law, these codes should so far as possible embody these customs and usages, freed from legal jargon and unhampered by mere legal rules except such as are based on ethical principles underlying all American Jurisprudence, and principles of economics underlying sound and sane commerce.

In 1775, and repeated in 1793 in the celebrated case of Waugh v. Carver, the English courts held that the mere receipt of a percentage of profits made one a partner, and this remained the law of England until overthrown by the House of Lords in 1863. For a period of eighty-three years English lawyers evaded the effect of this decision by providing not for a receipt of a percentage of the profits but for a receipt of an amount equal to a percentage of the profits. This was mere legal jargon.

A mercantile code should be a clear expression of well recognized commercial customs whether they have or have not yet found their place in judicial decisions. The merchants gave to the law their customs and the law should give their customs back to them clearly expressed and freed from mere technical expressions. Whenever there is a conflict between mercantile usages and legal expressions, legal expressions should give way to mercantile usages embodied as rules of law.

32 H. Bl., 235.

Sir Courtney Ilbert in his work on "Legislative Methods" (at page 247) gives the following excellent advice: "The language of a Bill should be precise, but not too technical. An Act of Parliament has to be interpreted, in cases of difficulty, by legal experts, but it must be passed by laymen, be administered by laymen, and operates on laymen. Therefore it should be expressed in language intelligible to the lay folk. In some cases the compromise between popular and technical language may be effected by means of a definition. definitions are dangerous and should be sparingly used."

But

A commercial code should consist in part of a statement of general principles governing usual cases which arise in practice. The great object of a code is certainty. The most bitter opponents of codification concede that mercantile law should be codified for the sake of certainty of the rule. Therefore, a code should not consist of a mere statement of general principles leaving its application entirely in the discretion of a judge. The French Codes, for this reason, are not models to be followed. Nor on the other hand should a code refine too much. A code should consist of a statement of the general rules of law applicable to general business transactions and exceptions to the

rules applicable to the usual exceptional cases. To sum up: the collocations of facts which arise in mercantile transactions should be provided for. The code should be based upon judicial decisions, judicially recognized customs and customs recognized by the mercantile community. Where judicial decisions conflict with well recognized, economically and ethically sound customs, the mercantile customs should be embodied in the code in preference to the formal technical rules.

A code should be so framed as not to check the growth of new mercantile customs. While a code should contain general rules and well defined exceptions it should be framed so as to allow new mercantile usages to grow. As said by Sir Frederick Pollock in his lectures on the Expansion of the Common Law, delivered on the occasion of his recent visit to America in 1903: "It is important to observe that the Law Merchant was not incorporated into our systems, as some have contended, as a fixed body of rules incapable of addition. It is still in fact a living body of customs and English decisions have quite lately recognized this fact."

A code must be framed so that there will be uniformity of decision not only in interpreting its provisions but in laying down rules governing transactions not covered by it. The great object

in preparing a code is to produce a uniform law throughout the United States by having each state adopt the same code.

It is universally recognized that there is no common law of the United States. It is true that a Federal Court obtaining jurisdiction by reason of diversity of citizenship will use its independent judgment in determining what is the law of the state. This was elucidated by Mr. Justice Story, when he said in 1842 in the case of Swift v. Tyson,* "The law respecting negotiable instruments may be truly declared, in the language of Cicero, adopted by Lord Mansfield in Luke v. Lyde, 2 Burr. 883, 887, to be in a great measure, not the law of a single country only, but of the commercial world." But this very doctrine has resulted in increasing lack of uniformity. On subjects as to which Congress has jurisdiction, such as interstate commerce, there may be unity of law. As to general commercial subjects there cannot be unity of law but there may and ought to be uniformity. The object of framing a code and having it adopted in each state may fail in part unless clauses can be framed which will bring about uniformity not only in the interpretation and construction of the code itself, but in applying rules of law to cases

416 Pet., 1, 19.

not covered by the code and applying mercantile usages which may arise after its adoption.

The English Bills of Exchange Act, passed August 18, 1882, provides (section 97) that:

"The rules of common law including the Law Merchant, save in so far as they are inconsistent with the express provisions of this Act, shall continue to apply to Bills of Exchange, promissory notes and checks.'

The Negotiable Instruments Code prepared by the Conference of Commissioners on Uniform State Laws and now adopted in twenty-five states and territories, provides (section 7) that:

"In any case not provided for in this Act the rules of the Law Merchant shall govern.'

The English Sales Code, passed February 30, 1894, provides (section 61) that:

"The rules of common law, including the Law Merchant, save in so far as they are inconsistent with the express provisions of this Act, and in particular the rules relating to the law of principal and agent and the effect of fraud, misrepresentation, duress or coercion, mistake, or other invalidating cause shall continue to apply to contracts for the sale of goods."

In the draft of a Sale Code prepared by Professor Samuel Williston for the Conference of