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CHAPTER XLI.

LEX MERCATORIA.

DCCCX. THE Lex Mercatoria (a) is so important a branch of Private International Law, that it has seemed to the writer of these pages expedient to treat it apart from the general law on obligations which have been the subject of preceding chapters. It is proposed to consider it under the two following divisions, which, though they do not perhaps entirely exhaust the subject, supply principles applicable to every part of it (b).

1. The general Maritime Law; which will include the right of Stoppage in transitu.

2. The mode of carrying on business by Bills of exchange.

DCCCXI. 1. "The maritime law," Lord Mansfield

(a) "To this head may most properly be referred a particular system of customs used only among one set of the king's subjects, called the customs of merchants, or lex mercatoria; which, however different from the general rules of the common law, is yet engrafted into it and made part of it; being allowed for the benefit of trade to be of the utmost validity in all commercial transactions; for it is a maxim of law that 'cuilibet in suâ arte credendum est.'"-Blackstone's Comment. vol. i. introd. sect. iii. p. 75. [See Dr. Wendt's Papers on Maritime Legislation, 3rd ed. 1888, Introduction, pp. xxiii-xxix.]

(b) The Law Merchant is a system founded on the rules of equity and governed in all its parts by plain justice and good faith.

Master v. Miller, 4 Term Rep. at p. 342, per Buller J.

Lennig v. Ralston, 23 Pennsylvania State Rep. p. 137 (1854). Bell, Commentaries (7th edit.), book iii. part i. ch. iv. "Of Maritime Contracts."

Story, Conflict of Laws, ss. 286 b, 384, 385, 391-402 a; see, too, s. 322b in fine (referring to a bottomry bond), 323, note, 327 a, 327 b.

justly observed, "is not the law of a particular country." Upon the same principle, Thöl (bb), the most learned of modern foreign writers upon mercantile laws, treats his subject as embracing "partly the commercial legal rela"tions between individuals-Private mercantile or com"mercial law (Privathandelsrecht); partly mercantile or "commercial legal relations between government and "subjects-Public commercial or mercantile law (Oeffent"liches Handelsrecht); partly commercial or mercantile 66 legal relations between different states-International "mercantile or commercial law (Handelsvölkerrecht)" (c).

The recognition of this general maritime law is, as will be seen, especially remarkable in the cases of tort, arising from collision between ships, one or both of which belong to a foreign state, upon the high seas.

DCCCXII. The sources of this Lex Mercatoria (and the observation applies to both divisions of the subject mentioned above) spring from the usage of maritime states, founded on the necessities of commerce, upon the natural rights and obligations which, independently of municipal law, grow out of commercial intercourse; upon the reasonings of accredited writers upon this branch of jurisprudence, which reasonings have been built up, by judicial decisions in England, into a fabric of municipal commercial law. In other countries the same effect has been produced by the incorporation into codes of the leading principles previously established upon the authority of jurists. In England also, during the last few years, a commercial [maritime] code has in fact been created, though it has assumed the technical form of an Act of Parliament (d).

DCCCXIII. So far as these codes and statutes incor

(bb) Das Handelsrecht, von Dr. Heinrich Thöl, Göttingen, 1854, vol. i. pp. 1, 2.

(c) Or, "Particuläres, gemeines, allgemeines, Handelsrecht."

(d) 17 & 18 Vic. c. 104, The Merchant Shipping Act, 1854, amended by subsequent statutes.

porate the general maritime jurisprudence, no injury is done to Private International Law; but when they incorporate some principle of domestic or municipal policy at variance with that Law, there is danger of a conflict and collision between the interests of one state and those of the general community of states, which may lead both to individual injustice, and to a disturbance of the amicable relations of independent nations.

DCCCXIV. Illustrations of this danger and inconvenience may be easily furnished. The English Merchant Shipping Act (dd) provides that in certain circumstances the property of a ship may be changed at home while she is navigating the ocean, and of course, therefore, without any papers on board evidencing the change of ownership. It may happen, however, that the ship, which has undergone such change of ownership at home, is subsequently sold abroad by the master as agent for the former proprietor. It is very probable that in such a case the foreign court would disregard the peculiar law of England, and adhere to the general maritime law of Europe. Such appears to have been the reasoning of the Civil Tribunal of Havre, in the case of the Ann Martin (e) : "Attendu

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que la nature de ce contrat qu'on a qualifié de mortgage, d'après la loi anglaise, est peu importante au procès; que, soit qu'il constitue une vente réelle ou une simple "vente apparente, ou un nantissement accompagné de "certains priviléges particuliers dérivant de la législation "étrangère sous l'empire de laquelle il a été souscrit, la "décision doit être la même ; qu'il s'agit, en effet, de la "propriété d'un navire navigant sous le nom de Clauss et Comp.; qu'il est impossible d'admettre que, sous une

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[(dd) 17 & 18 Vic. c. 104, ss. 55, et seq.]

(e) April 19, 1856, taken on appeal to the Court of Appeal at Rouen, but the judgment was affirmed. The extract is from the appendix to the case of Castrique v. Imrie in the House of Lords, reported L. R. 4 H. L. p. 414. Vide post, § dccccxliv.

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législation commerciale quelconque, il soit reçu qu'en "cours de voyage cette propriété puisse être transmise à un tiers, ou lui être engagée à titre de nantissement, sans qu'aucune trace de cette mutation ou de cette " modification de propriété soit imprimée aux papiers du "bord; que la bonne foi qui est l'âme du commerce "répugne à une semblable idée” (ƒ).

DCCCXV. On the other hand, the English High Court of Admiralty, supported by the Judicial Committee of the Privy Council, was careful during the existence of the old law, and before the establishment of the International [Regulations mentioned hereafter], never to apply to a foreign vessel the rules of navigation prescribed by statute for British vessels. In all cases of collision upon the high seas or in foreign waters, between a foreign and English vessel, or between two foreign vessels, the wrongdoer, whether he were foreigner or English subject, was ascertained by a reference to the old rule of the sea, founded on the principle of general maritime law, and not to the rule prescribed by the English statute (g). Cases of Collision, like cases of Salvage, are considered as belonging to the jus gentium (h).

(f) This doctrine accords with that laid down by Mr. Justice Martin in Arayo v. Currell, 1 Louisiana Rep. p. 528. Vide infrà, § dcccxxi., as to authority of master as agent. [See Hooper v. Gumm, L. R. 2 Ch. App. p. 282.]

(g) Cope v. Doherty, decided by V.-C. Page Wood (1858); affirmed on appeal before the Lords Justices.-4 K. & J. p. 367; 2 De G. & J. p. 614; 4 Jur. N. S. pp. 451, 699.

[The Wild Ranger, Lushington, p. 553.]

The Zollverein, Swabey, Adm. Rep. p. 96.
The Dumfries, ib. pp. 63, 125.

The General Steam Navigation Co. v. Guillon, 11 Mee. & Wel. Rep. p. 877.

[So, too, the municipal law of the country of the foreign ship is not allowed to prevail over the general maritime law, in an action of damage for collision on the high seas, even where the action is brought in personam. The Leon, L. R. 6 P. D. p. 148.]

[(h) See The Johann Friedrich, 1 W. Robinson, p. 35.]

[DCCCXV.A. The Merchant Shipping Act Amendment Act, 1862 (hh), contained a table of regulations for preventing collisions at sea, and empowered the Queen in Council to alter these regulations from time to time, on the joint recommendation of the Admiralty and the Board of Trade; and also to direct that they should apply to the ships, whether within British jurisdiction or not, of any foreign country consenting thereto. The first code drawn up under these powers was that of June 1, 1863, agreed upon in consultation with France, and differing but little from the table contained in the British Act (i).

The Regulations at present in force were established by an Order in Council of August 14, 1879, and came into operation on September 1, 1880; except Article 10 (relating to fishing vessels and open boats), which was from time to time suspended, and has now been modified by subsequent Orders in 1884 and 1885 (ii). Most of the maritime nations of the world have adopted these Regulations (j), which have therefore the character of an International Code (j).]

[(hh) 25 & 26 Vic. c. 63. See ss. 25 & 58.

(i) London Gazette, January 13, 1863, p. 188.

(ii) Ibid. August 19, 1879, p. 5032; April 9, 1880, p. 2434; February 8, 1884, p. 582; August 22, 1884, p. 3813; January 2, 1885, p. 4; June 30, 1885, p. 2988.

(j) Parliamentary Papers, 1880, No. 250, Session II. London Gazette, August 19, 1879, p. 5032; September 17, 1880, p. 4941; December 14, 1880, p. 6723.]

[(jj) A difficult international question, touching the enforcement of the Regulations, arose out of a collision that took place in January, 1875, between the Portuguese steamer Insulano and the British steamer City of Mecca. The owners of the latter vessel having been sued for damages in Portugal, the courts there placed upon certain articles of the table of Regulations, which was then in force and had been adopted by Portugal, a construction altogether opposed to the one accepted in England. A correspondence ensued between the two governments. in the course of which Mr. (now Sir Robert) Morier, then British Minister at Lisbon, forcibly urged upon his own government that mischief had arisen, and in future was likely to arise, from

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