this Section.

953.　Every lawful interest in property exposed to the risks of a sea voyage may be insured for the whole voyage or part thereof, either before its commencement or during its continuance, and either in time of peace or in time of war.

954.　The insurable value of a ship is her value at the time and place of commencement of the risk.

955.　With respect to the ship the risk runs, unless otherwise agreed upon, from the commencement of loading cargo or ballast until discharge thereof has been completed, or could have been completed in the absence of undue delay.

956.　Bottomry and average claims are only insurable up to the value of the mortgaged objects and objects liable to contribution respectively.

957.　Where, subsequent to conclusion of the contract of insurance, war breaks out or risks from other measures of State arise, each party has a right to cancel the contract, unless a proportionate increase of premium was provided for.

958.　The insured is entitled, in the event of the voyage being abandoned before the risk has commenced, to cancel the contract on payment of an indemnity of one half per cent of the sum insured.

959.　The insurer is to bear all losses and damage caused by the happening of a sea risk ; in particular, those occasioned by storm, shipwreck, stranding, floating ice or collision, by jettison, fire, explosion, theft or robbery or pillage, by necessary change of the voyage, route, or ship, by the dishonesty or fault of members of the ship's company and by other like risks, in so far as not excepted by contract.

960.　The insurer does not bear the cost of pilotage, or of towage, the dues, custom duties, and other taxes leviable on ship or cargo, damage due to age, rotting, or worms, the wear and tear of ordinary use, the responsibility of the shipowner for the acts of the master and members of the crew, the damage due to unseaworthiness, to defective equipment or undermanning, or consequent on the absence of the prescribed papers.

961.　The obligation of the damage sustained is not insured being entitled to in respect thereof against insurer to make good the excluded by reason of the a claim for indemnification the master or some other person.

962.　The premium must be proportionately increased in case the voyage is prolonged beyond its stipulated duration ; it is not, however, to be reduced in the event of the duration of the voyage or of the voyage itself being shortened.

963.　The insurance of passage monies entitles the insured to be indemnified the extra cost of conveyance of passengers caused by maritime disaster, such as expenses incurred by prolongation of the voyage, transhipping passengers, their maintenance in a port of distress, forwarding them by another ship, loss or damage to provisions and other mishaps.

964.　Where, in consideration of an increase of the ordinary freight or passage money, the risk attending the goods or passengers' luggage on board is undertaken, the principles governing insurance are to be applied.

965.　Abandonment is the relinquishing to the insurer of the object insured in return for the payment of the full sum insured.

966.　A ship is to be considered as missing if she has not arrived at the port of her destination, and one year or, in the case of the coasting trade, six months have elapsed since she sailed, or since news was last received of her.

967.　A stranded ship cannot be abandoned as unserviceable if she can be got off, repaired, and placed in a condition to continue the voyage as far as the port of her destination, and the insurer advances the money necessary for the purpose. The insured, however, in such case preserves his claim for the expenses and average occasioned by her stranding.

968.　The cargo of a ship which has become unserviceable can only be abandoned if the master is unable to procure another ship for the purpose of transporting such cargo to its port of destination. In the event, however, of the master being able to do this, the insurer bears all average losses, the additional cost of freight, and all expenses of saving, transhipping and storing the cargo, and expenses otherwise occasioned.

969.　The insured is bound to give notice to the insurer of the event entitling him to abandonment within three days of its coming to his knowledge, or of the expiration of the periods in Article 966 specified, and to declare himself within six months with regard thereto.

970.　The insurer is bound, in default of any other contract, to make payment of • the sum insured within three months of the declaration of abandonment, but not before the documents serving to justify the same have been furnished to him, and he has been notified of all other insurance, and of bottomry, or other rights of claim whether registered or not attaching to the object abandoned.

971.　A fraudulent declaration of abandonment deprives the insured of his rights arising out of the insurance, and he must himself pay the claims attaching to the object abandoned.

972.　Abandonment when accepted or declared valid by judgment transfers to the insurer the rights of the insured with regard to the object abandoned.

973.　The insured is bound, even after declaration of abandonment, to exercise all possible care in the saving or recovery of the things insured and for the prevention of further loss, and the insurer must bear the expenses incurred for such purpose to the extent of the value of the things saved.

974.　In the case of capture or of detention by a measure of State, abandonment, unless condemnation or confiscation has earlier ensued, cannot be declared until after six months have elapsed from the communication of such event to the insurer. The insured, in the case of capture, may effect ransom, if necessary, without previous communication of the event, and without the instructions of the insurer ; the insurer, however, has the option of taking over the same on his own account or not.

975.　The effect on both parties of an abandonment once declared is not altered by the subsequent saving or return of the ship.

1023.　All creditors of the bankrupt are deemed to be summoned by the publication of the adjudication rule to notify their rights of claim to the commissioner before expiration of the period for notification. The notification is to contain a statement of the lawful consideration for each right of claim, the amount in money claimed and any rights of preference, and is to be accompanied by the documents of proof, or a copy thereof, annexed.

1024.　The rights of claim notified are to be registered as they arrive under successive numbers in two schedules, of which one contains the rights of claim having the right of preference and the other the ordinary rights of chaim. These schedules are to be kept at the Court for public inspection.

1025.　The hearing for examination of the claims is to be held by the commissioner in presence of the administrator and, if possible, of the bankrupt, and a protocol of the proceedings is to be kept. The creditors can take part thereat in person or by their agent.

1026.　Establishment of the rights of claim takes place by admission or by the judgment of the Court.

1027.　Such disputed rights of claim as are not withdrawn by the creditors concerned are decided by the bankruptcy Court in public hearing, upon the proposition of the commissioner and, as far as possible, in one judgment. The proceedings take place and judgment is pronounced even if the parties should fail to appear, and such judgment is not open to attack by way of protest.

1028.　Judgment must be rendered, if possible, before the meeting of creditors takes place. If this cannot be done, or in the event of the judgment being appealed from, the Court decides by rule whether and for what amount the creditor whose right of claim is disputed is to be admitted to the meeting.

1029.　Creditors whose rights of claim have not been notified in the proper time or have not been established can only participate in such distributions of the assets as take place in consequence of their later establishment ; nevertheless, in the case of the rights of claim which, through having been disputed, have become the subject of litigation as well as in the case of the rights of claim of creditors abroad, for which special periods for notification and examination have been fixed, the dividends falling to them from earlier distributions are reserved.

1030.　A right of claim notified in the bankruptcy of the principal debtor may, even in the event of composition, be enforced in full against sureties or other persons jointly liable with the debtor ; the latter are, however, entitled to notify their claims by way of recourse in the bankruptcy of the principal debtor, but are subject to the operation of the composition in his favour.

1031.　Where two or more persons jointly liable have become bankrupt, the right of claim may be notified to its full amount in the bankruptcy of each of them.

1032.　The following rights of claim are not subject to the provisions respecting the notification and establishment of rights of claim :--

1033.　The costs incurred by the creditors in consequence of their participation in the bankruptcy proceedings cannot be claimed against the estate.

1034.　A wife can only enforce against her husband's estate such rights of claim as she is entitled to in respect of property which is exclusively her own either by law, under express agreement, or by undisputed custom.

1035.　Meetings of creditors are convened by the commissioner and presided over by him. The convening is effected by means of a public notice stating the objects of the meeting.

1036.　Resolutions are, as a rule, passed by a majority of votes of the creditors present, and such majority of votes must represent more than one half in amount of the rights of claim of such creditors.

1037.　At the meeting the commissioner reports upon the course of the proceedings as far as they have gone ; the administrator reports upon the operations and results of the administration and upon the actual condition of the estate.