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A Working Manual of Every-day Law



Of the New York Bar; Author of "Corporate Organization
and Management," "The Modern Corporation," etc.

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Third Printing


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Law and order are the necessary foundations for civilized life. A pastoral people with few possessions needs few and simple laws. A populous, modern state with complex social, industrial, and commercial relations requires intricate and farreaching regulations. In this country the latter condition prevails, and our present legal system has not kept pace with our perhaps too rapid progress in other ways.

Our system of laws is an inheritance from our AngloSaxon ancestors, supplemented by written constitutions and multitudinous legislative enactments. Much of our law is judge-made. Like our forebears, we revere precedents and decisions and have more of this kind of law than we know how to use. We have our federal courts and forty-eight separate state systems, all grinding out innumerable volumes of reports. In consequence, this source of law has become cumbersome and somewhat unmanageable. Beyond this we are subject to the Constitution of the United States with its eighteen amendments, as well as the constitutions of our individual states; to the enactments of Congress and to those of our state legislatures; to the ordinances of boards of aldermen; to the regulations of boards of health and education; and to the orders of many other boards, bureaus, commissions, and officials. With the multiplicity of regulation that all this entails, it requires no small amount of care and study to avoid unwitting entanglement in the far-extended meshes of the law.

Yet from this unwieldy mass of law may be elicited certain guiding principles that everyone should know—general rules that will guide us safely past most of the difficult places. Knowing these, it is possible for a man so to shape his business course and his relations with his fellows as to have little to do with courts or lawyers. Courts and lawyers are necessary institutions—so are doctors and hospitals—but all of us prefer to avoid both so far as possible and so long as possible.

It is the admirable theory of the law to secure right and justice to all men. The practical application of the law through the courts, however, does not always attain these ends. Some reasons for this are set forth in the following pages. Also suggestions are given as to how one may shape his conduct and manage his affairs in order to avoid the more serious legal difficulties. The man or woman who owns property, who does business and engages in affairs, should know the principles upon which our law is based, should know how to apply these principles to the more usual happenings, and should know when and how to employ "counsel learned in the law." The advice here given is, as near as may be, such as would be given by a conscientious lawyer who desired to keep his clients out of the courts, rather than to win cases. All men should know some law, and it is devoutly to be hoped that the day will come when even those who write romances and photo-plays will know enough law to avoid the preposterous legal situations that cause so much trouble to their heroes and heroines.

To adapt the book better to the needs of those intending to become professional accountants, the CP.A. examinations of the various states for the past five years have been examined and, where necessary, the text has been expanded to cover all the more important questions. Many of the questions given in these examinations refer purely to local statutes, and answers must be found in the laws of the state in which the examination is held. In such cases the fact has been indicated. Other questions, outside the scope of this work, are apparently brought in by the examiners for the purpose of keeping qualified students from receiving the CP.A. degree. This seems a hard thing to say but The Journal of Accountancy for October, 1919, expresses editorially the same opinion:

Apparently some state boards in the past have been chiefly concerned with an effort to convince the public of their innate cleverness. They have presented questions which it would be ridiculous to expect a candidate to answer without reference to authorities, and as a result they have excluded many men fully qualified to practice as public accountants. Out of this condition has grown the quite frequent allegation that accountants are trying to build up a close corporation by preventing newcomers.

To assist students of business law, questions have been appended to each chapter. Some of these have been taken from C.P.A. examinations, some are intended to provoke inquiry rather than direct answers, and others are the usual type of review questions.

The author desires to acknowledge his indebtedness to Elizabeth A. Smart of the New York Bar for her valued collaboration on the first edition of this work; to W. J. Grange, of the New York Bar, for careful reading and helpful comment; to P. W. Pinkerton, of Indianapolis, for his many excellent suggestions and improvements in the text; to James H. Wilhoit, of the New York Bar, for assistance in preparing the chapter on bills of exchange; and to Katharine S. Keane, for careful and intelligent research in connection with the preparation of this edition and for good work in the compilation of the index.

The author desires also to extend his thanks to, and testify his appreciation of, all those interested readers throughout the country who by their questions and comments on the original text have enabled him to make the present edition more accurate and comprehensive than would otherwise have

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