CALIFORNIA

COMMERCIAL LAW

LAW IN GENERAL

Definition. In a general sense the law with which we are concerned is a rule of action or conduct prescribed by the supreme governing authority, commanding that which is right and prohibiting that which is wrong. The laws of nature, or scientific laws, are entirely outside the scope of this book. From the standpoint of business or commerce, law may be defined as the system of principles and rules which relate to the actions of men in their dealings and relations with one another.

The supreme authority is any organized form of government. The legislative department of the national government makes laws for the people of the United States. The legislative department of each state does the same for the people of the state; counties, cities, villages, and towns likewise have legislative departments which make laws or regulations for the people. All these legislative departments lay down many rules or laws for the guidance of all within their jurisdictions or boundaries.

There must be no conflict of authority. No state can make a law which conflicts with the Constitution or statute laws of the United States. Nor can a county, city, or town make regulations which conflict with the laws of the state in which it is located.

Origin of Law. There has been some form of law or rule of action" from the earliest time. An individual isolated from others in an uninhabited region might be said to be without law, but as soon as any number of human beings are associated together, rules and customs become recognized in the regulation of their rights and soon have the force of law.

In the time of the nomadic tribes the chief dictated many of the laws by which his people were governed. In later times kings made many laws. To-day laws for the most part are made by representatives elected by the people to the different lawmaking or legislative bodies.

AW

The less civilized people of early times needed few laws, but the highly organized state of society at the present time requires many laws.

Law Classified.-Law may be classified as moral, international, and municipal.

Moral Law. The code of ethics which prescribes the right and wrong in the conduct of one toward another is called the moral law. Its rules are enforced by the sentiment of the people derived from their belief in, and understanding of, right and wrong. It is moral law that tells us to deal honestly, to speak truthfully, and not to take advantage of any one.

It is necessary, sometimes, to make a distinction between what is morally right and legally right, or morally wrong and legally wrong. For example, a man is morally but not legally bound to support a dependent parent. The rules of law tend to represent the collective moral sense of the community, but they rarely reflect that sense in its entirety, because lawmaking bodies do not usually act as rapidly as morals are developed, being held back by the force of precedent and the necessity for avoiding numerous and sudden changes in law. There are many legal rules which have no moral quality, but are based on the necessity for having some rule, e.g. the rule requiring vehicles to pass to the right. A legal right can be enforced at law, while a moral right which does not amount to a legal right cannot be enforced.

International Law. The law which regulates the intercourse of nations is international law. It consists of rules and principles founded on customs, treaties, the weight of opinion as to justice, and the mutual obligations which civilized nations recognize as binding upon them in their dealings with other nations. The conduct of the vessels of different nations toward one another on the high seas, which are open to all, is a question of international law, as are the rights and protection of representatives of one country within the boundary of another.

Municipal Law. The rules of action prescribed by the supreme power in a state or nation, or a subdivision of a state or nation, commanding what is to be done and prohibiting what is not to be done, constitute municipal law.

Every state or nation must have some head or supreme

power, and in a republic like ours this power rests in the people and is administered by the officers whom they elect. The laws are made by the legislators, administered by the executive department of the government, and interpreted by the courts which apply these laws to the cases that are brought before them.

It is necessary in civilized nations that the conduct of man in relation with his brother man be regulated and restricted. Otherwise a resort to arms would be the only redress for a wrong. So it is that municipal law is required in order to insure justice and harmony. Because of this branch of the law contracts can be enforced, possession of real property acquired by its true owner, and crimes punished.

Municipal Law Classified. Municipal law can be classified as constitutional law, statute law, and common law and equity. Constitutional Law. Every nation or state has a constitution, either written or unwritten, under which the nation exists and which as the basis of its power regulates, distributes, and limits its different functions and departments. The law embodied in these constitutions, especially as applying to the establishment, powers, and limitations of the government, is known as constitutional law. The United States Constitution provides that no person shall be deprived of life, liberty, or property without due process of law. This limitation of governmental powers is a provision of constitutional law.

Statute Law.A statute law is a law made by a legislative body. The laws passed by Congress or by a state legislature and the ordinances passed by a city council or board of aldermen are all statute laws. In this class also come laws proposed by initiative petitions and adopted by vote of the people.

The law that is embodied in constitutions, in acts of Congress, in acts of state legislatures and all other legislative bodies, and in acts adopted by vote of the people, is known as the “written law." The modern tendency is to reduce all rules of law to written law, generally displacing the unwritten rules of common law and equity.

Common Law and Equity. The great body of municipal law in early English practice was known as the common law

and consisted originally only of customs. These, however, because of long usage, came in time to have the force of laws. As the affairs of a growing commercial country became more intricate, the hard and fast rules of common law which were firmly bound down by precedent were found inadequate for all the needs of the people, and there sprang up the chancery courts which decided controversies from an equitable standpoint and gave relief independent of precedent. This chancery or equity court still exists in a modified form, but the distinction between common law and equity has in a great measure disappeared. The distinction of to-day consists in the relief sought; if it be merely money damages, then it is a common law case; if some extraordinary relief, as prohibiting a man from erecting on his land a powder factory which would endanger his neighbor's dwelling, or correcting a deed of land which was improperly drawn, then the case is in equity.

Criminal and Civil Law.

Both common law and statute

law can be divided into criminal and civil law.

Criminal Law. The preservation of society demands that certain rules be laid down regulating the acts of its members toward the community in general. A violation of these laws is an offense against the state and is called a crime. The law which treats of crimes and their punishment is called criminal law. It forbids one man to steal from another, making it a crime, because such acts endanger the security of property and the safety of society, and a punishment of imprisonment for such an offense is therefore provided.

Civil Law. As distinguished from the criminal law, that branch of law which looks to the establishment and recovery of private rights is called civil law. It controls the private rights and remedies of men in their relations with each other, in contrast with those that are public and affect the community in general.

Penalties. A crime is an offense against the state in which it is committed, and the penalties are fines, imprisonment, and, for a few offenses, death.

In a criminal case the state, through its officers, is the plaintiff and the one who committed the crime is the defendant.