COMMERCIAL LAW IN GENERAL.

BY THEOPHILUS PARSONS, LL. D.*

PROFESSOR OF LAW IN THE UNIVERSITY AT CAMBRIDGE.

ALL law is divided into what is called, in law-books, common law and statute law. We have legislatures, and our fathers had them; and a very large proportion of the laws now binding upon us were made by those legislatures in a formal and regular way. All these are Statutes; and taken altogether, they compose the Statute Law. Beside this, however, there is another very large portion of our law which was not enacted by our legislatures; and it is called the Common Law. In fewer words, all law was regularly enacted, or it was not. If it was, it is statute law; if it was not so enacted, it is common law.

The common law of this country consists, in the first place, of all the law of England-whether statute or common there-which was in force in this country at the time of our independence, and recognized by our courts, and which has not since been repealed or disused. And next, of all those universal usages, and all those inferences from, or applications of, established law, which courts in this country have recognized as having among us the force of law. For this common law there is no authority excepting the decisions of the courts; and we have no certain means of knowing what is or is not a part of the common law, excepting by looking for it in those decisions. Hence the value and importance of the reported decisions, which are published by official reporters in most of our States.

The courts are judicial bodies, and not legislative; that is, they are bound to declare and define and apply the law, but have no power to make it. And some have called the common law "judge-made law," as if the courts had exceeded their powers, and violated their duties, in thus "making” common law. But the objection is not a wise one; for the very necessity of a court springs from the constant need of a tribunal competent to determine what the law is; and if the determination of this tribunal has not the force of law, it would be of no use. The legislature can always, by a statute, amend, annul, or adopt any rule of common law.

It is very important, however, that our common law should be as fixed and as definite as possible; and that is the reason, not only why nearly all decided cases are now reported and printed, but why a case once decided

* Probably our readers (at least the legal portion of them,) are well acquainted with the writings of Prof. PARSONS. His treatises on the "Law of Contracts," "Laws of Business for Business Men," "Elements of Mercantile Law," "Law of Bills and Notes," and the Law and Practice of Admiralty," are standard works, alike noted for their clearness, precision, and accuracy. Prof. PARSONS seems also to be able to state the principles and rules of law in such a manner as to make what he says interesting and intelligible to every one. No legal education is required to understand what he writes for merchants and other business men. We therefore doubt not that our readers will find great pleasure, as well as benefit, in not only reading, but studying every thing from his pen that we may be able to publish.—Ed. Merchants' Magazine,

becomes a precedent and almost a law for all of like kind that follow. We say almost a law, for a court may make a mistake, and other courts should not be bound by it, but have the power of substituting the true doctrine. And the changes in society and in the course of business make some changes in the law necessary. Hence, however desirable stability may be, some fluctuation is inevitable. And hence the law under which we live changes from time to time, merely by the action of the courts, without the same public and authentic notice as when a new law is passed.

For example, we have in Massachusetts, as in most of the States, a statute copied substantially from an English statute, prohibiting unnecessary work or labor on Sunday. In 1813 the Supreme Court of Massachusetts held, that if a man signed a note or deed on Sunday, without sufficient cause, he was liable to punishment for this violation of law, but the instrument was valid. So the law remained until 1847. In that year the court decided that no instrument could be valid which was made in violation of law, and therefore that such a note or deed would be void. This is now the law in Massachusetts, as it is the prevailing rule elsewhere. We have from this cause not only changes of the law, but uncertainties. In part, because questions occur in practice about which lawyers differ, and must differ, until the courts settle them; but also because different courts at the same time, or the same courts at different times, decide them in different ways.

There are still some uncertainties of this kind in the laws of business. A person not a lawyer is sometimes surprised to be told that no certain answer can be given to the question he asks; and it is generally so much safer for the lawyer to say anything else but this-for the uncertainty will often be attributed to his ignorance-that he is sometime induced to give as law what is only his opinion. In what I have written or published I have endeavored never to do this, and never to avoid the danger of seeming ignorant, by concealing such uncertainties. Wherever they came in my way, and seemed necessary to a full exposition of the law on any given topic, I have stated them distinctly; and wherever I thought I had sufficient grounds for a decided opinion, I have expressed it, but only as my opinion.

A very important part of the common law, especially to all men in business, is what is called, by an ancient phrase, the Law-Merchant. By this is meant the law of merchants; or, more accurately, the law of mercantile transactions; and by this again is meant all that branch of the law, and all those principles and rules, which govern mercantile transactions of any kind. This great department of the law derives it force in part from statutory enactinents, but in far greater part from the well established usages of merchants, which have been adopted, sanctioned, and confirmed by the courts. For example, a large proportion of the law of factors and brokers, most of that of shipping and of insurance, and nearly all the peculiar rules applicable to negotiable paper (or promissory notes and bills of exchange payable to order,) belong distinctly to the Law-Merchant.

The courts of this country have always acknowledged that a custom of merchants, if it were proved to be so nearly universal and so long established that it must be considered that all merchants know it and make their bargains with reference to it, constitutes a part of the law-merchant. And the law merchant is itself a part of the common law, and therefore has the whole obligatory force of law. This would not be true, if the custom was one which violated statute law, or the obvious principles of public policy or

common honesty. But we may suppose that no custom of this kind would ever be so generally adopted and established as to come before the courts with any claim for recognition as law.

There is another distinction which should also be understood. It is that between, Courts of Law and Courts of Equity. In England this distinction is very great; it is less in this country, and appears to be growing still less. In most of our States the same courts sit at one time as courts of law, and at others as courts of equity. But different arrangements on this point prevail in different parts of the country.

It would require a volume, and a large one too, to state with any clearness all the differences between these courts. Here we would say only, first, that actions may be brought in equity courts, mainly, in the four cases of fraud, accident, mistake, and trust; and secondly, that while courts of law can only give compensation in money for damages, courts of equity compel the delinquent party to perform specifically the very thing he ought to do. Thus, if a policy of insurance was made, either by fraud or accident or mistake, different from what the parties agreed that it should be, the law could do nothing, unless an injured party could prove damages of a certain kind, and these he might recover. But a court of equity would rectify the error, and order the policy made as it should be made. So if the owner of land agreed in writing to sell it upon certain terms, and afterwards refused to sell it, law could only give damages, but equity could and would compel the owner to make a proper deed of the land.

The difference between the powers and remedies of courts of law and those of courts of equity is sometimes important in reference to mere business transactions, or to the laws of business. Sometimes we speak of courts of law and courts of equity; and sometimes, using the shorter and usual phrase of law-books, say only that law will do this, and equity do that; but by law is meant law as administered by courts, and by equity the equity administered by courts. And all courts of equity have now rules of jurisdiction and of practice about as exact and rigorous as those of courts of law; although differing almost wholly from them.

A great deal of the language of every art or science or profession is technical, (indeed, technical means belonging to some art,) and is peculiar to it, and may not be understood by those who do not pursue the business to which it belongs. This is as true of law as of everything else. I shall, however, avoid as far as possible mere law-words; and when I use them shall explain them at the time. There are some, however, which cannot be dropped; they express exactly what is meant, and we cannot express it without them, unless by long and awkward sentences. A good instance of this is in those words which end in er (or or) and in ee. As for example, promisor or promisee, vendor and vendee, indorser and indorsee. These terminations are derived from the Norman French, which was, for a long time, the language of the courts and of the law in England. And it might seem that we had just as good terminations in English, in er and ed, which mean the same thing. But it is not so. Originally they meant the same thing, but they do not now; for both er and ee are applied in law to persons, and ed to things; so that we want all three terminations. For example, indorser means the man who indorses; indorsee means the man to whom the indorsement is made; but the note itself we say is indorsed. So vendor means the man who sells, vendee means the man to whom something is sold, and the thing sold is vended. And the promiser makes the

promise, the promisee receives it, and the thing to be done is promised. The phrase "presumption of law" will be sometimes met with. This means, that in certain cases, and upon certain facts, the law presumes without proof that the parties did so and so, or intended so and so.

There are a great many presumptions of law; indeed, something of this kind occurs in every case. Thus, if anybody is charged with crime or wrong, the presumption of law is that he is innocent. If one makes a promissory note without any time expressed for payment, the presumption of law is that the money is payable on demand If there be a sale, and no delay agreed on as to delivery of the thing sold, or the payment for it, the presumption of law is that the thing sold is to be delivered at once, and that payment is to be made at once. Of these presumptions a few are absolute, that is, the law will not receive any evidence to the contrary; but most of them— especially in mercantile transactions-are open to evidence, and may be removed by sufficient proof.

It will be noticed, also, that some questions are spoken of as "questions of fact," and others as "questions of law." This distinction is occasionally' important in cases which arise in business. The rule is, that a court must not undertake to decide a question of fact, because this is within the exclusive province of the jury. But the court alone must decide all questions of law, and the jury are bound to take and apply the law as it is given them by the court. Thus, if goods are sold to an infant, (by which the law means a minor,) and he refuses to pay for them, the question comes up whether they were necessaries; for if they were, the infant is bound to pay for them. This question resolves itself into two. One is the question of law, what kind of things the law means by "necessaries" when it says the infant must pay for them; and this the court alone decid›, and instruct the jury accordingly. The other is, are the things sold such as the court say the law considers necessaries? and this the jury alone decides. These questions sometimes run together; and juries often undertake to settle the law as well as the fact; but they have no right to do so. Judges are selected from the most learned of the profession, and paid by the people to be their lawyers ; that is, to secure for the people the intelligent construction and application of the laws which the people have made by their representatives to protect themselves. And the question whether the jury or the judge shall determine the law, is only the question whether the people wish to have their own laws construed and applied by those who are most able to do this properly, or by those who are less able.

Another phrase often met with is "the burden of proof." The law means by this the duty or necessity of proving what one asserts; and it is often very important to ascertain on whom this duty or burden rests. Thus, if A sues B for the price of goods sold, and A says he sold them to B, and B says he never bought them of A, B has nothing to do until A proves the sale; for the burden of proof is on him. The general rule is, that whoever asserts an affirmative must prove it, and he who only denies need not prove it. One reason for this is obvious. It must be far easier for a man to prove that he did a certain thing, (for any one who saw it is a sufficient witness,) than for another man to prove that he did not do a certain thing; for if ten thousand people did not see him, this does not prove it, for perhaps somebody else did see him.

The burden of proof sometimes shifts back and forth in a case. If A sues B on a note, B does nothing until A discharges the burden of proof

by showing that B signed it. Then the burden of proof is on B, if he says he paid it; and if B proves that on a certain day he gave A certain money or goods in payment, he discharges his burden of proof, and it then shifts on A, and, if he still denies the payment, he must prove that the money was counterfeit, or the goods worthless, or some other similar fact, which shows that there was no payment in fact.

Another word is in frequent use in the law-merchant. It is "lien." This is a Norman French word, and literally means a tie, a bond, or connection. It is used in law to signify the right which a party has over a thing in his possession, to keep it until his charge upon it, or arising out of it, is paid. Thus, if a wharfinger or warehouseman stores goods, or a common carrier carries them, he is not bound to deliver them up until the storage or carriage is paid for, because he has a lien on the goods for these charges, and by virtue of the lien may keep them until these charges are paid.

There is still another word which occurs so often that it may be well to explain it. It is "assets;" thus lawyers and law-books speak of the assets of an heir, or an executor, administrator, trustee, or assignee. This word means all the property, and valuable interests of every kind, which belong to any fund, and are available for the charges to which that fund is appropriated. Thus, to say that such a thing is "assets" in the hands of the assignee of a bankrupt, is to say that he is entitled to it as a part of his fund, and must realize or collect or reduce it to money as well as he can, and divide it among the creditors.

THE DEBT OF THE UNITED STATES APRIL 1, 1863.

[From the Washington Chronicle.]

The statement given below of the amount and character of the public debt is authentic. More than a year ago some patriotic alarmists startled the country by the announcement that our public debt had already amounted to a thousand millions, and that it was increasing at a rate that would in another year render us completely bankrupt. Now, just two years after the breaking out of the rebellion, we find that our debt is only nine hundred and twenty-three millions, less than one-half what the croakers predicted. It is less than one-half the debt of France, less than one-fourth the debt of England, less by nearly five hundred millions than the debt of Russia, less by a quarter of a million than the debt of poor, poverty-stricken Austria. This does not look very much like bankruptcy, nor like abandoning the war for the want of resources. On the contrary, the facts all go to prove that we are the richest and most powerful people on the face of the earth:

STATEMENT OF THE PUBLIC DEBT UP TO APRIL 1.