The four main forms of commercial paper are the bill of exchange and its derivative the bank check, the promissory note and its deriva tive the bank note, the bill of lading and the warehouse receipt. Local usages have caused slight divergences in the law of negotiable instruments in the various States of the Union and other political subdivisions of the English speaking world. Thanics to the efforts of the American Bar Association in propounding uni form State laws on this and related subjects, the inconveniences resulting from diversity are in the way of being remedied. From the latest Report of the proceedings of the Association (1917) it appears that the uniform Negotiable Instruments Act has become a law in 46 States (Georgia and Texas being the exceptions) as well as in the territories of Alaska and Hawaii, the District of Columbia and the Phil ippine Islands; the uniform Warehouse Re ceipts Act has been accepted by 39 States, and the Bills of Lading Act by 20 States.
The greatest addition made to commercial law at one stroke by judicial authority was the statement of the law of Bailments by Lord Holt in the celebrated case of Coggs vs. Ber nard, which is reported in 2 Ld. Raymond, page 909. What a large block of law this is will appear from a consideration of the fact that carriers, depositories (including banks), factors and brokers, innkeepers, pledgees, warehouse men and all other persons who borrow, hire or receive goods and chattels for selling, transport ing or safekeeping, or for performing some work on or with the same, are bailees with respect to the property thus put into or left in their possession. The commission merchant who receives a consignment of goods to sell is a bailee, so is a banker who receives a note for collection; so is one who hires a team by the hour, day or week and, also, the tradesman who makes "pants" for from their own cloth or makes furs for ladies "from their own skins." The word bailment is derived from the Norman French, Miller, to deliver. Whatever is delivered by the owner to another person, in any of the ways or for any of the purposes above indicated, is bailed to him; and the law of Bailments comprises the rules and usages whereby the rights and duties of the parties in relation to the property and to each other are determined. Justice Holt, however, borrowed most of his principles, perhaps all of them, from the (Institutes) of Justinian and the 'Corpus Juris Civilis.) Under the subhead Arbitration and Award are embraced the rules of law and usages whereby merchants may obtain decisions of controversies between themselves without re sort to the regular courts of law. An arbitrator is appointed by the parties on each side of the controversy and the two arbitrators select an umpire; whereupon the tribunal thus consti tuted proceeds with the hearing of evidence and the making of an award. The proceedings are informal and, while nobody can be compelled to arbitrate, when the parties have once sub mitted a case the. submission is irrevocable, and the award made is enforcible just the same as is the judgment of a court of law. Some com mercial exchanges, under special legislative authority, maintain courts of arbitration, pre sided over by permanent judges, who act either alone or as umpires in association with arbi trators appointed by the parties. Latterly efforts have been made to extend this method of adjudicating disputes among merchants in ternationally, and notable progress has been made toward an agreement between the Cham ber of Commerce of the United States and the corresponding Argentine body at Buenos Aires. Composition with creditors is a coinmon law method for the discharge of an insolvent debtor from his obligations. Usually the composition preceded by an assignment of the debtor's property for the benefit of all of his creditors, with the object of preventing any creditor from obtaining a preference. All of the creditors must agree to the composition and the terms of settlement must be equal for all. If a single creditor, no matter how small his claim, refuses to sign the composition deed, or if by secret arrangement any discrimination whatsoever be made in favor of one or more creditors, the settlement is a nullity. To all intents and pur
poses compositions with creditors have been superseded by proceedings in bankruptcy (q.v.). Originally the law terms guaranty and war ranty were of identical meaning. In time, however, °warranty° became employed exclu sively as a term of assurance of the title, quality or quantity of a thing sold. Guaranty is an undertaking on the part of the guarantor to pay the debt or perform the obligation of another in the event of the latter making de fault. A guaranty, generally spealcing, is not negotiable; nor is it transferable in such a way as to enable anybody except the party with whorn the contract was originally made to maintain an action thereon. Regarding marine insurance as a subdivision of maritime law, the form of indemnity contract with which commercial law is chiefly concerned is fire in surance. This kind of insurance is sometimes made to indemnify against loss by fire of ships in port; more often this form of insurance is made to cover warehouses and mercantile prop erty therein contained, or goods and chattels in stores and factories. The general principles of the law of contracts will answer most ques tions raised by fire insurance policies; but the analogies with marine insurance are many. A debtor, however, may insure his life for the benefit of his creditor. The law of agency rests on two fundamental principles: (1) The agent is a mere instrument, though a living and in telligent one; for, whether a man signs his name with a pen which he takes from the table, or by another man whom he requests or author izes to sign for him, in either case the act is that of the principal; (2) as between.the prin cipal and a third party, the former is respon sible for all the acts of the agent, if there was colorable reason for the belief of the third party that he was dealing with a principal or that the agent was duly authorized. Like the law of agency, the law of partnership and its modern outgrowths, the law of joint-stock associations and of corporations, are subjects too larg-e for cursory treatment under the gen eral head of commercial law. The modern law against monopolies and restraints of trade, though the same has become the subject of voluminous statutory regulations and judicial opinions, is a mere amplification of a few prin ciples of the common law on the subject. The epochal opinion of Chief Justice White in the Standard Oil case was little more than a re statement of obi and familiar legal maxims embodying commercial usages. The codifica tion of the law of sales has been accomplished in England, but the Sales Act submitted to the National Conferences of the Commissioners on Uniform State Laws has, thus far, been ratified by only 18 States and Alaska Territory. The two controlling principles of the law of sales are: (1) That, where goods are sold by sample or according to description, there is an implied warranty that they correspond to the sample or description; (2) that in the absence of an express .warranty the purchaser, having an opportunity to examine the goods, must be on his guard against defects.
In default of codification the Commercial Law as it exists in the United States must be sought under the titles of the subjects which it comprises. Even such a codification would be of little service to layman inexpert in the interpretation and construction of statutes. The hodge-podges published under „such names as 'Business Laws) or (Every Man his own Lawyer) are to be shunned as traps for the unwary. The saying that °a man who is his own lawyer has a fool for a client° is as true as ever. There are no short cuts to a knowl edge of the law any more than there are to the knowledge of other sciences. Consult Parsons' (On Contracts' (9th ed., 1909) or any other of the standard textbooks used by law students, which fairly cover the ground. An excellent English work is Smith, John William, (Mer cantile Law) (11th ed., London 1905).