By referring to our national and state constitutions, our readers will see that the powers of both national and state governments are divided into three departments, known as the executive, legislative and judicial, each of which is distinct from the others, although they work in harmony in the enactment and enforcement of the laws. The courts come under the head of that last named, and their duties have been demonstrated to be “to define, declare and apply the laws.”
Of this common and statute law a very essential part is that which is applicable to business, or commercial law, or, as it is generally denominated in the books, the “Law-Merchant.” Much of the law bearing upon this subject is the old common law, with the enlargements consequent upon an increased commercial activity. Here it is that we find many of the customs and usages of merchants gradually merging into recognized law. The three “days of grace” allowed on all commercial paper is but a common illustration of this, similar in origin to many customs in all departments of trade, which might easily be cited, and which were in their inception of very limited significance, but which have continually been receiving a more extended recognition, until we find them clothed with all the insignia of authority.
These customs and usages we shall have occasion to give more extended explanations as we touch upon the several sub-divisions of our topic. There are a few technical words which we shall find it convenient to use. Prof. Greenleaf clearly expresses the reason for this, as follows:
“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 the law as of everything else.… 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 of England. And it might seem that we had just as good terminations in English, in er and ed, which mean the same thing. But this 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 the man to whom the indorsement is made; but the note itself we say is indorsed. So vendor means the man who sells, vendee the man to whom something is sold, and the thing sold is vended.”
In regard to the phrase “presumption of law,” to which we may have occasion to refer. The significance of this phrase is this: Under certain conditions, without absolute proof of the matter concerning which some conclusion is sought, the law will presume to interpret the intention or acts of persons. For instance, regarding criminal procedure, one is presumed to be innocent until he is proved to be guilty. Presumptions prevail only when proof is lacking.
CONTRACTS.
A contract has been aptly defined to be “an agreement to do or not to do some particular thing.” It may be verbal or in writing. If the conditions of a contract, whether verbal or written, be expressly stated and agreed upon, it is then termed an expressed contract. If on the other hand there are no well defined and specific agreements regarding the undertaking or the consideration to be paid for its accomplishment, it is called an implied contract.
The conditions of an expressed contract must be strictly complied with, and the parties to it are bound to faithfully observe the same, however onerous may be the burden, while the conditions of an implied contract not being agreed upon specifically, are such as custom may dictate. As an illustration of this: A agrees to pay B two dollars per day for labor. This is expressed, so far as the rate of wages is concerned; but the number of hours that shall be taken to constitute a day’s work is not agreed upon, and must be determined by implication. As a result, the question would be settled by the custom in such matters which obtained in the place where the contract was made. Or, if A engages B to undertake the building of a cottage, with no stipulations regarding the wages to be paid, B when the work is completed can recover for his compensation whatever is proved to be the usual and customary remuneration paid men in the same business and possessed of equal skill. The enforcement of obligations is no less strict when the standing of the contract is implied than when expressed, after determining what the obligations of the parties are.
The elements of a contract are parties, consideration, subject matter, mutual assent and time.
Parties.—Two or more competent persons may make a legal contract. Competent persons, it will be observed. What constitutes competency? Generally, legal age and sound mind; while minority, insanity, idiocy, intoxication and coverture are said to be the conditions of incompetency. With the exception of a few states where females become of age at eighteen, the legal age is twenty-one years. A consideration of the conditions of incompetency will sufficiently explain the requisites of competency negatively. Minors, or those who have not attained legal age, or infants as the law denominates them, are considered incompetent because of inexperience, and a fair presumption that unprincipled parties might take unfair advantage of them, and lead them into business complications which a riper experience would disapprove. The contracts of a minor approved by him when he becomes of age are binding, however; so that it will be observed, such contracts are not absolutely void, only voidable at the discretion of the minor. If an infant makes a transfer of real estate he may, on reaching his majority, compel the purchaser to reconvey the property, by returning to him the purchase money. The law would not permit him to retain the purchase price and compel the re-transfer, because it is not the policy of the law to assist the minor in his fraudulent purposes, but only to protect him from the impositions of those skilled in wicked devices. There are some contracts which an infant can not disclaim, viz.: such as are for necessaries. It is something of a question to determine what are necessaries; but the minor’s fortune and social position must be the guide, for where sufficient food and clothes might be all that would be termed necessaries for one, for another by fortune more favored, “equipage, dress and entertainments” would be considered just as essential.