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the British Islands. Unlike admiralty and equity, it was for centuries a sort of tolerated outlaw, living only as the merchants
could keep it alive in those self-governing and selfLaw merchant a tolerated out- supporting tribunals of theirs called the pie-powder
or dusty-foot courts,' and carrying out its judge ments only by pressure upon those who came within its extralegal jurisdiction. But it lived in England as elsewhere upon the vital principle of determined usage in business, and hence was not foredoomed to die.
The time came when it must take its place, even if piecemeal, by the side of the common law, and of admiralty and Admitted to
equity, in the jurisprudence of England. With English juris- sound credentials in hand, it knocked for admisprudence.
sion; but it knocked at the gates, not of its ancient kinsmen equity or admiralty, but of the common law which claimed the land. It is a curious question what might have happened had the gates not opened. Admiralty had already been exercising jurisdiction over instruments in the nature of bills of exchange and promissory notes pertaining to contracts in the commerce of the high seas; ? and there was not
1 See Scrutton, Mercantile Law, chapters 1, 2.
2 In the first third of the 16th century Admiralty was taking jurisdiction as of course of the enforcement of such instruments as the following:
Exhibited in the High Court of Admiralty of England on the 3d of March, 1533.
Be it known to all men that I Thomas Thorne haberdasher of London have taken up by exchange of Thomas Fuller merchaunt of the staple of Callys the sum of Ix pounds sterling the which sum of thre skore pounds sterling to be payd to the said Thomas Fuller or to the brynger of this byll in manner and forme foloynge that is to wyte the xxiiij daye of August next after the date of this byll to pay xxx pounds sterling and the xx day of September next foloyng to pay other xxx pounds sterling to the which pay. ments well and truly to be payd to the sayd Thomas Fuller or to the brynger hereof at the days before wrytten I the said Thomas Thorne hynd me myne ayres executors and assignes and all my goods In wytnes whereof I the sayd Thomas Thorne have wrytten this byll wythe myne owne hand subscrybyd my name and sett to my seale the xviij daye of Aprill anno mvRxxviijth
per me Thomas THORN Fuller v. Thorne, Select Pleas in the Court of Admir Selden Society, p. 41. As to the proceedings and judgment in the case see id. p. 179. There
wanting intimation that the Chancellor of England might be ready to receive the new applicant. Had the Admiralty gecured its hold, or Chancery acquired general jurisdiction over our subject, or had the custom been adopted as it was, with its own courts and powers, it is certain that the law of bills and notes would not have been what it is. The doctrine of consideration, of joint contracts, and other things foreign to law merchant, would hardly have appeared.
But the custom applied for admission at the hands of common lawyers, to common law judges, at the common law courts; and the applicant could not hope for success pt by
In the garb of putting on the common law garb. Fictions were the common accordingly resorted to in the pleadings, by which law : fictions. it was made to seem that the custom was after all nothing but a sister of the common law. Suit was brought in assumpsit, upon a foreign bill of exchange, alleging in effect, by a fiction of factorage or agency, that the defendant, acceptor of the bill, had, at the hands of his foreign factor, received money from the plaintiff, in consideration whereof he now, in accepting the bill drawn by his factor for the purpose, promised to repay the same.? Here were both consideration and privity of contract, of the common law. The courts winked at the allegations, accepted the fictions as not to be traversed, and called for proof only of what was left.
Thus foreign bills of exchange, received into the law on their own feigned likeness to simple contract, were brought within
are other interesting cases of the kind in the same volume. Gale v. Browne, id. p. 55, a "byll’in sets, in which Browne acknowledges that I owe unto you Thomas Gale haberdasher of London « pounds x sh. The which ... I promise . . . to pay unto the sayd Thomas Galle or to his assigns within Ix dais after the save aryving of the said good shipe into the ryver of Temys,' ete. A. D. 1536. Hurste v. Barnyes, id. p. 72, bill obligatory,' prom. ising to pay to Barnyes 'or John Flowde or any of your (Barnyes') assygnes.' A. D. 1538.
See Dunlop v. Silver, 1 Cranch, 367; Cases, 1, at p. 3. 3 Rastell's Entries, 10 (1st ed. anno 1564) ; Dunlop v. Silver, 1 Cranch 367; Cases, 1, 3, 5.
• Cases, 6.
the jurisdiction of judges at that time educated, not in the law merchant, but in the common law only, with all which that fact
implies; and in the hands of the common law In hands of common law judges they have always remained. Inland bills judges.
followed and took their place in the same manner. Promissory notes met energetic opposition from the common law judges, especially from Lord Holt, but were at last admitted, on the footing of inland bills, by an Act of Parliament in the reign of Queen Anne. Cheques followed in due course." And all, like foreign bills, fell into the hands of the common law judges, and have there remained.
Why the law merchant, or rather the custom of merchants, applied for admission into the English law is plain. It was not The custom
because it was defective in principles and needed to adequate, but needed a
be supplemented by another system of law; it was sheriff. a complete and adequate body of custom, which by long use had proved itself equal to its purpose, so far as its contents were concerned. What the custom of merchants wanted, what it asked for in seeking admission to the law, was a sheriff; and that only. Its customers were becoming refractory; pressure was not enough to compel them; the arm of the law was needed to enforce its judgments.
This then is the cardinal fact, that the custom did not need or want the common law. But the custom fell into the hands How common of the common law judges, and the natural result law judges
followed — the judges took every opportunity to treated law merchant.
assimilate the subject to the common law; with the result, not always to the advantage of the law merchant, that the newer law bears many marks of the common law. The fact has not been steadily kept in view, that the law merchant is only a legalized body of custom, fully developed, and to be administered in sound theory accordingly. In sound theory the appeal, in a disputed case, should be to the custom, or the law as the
1 Clerke v. Martin, Ames, Cases on Bills and Notes, ii. 525 ; Dunlop v. Silver, Cases, at pp. 9, 10.
? 3 & 4 Anne, c. 9, anno 1704.
embodiment of the custom; in default of custom or law, the dispute should be decided upon legal, not necessarily common law, reasoning consistent with law merchant.
As a matter of fact the appeal, in cases in which neither custom nor law is plain, has generally been to the common law. The result has been proper enough in most cases, as for instance in the very common and important matter of interpretation. But it has not always been so in other matters ; perhaps not always in interpretation.
In some cases the original custom, after generations of time, has been forgotten if it was ever known by the common lawyers, and some doctrine of the common law, plainly con- Custom sometrary to it, has been fastened
times forgotthe law merchant. upon
ten: joint The doctrine of joint contract, with its refinements, contract. is an instance, and an instance which has worked serious harm to the law merchant. By the custom, as by the modern law merchant on the Continent, joint parties to contract, such as partners, were not merely liable individually after judgment against them jointly, but (as should be true because they were ultimately liable individually on the judgment) they were suable individually. But this rule of the custom was set aside, probably in ignorance that it had ever existed, for the narrow technical rule of the common law, adopted on reasoning peculiar to that law, whereby the joint parties were treated as an indivisible body. By the first-named rule each party could be sued separately, until satisfaction; by the second one suit only (with certain exceptions) was possible, though it was not brought against all.
Another instance of the kind may be seen where in some States an actual piece of existing custom has been overturned by applying (doubtful) common law doctrine to the
Parol evidence The instance referred to is the application rule applied to
law merchant. of the so-called parol evidence rule of the common law (which excludes contemporaneous parol evidence to vary the terms of a written contract) to blank indorsement of a negotia
1 See Bigelow, Estoppel, 104-111, 5th ed.
ble instrument. It is said, where the notion prevails, that the indorsement, being blank, is not a written contract, and hence that the rule does not apply; it may be shown accordingly that the understanding of the parties to the indorsement was that it was not to create liability. This quite overlooks the fact that the law merchant has its own way of exempting indorsers (and others) from liability, and that is, by writing appropriate words of exemption, such as Without recourse,' in connection with the signature. This, it is believed, is the only way known to the law merchant of exempting a party to the instrument from liability.
Other instances of the kind might be given; but these will suffice. The mischief of them lies in the mistaken notion imMischief of re- plied, that the law merchant is a sort of poor sorting to com- relation of the common law, or rather that it is a merchant not a dependent of the common law, subject to it wherdependent.
ever its own language is not plain. Such instances, in other words, overlook the fact that the law merchant is an independent, parallel system of law, like equity or admiralty. The law merchant is not even a modification of the common law; it occupies a field over which the common law does not and never did extend.
But the notion of the generality of the common law is abroad; so much so that it has been asserted that there is Law merchant nothing peculiar even in that most essential docby estoppel. trine of the law merchant by which equities are cut off. This, it is said, is no more than estoppel by the general' law. The suggestion would hardly have met with favor in the time of Lord Holt ; he and those before him looked upon the custom as something extremely hostile to the common law of England. If in reply it be said that the estoppel referred to is of comparatively recent origin, as it is, the result will only
1 Espy v. Ross, 66 Penn. St. 481 ; Harrison v. McKim, 18 Iowa, 485 ; Rogers v. Bedell, 97 Tenn. 240 ; United States Bank r. Geer, 55 Neb. 462.
See an article in the Law Quarterly Review, for April, 1900, on Negotiability and Estoppel, by John S. Ewart, Q. C. Further see infra.