BURGESS' COMMERCIAL LAW CHAPTER I KINDS OF LAW 1. Law is a rule of action or conduct, prescribed by an authority able to enforce its will. Law is in its nature a command. The head of the family, who in the most ancient times regulated its encampments and employments, was among the first of "law-givers," and his directions, being the orders given by one who had power to enforce them, were the earliest "laws." If his laws were not observed he provided a suitable penalty, and his power to inflict the penalty gave him indirectly the power to enforce the law. 2. The Object of Law is to protect persons in the enjoyment of their rights and to punish others who interfere with these rights. The rules of action or conduct, of which law consists, define, limit, and protect the rights of the individual living in organized society. A person of suitable age has a right to attend a public school, because the law declares that he may do so. His father has a right to vote for public officers, because the law has given him this right. Each person has thousands of these law-given rights. He has among other things, the right to life, the right to liberty, the right to marry, the right to acquire property, and the right to make contracts. Each time that the law declares that one person may have certain rights by conforming to certain standards, it likewise declares that other persons must respect these rights. The object of law being therefore to define rights and to protect persons in their enjoyment of these rights, it is essential that our inquiry be directed in every instance, not only to determining what the law is, but to discovering the individual's rights and duties in respect to the law. 3. Municipal Law* is that body of rules which govern the conduct of the individual, prescribed by the supreme power in the state, commanding that which is right and prohibiting that which is wrong. If the law-giving authority is the state, then the rule which it prescribes is termed "municipal" law. The word "municipal" is a survival of the language of ancient times when the city (municipality) was the supreme power, as were Athens and Rome. In modern times the term is applied also to laws prescribed by nations and independent states, as England, the United States, Illinois, or Texas. That municipal law is necessary to the existence of a state, or other government, is seen when one realizes that without laws the state could not be kept together. It would be only an unorganized mass of individuals. In such unorganized society there would be present a tendency on the part of 'some individuals to be unjust to others. In order to protect itself, and to protect the individual, society must group itself into units, or states, with power to create and enforce municipal laws. 4. Extent of Laws. Each unit, which may be either a nation or the sub-division of a nation, must have its own laws governing the conduct and property of individuals within its boundaries. It follows that the laws created by a unit of society can be enforced only within its boundaries, and have no application to persons residing in other units, except when they come within its boundaries to reside or to transact business. 5. Kinds of Municipal Law. In our own country there are three kinds of municipal law, namely, (1) Constitutional Law, (2) Statute Law, and (3) Common Law. They are here stated in the order in which they have precedence when they conflict. 6. Constitutional Law is that body of laws which enumerates the rights and limitations of the government, the mode of * The terms "Natural" and "Moral" Law are frequently employed, but the use of the word "law" in such connection is with a meaning different from that in which it is used in this text. A discussion of International Law is also omitted from the text for the reason that its source, manner of enforcement and rules are of little value to the business man or to his correct understanding of the principles of commercial law. †The term "State" must not be understood to be restricted to one of the political units of the United States, but to have that broader meaning that includes any political body of people who are united under one government, whatever the form of it may be. exercising those rights, and the relation of the sovereign state to the citizen. In the United States there is a divided sovereignty. When the original states met to form the Union, they voluntarily surrendered some of their rights to the Federal government, keeping the remainder to themselves. In the Federal constitution, which they formed, they enumerated the powers which the new Federal government should have, and strictly limited it to these specified powers. The powers and rights which were not expressly delegated to the Federal government in this Federal constitution were reserved to the states. Each state also has a constitution which represents the will of the people of the state, declaring and limiting the powers of the state toward its citizens. 7. Statute Law is that body of rules of conduct and action enacted by the legislative body of a state or nation, by virtue of the powers given in the constitution. These usually take the form of defining the rights and duties of persons toward each other and toward the state. When it is desired that new rights and duties should be defined and created, a bill is presented before the legislative body. If it is adopted by the legislative body and approved by the executive officer of the unit of government, the bill becomes a statute and is binding on all persons within the boundaries of the unit declaring it. Thus if the Federal government desires to create a law regulating train service between two states, a bill to this effect may be passed by the U. S. Congress. When approved by the President the bill becomes a new Federal statute, which will then be binding on the railroads. Or if a state desires to regulate the sale of cigarettes within its boundaries, a bill to this effect may be passed by the state legislature. When approved by the governor the bill becomes a state statute, which will be binding on all persons within the state. 8. Common Law. Not all rights and duties as between individuals have been defined by either state or Federal statutes. When no statute exists so defining these rights and duties on a particular subject, a body of rules of conduct and action known as the common law applies. This common law is also called the unwritten law, because it is not formally expressed as is statute law. It is found in the reported decisions of the courts. It came into existence at an early day when English courts were frequently called upon to decide disputes about matters which were not covered by statutes. The courts decided these matters on principles of justice, and when a similar case again came before the court, it decided this in the same way that the previous case had been decided. The policy was thus established of looking back to see how former disputes of a similar nature had been decided, and when a decision was found on a similar point it was called a precedent. The general body of the common law consists of these precedents. The following will show how the different states adopted the English law. "That the common law of England so far as the same is applicable and of a general nature, and all statutes or acts of the British parliament made in aid of, and to supply the defects of the common law, prior to the fourth year of James the First, and which are of a general nature and not local to that kingdom, shall be the rule of decision, and shall be considered as of full force until repealed by legislative authority."— Act of the General Convention of Delegates of the Colony of Virginia, held at Williamsburg, Monday, May 6, 1776. Similar statutes have been passed by most if not all of the states except Louisiana, which being colonized by the French adopted the system of law in vogue in France, known as the Civil Law.* 9. Order of Precedence. The Federal constitution consists of an enumeration of certain rights and powers relinquished by the states to the general government; it is, therefore, the supreme law of the land in regard to all matters contained in it. The Federal statutes, being made in strict accordance with the constitution, must necessarily come next in order. The states, as we have seen, reserve to themselves supreme authority on many questions; they have also placed numerous restrictions upon their own government. In regard to all these matters the state constitutions of the several states are supreme in authority. State statutes made in accordance with the state constitution are next in authority. The common law applies when there is no constitutional law or statutory law which will apply. When there is a conflict between a statute and the common law, the statute takes precedence. * The term Civil Law as employed in this connection is used only in the sense of distinguishing it from the Common Law of England. Since the common law is in force wherever there is no statute upon a subject, it supplies what in many cases would be a great deficiency in our statute law. No legislature could possibly foresee and provide for all the possible contingencies and difficulties that could, and do, arise in the business relations of a complex civilization. 10. Courts. Their Function. Not only has organized society adopted a body of rules of action and conduct, but it has provided a means by which these rules can be enforced. The organized instrumentalities for interpreting and enforcing laws are called courts. A court has three functions. These are, (1) to decide in case of dispute what the law is, (2) to punish persons who violate the law, and (3) to compel one person to render justice to another. Federal statutes are usually enforced by Federal courts only, which courts also decide matters arising under the Federal constitution, and disputes between citizens of different states. State courts enforce the state statutes, decide questions arising under the state constitution, and interpret and enforce the common law in cases that come under the jurisdiction of the state. In the present text we shall study only questions of civil law as distinguished from criminal law. Criminal law defines, and provides penalties for, offenses against the state and society at large; civil law regulates the conduct of individuals towards each other. Both are often enforced by the same courts. We shall treat of the courts as deciding the questions which may arise between business men, but the student must bear in mind that the courts of the present do not make the law that is the function of the legislative branch of our government. Courts merely interpret and enforce the law A suit at law is the method by which a dispute over legal rights and duties is brought before the court. It is the method by which one person, who believes his rights to have been violated by another, may compel the latter to come before the court to have decision made in the matter. If it be decided that a right has been violated, the person who has been injured is given an appropriate remedy. The term suit at law is sometimes used in a more restricted sense as distinguished from a suit in equity. The word equity means justice. Equity courts are special courts to which are |