The Law Merchant
The Law Merchant
The medieval merchant was always recognized as belonging to one of the sev
eral distinct medieval classes. That he should be allowed a law relating only to
himself was not at all strange to the medieval mind, accustomed as that mind
was to the universal character of such things as canon and civil law.
Medieval man accepted the idea that "universal" groups of particular people
could have a particular "universal" law. True, Law Merchant was never uni
versal in the sense that it was the same everywhere, but everywhere it possessed
certain basic principles. These were that Law Merchant must be equitable,
that faith must be kept and that justice must be speedy.
The merchant belonged to a powerful class that Icings and governments
wished to encourage. Successful trade needs efficient state government and
order, two things which every government, in theory at least, seeks. For
these things, the merchants supported the governments. For the revenues which
the merchants brought to exchequers that were never full, for governmental
backing, the merchants obtained many privileges. They were allowed to
develop their own methods of business and business organization, and also
their own machinery of justice.
It must not be expected that medieval England would stand in the fore
front of such developments. Economically, at this period, she was always
something of a backwater. Her principal exports were raw wool, hides and tin,
and these commodities she exchanged for foreign manufactured goods. Foreign
trade was largely in the hands of merchants from other lands. Consequently,
her own markets and fairs were of no great European importance and the law
that developed fell into the category of the markets and fairs themselves.
As Sir William Holdsworth put it, "The impression which the published re
cords of our fair courts leaves upon me is that they were courts which dealt
for the most part with petty transactions, and that consequently, the law there
administered had not much chance to develop."2 The Law Merchant which
had the great influence upon England's post-medieval development came from
the highly developed commercial life of the continent.
This does not mean that both domestic and foreign merchants were not
an important part of medieval England. The importance of foreign merchants
is attested by clause forty-one of Magna Charta, which states:
"All merchants may safely and securely go away from England, come to England, stay in
and go through England, by land, or by water, for buying and selling under right and ancient
customs and without any evil exactions, except in time of war if they are from the land at
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war with us. And if such persons are found in our land at the beginning of a war, they
shall be arrested without injury to their bodies or goods until we or our chief justice can
ascertain how the merchants of our land who may then be found in the land at war with
us are treated. And if our men are to be safe, the others shall be safe in our land."
Both domestic and foreign merchants were placated by the 1283 Statute of
Merchants which allowed the imprisonment of defaulters for their debts.
The moveable goods, and even the land, of such might now be sold to satisfy
their creditors, by the mayor and clerk of London, of York and of Bristol.
Despite such enactments, which do prove the importance of merchants in
England, the most highly developed commercial life in the middle ages was to
be found in far-away Italy. Here, merchant guilds either managed to control
completely the city-state or they allied themselves inextricably with the govern
ment of that state. The proof of this domination, or alliance, can be seen in
the twelfth<entury appearance of the Consules mercatorum, the heads of the
merchant guilds, who eventually were given control over the state judicial
machinery, at least as far as it related to commercial matters.
An old Italian legal principle was that, if a citizen of one state harmed
the citizen of another, the injured party could obtain his redress, if necessary,
at the expense of any fellow citizens of the injurer. This was called the right
of reprisal. The right did not facilitate trade and, to overcome it, Italian
merchant communities appointed Consules hospites to represent themselves at
all important Mediterranean trading centres. These consules advised their
own nationals and, generally, looked after the affairs and disputes of the com
munity they represented. In doing so, the Consules became the ancestors
of the modern consular staffs and did much to standardize international
legal procedure in merchant cases. As a result, as Lord Mansfield was later
able to say, maritime law "is not the law of a particular country, but the
general law of nations."
The standardization of maritime and commercial custom by the Consules
hospites was aided by the similarity of merchant problems everywhere. Trade
brought disputes over carriage, exchanges and partnership agreements, which
were apt to be solved in various areas by solutions which had much in common.
The great medieval fairs of Europe, international in their scope, further assisted
this general tendency.
Trade had suffered badly in Europe with the collapse of Rome. While
it never completely disappeared, the exchange of goods was at first largely, if
not entirely, restricted to periodic markets or fairs. These were encouraged
by the Church and by kings and emperors. The authorities laid their especial
peace upon such meetings, receiving in return concrete advantages, such as tolls,
etc. With each such market or fair there was a court, and the right to
hold that court belonged to the possessor of the franchise for the market or
fair. The law utilized at first was not particularly international in character,
and it did not become so until the appearance of the great international fairs
and the settlements of privileged foreign merchants in the great towns. That
law, nonetheless, always tended to stand apart from other local law or laws
and cases were normally decided by the merchants concerned, who were both
suitors and the doomsmen.
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With the eventual settling down of Europe in the tenth century, when
such enterprises as the Crusades had widened the horizons of that continent,
the great continental fairs found a suitable environment in which they could
develop. Mostly they were to be found at the strategical places upon the great
trade routes which ran north and south across the European continent. That
Italian merchants and Italian customs would contribute much to them could
only be expected.
While these fairs were only an episode in the long commercial history of
Europe — for commerce soon sought permanent not transitory centres — they
did have a lasting effect upon European commercial law and procedure.
England played little part in all this: she had no great fairs of her own to match,
for example, the great fairs of Lyons and Champagne.
Similar developments took place in the more purely maritime field. It is
impossible to imagine an international merchant who did not cross water, at
some point, but maritime and commercial law did have their differences. Both,
however, were administered with the same general procedure, according to the
same general principles.
England, again, was not noted for her contribution. However, she did
have maritime courts in her greater seaports. The Domesday of Ipswich notes
that, "the pleas yoven to the lawe maryne, that is to wite, for straunge maryn-
erys passaunt and for hem that abydene not but her tyde, shuldene be
completed from tyde to tyde."3 On maritime and commercial custom in the
British Isles Gross writes:
"Already in the twelfth century custom in some parts of England and Scotland required
that pleas concerning wayfaring merchants should be settled before the third tide.. Bracton
u l 4' fP'fk* °f 'he ne«l of expedition in deciding such cases: 'propter personas qui celerem
habere debent justitiam, sicut sum mercatores quibus exhibetur justitia pepoudrous.' 'Que
nul marchaunt foreyn soit dclaie par lunge traine du pley,' 'hastif remedie lour soit fait,'
and similar injunctions are often found in the records from the thirteenth century onward."4
But England was not the source of a great maritime code. Her ports came to
follow the great code of Oleron, later to be used as a basis for the Admiralty
court which would threaten to engulf all English port jurisdiction.
Internal trade in England during Anglo-Saxon times, as everywhere else,
was largely confined to distinct centres to protect the merchants involved.
As a result, there developed the "burhs" and "ports", on which Maitland
wrote:
"The general logic of the process we take to have been this: The King's burh enjoys a special
peace: even the men who are going to or coming from it are under royal protection: therefore
within its walls men can meet together to buy and sell in safety: also laws which are directed
against theft command that men shall not buy and sell elsewhere: thus a market is
established: traders begin to build booths round the market-place and to live in the borough."5
Naturally this especial royal protection had to be paid for in the form of
tolls either to the king himself or to the person or corporation who obtained
from him the right or franchise to hold a market. These franchises tended to
Book of the Admiralty (R.S.), 11. 23.
'Gross, Selected Cases Concerning Lav Merchant (S.S.) i.xxv-xxvi.
*Maitland, Domesday Book and Beyond, pp. 192-3. All authorities do not accept the notion
that the Anglo-Saxon burh was a place for commerce, but important Anglo-Saxon scholars
such as Stenton support Maitland's thesis.
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pass into landed hands; the fact that the grant of such a franchise was royal
right was not always recognized until the Quo Warranto proceedings of Ed
ward I.
The grant of a market implied, and early also stated, that with it went the
right to hold a court. Many early charters conferring a market or fair fran
chise do specifically mention "sac" and "soc".° This was not so later but, from
the time of Henry II onwards, whether stated or not such a franchise did
always give the right to have a court. The lawyers of Edward IV's time be
lieved that every market or fair should have a tribunal.7
Market and fair courts became known as courts of piepowder. Sir Edward
Coke thought that the name arose from the speed of justice granted in them —
justice was given before the dust could fall from the wandering dusty litigants,
or be removed from their feet. This was not the case. The name "piepowder"
came from the dusty appearance of the wandering merchants who made up
the pleaders and early the jury of the court. The term "piepowder court" was
not used on the continent, but tradesmen or chapmen were sometimes called
"piepoudreux".
A borough might possess an ordinary court as well as a piepowder court.
Sometimes the ordinary court acted as a merchant court, as the need arose, in
which case it often kept separate piepowder records. In towns such as Bristol
there was a piepowder court in session only during the fourteen days of the
annual Bristol fair. When the fair ended so did the court. In Bristol, ques
tions concerning merchants at other times of the year were heard at the
tolsey court. There was indefinite variety and even the usual medieval
curiosities — some boroughs without markets had the right to hold piepowder
courts.
^A~cWter of Henry I gives a fair to the bishop of Norwich, "cum soca et saca et thai «
theam et tofangenetheof et aliis consuetudinibu* omnibus que pertinent ad jus feriarum
(Col. Charttr Rolls, i. 153). .
'The.y«r Books record "a chescun market est incident un court de pypoud por faire
justice as marchants deins le market' (12 Edward IV., f. 9, 22 Edward IV., f. 33).
aOp. <U.t I xxvL
266
To sum up, Gross remarks that "Pleas were begun without a writ, formalities
were assuaged, few essoins were allowed, and an answer to the summons was
expected within a day, often indeed within a hour."0
The scope of this type of court was, of course, limited. Contract, debt, tres
pass, breaches of assize of bread and beer were the common actions. Pleas
of land could not be tried nor, ordinarily, were crown pleas which awaited
the coming of the royal justices. Some franchises, however, did include even
crown pleas.
In the reign of Edward IV (17 Edward IV., c.2) these courts were rigidly
restricted to suits that arose as a result of actions taking place within the
market or fair. The man who made the complaint to begin an action was
forced to swear that the action or deed in question "was made or committed
within the fair and within the time of the said fair where he taketh action."
Originally, like the old Anglo-Saxon courts, those who gave suit to the
court were also the doomsmen who found the judgement, the doomsmen who
recited the law. Later, in the reign of Edward IV, the merchants were no
longer to act in this capacity. The chief officer of the court was to act in
future as the judge.
Holdsworth asserts that parties to a case might have it tried either by
jury or by the ancient method of compurgation.
"If they elected the former method (as they usually did) matters proceeded as at common
law. If they elected the latter method the Red Book of Bristol, and a case of 1428 which
occurred in the court of the staples at Exeter, show that the formal compurgation was
disappearing, and that proof really turned upon an examination of the plaintiff's secta.
The secta was treated as a body of witnesses. They were examined by the court, and were
examined apart from one another if there was any reason to suspect fraud or collusion.
At the same time the trial had not quite assumed its modern aspect. If the members of the
secta stuck, to their tale and convinced the court the plaintiff won his case. The defendant
could not call rebutting evidence. All he could do was to accuse the plaintiff's witnesses of
perjury; and to succeed on this charge he must produce at least two more witnesses than the
plaintiff."1'
°lbU., i.
. tit., v. 107.
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towns and outlined the rights of these people in the staple courts. The
statute (27 Edward III., st.ii. c.8) proclaimed that all those who came to the
staple
"shall be ruled by the law merchant a> to all things touching the staples, and not by the
common law of the land or by the usage of cities, boroughs or other towns . . . And for the
merchants may not often tarry long in one place ... we wilt and grant that speedy right
be done from day to day and hour to hour."
The staples did not choke off the intermittent fairs and markets. These
continued with vigour only slightly abated until the late sixteenth century.
Then they declined rapidly, probably as a result of greatly improved roads and
transportation generally. But like many medieval institutions they died slowly.
Piepowder courts were still being held as late as 1854, with one at Bartholomew
fair, London. There were even later nominal survivors.
As we will see, the Common Law courts began to take over piepowder
cases and, even if the fair persisted, ,the court died. One or two ancient fairs
actually are still being held. One such fair is the Portsdown fair, originally
known as the Portsmouth Fair, which has been held three time a year ever
since its royal charter was issued in 1194. Now, of course, it is more of a
curiosity than anything else.
Fair and borough courts were hardly concerned with the major legal
problems of foreign trade: they did not develop remedies for suits concerning
that trade. Such suits were usually left to the royal Council or to Chancery.
Common law at first would not touch them since the facts of such cases could
not be found by the normal Common Law process of enpanelling a jury.
Borough and fair courts, on the whole, were fairly humble tribunals which
fell easy victims to the gradually expanding jurisdiction of Common Law in
the post-medieval times. Common Law devised much more effective actions to
deal with even their petty concerns.11
Holdsworth notes that,
"... by the end of the medieval period, it had become fairly obvious that the future
development of English commercial law would take place in the central courts; and, since in
the central courts the merchants played but a small part compared with the part they
played in the tribunals of the cities of Italy, Germany and France, it followed that the
manner of its development would be in some respects unique."12
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to have been the only authority of the English Admirals and they possessed no
more until the middle of the fourteenth century. Then we can see a widening
of their powers in the faint beginnings of an Admiralty Court. One may have
been set up as early as 1332, although the first unmistakeable reference to
such a court is not found in the records until 1357. In that year there was
a court to consider claims arising out of alleged piratical activities by English
sailors at the expense of France and the Low Countries. There were at first
as many courts as admirals. Not until the fifteenth century do we find but
one admiral, the Lord High Admiral, and one Admiralty Court.
The crown had various ways of influencing the maritime courts. One was
to send a writ instructing the mayor and bailiffs of a port to proceed and, if
this writ was ignored, to issue an attachment for contempt. At times special
commissions could be appointed to deal with acts of piracy and so forth
which were normally the concern of the ports.
Despite these controls the crown seems to have felt that something special
was needed to settle the never-ending disputes with other maritime nations and
areas. This is the belief of the editor of the Select Pleas of the Admiralty,
who writes:
"it is not unreasonable to suppose that after the battle of Sluys Edward HI, acting upon the
advice of the commissioners of 1339, extended the jurisdiction of the Admiral, which had
been up to that date mainly disciplinary and administrative, so as to enable him to hold an
independent court to administer complete justice in piracy and in other maritime cases."13
l3Setect Please of the Admiralty (S.S.), i. xxv-xxvi. The commissioners mentioned had been
appointed to deal with piracy claims made by Flanders against English seamen.
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disputed. Some authorities assert that the league came about as a result of the
actions of the pre-Conquest Earl Godwin. Hastings was the leader of the
group, and the remaining original four were Romney, Hythe, Dover and
Sandwich. Later, the towns of Rye and Winchelsea became members. The con
federation may have owed its origin to autumn herring fishing expeditions on the
river Yare, a project in which all the towns took part.
The towns, between them, provided ships for the medieval English navy,
sixty in all, to serve for fifteen days. In return, the citizens of each town were
called "barones", although not considered as peers of the realm. The princi
pal officer of the Cinque Ports was called the Lord Warden and was possess
ed of considerable powers. These were bound to wither with the inauguration
of a permanent navy but in the middle ages, when the crown needed the ships
of the confederation, kings were prepared to go to almost unlimited lengths
to assure it.
Local eyres were excluded from the ports. The courts of the league were
exempt from the jurisdiction of the Admiralty. Decisions of the courts in
the palatinate, for the league really did possess palatinate jurisdiction, could
only be reversed in the court of the Lord Warden. Not until 1856 was the
civil jurisdiction of the Lord Warden removed, so powerful was his hold.
His admiralty jurisdiction survived for a few years more, until 1869. Then,
most of it went to the county courts, but he still retained the right of appeal
from the county courts to which his powers went.
The Admiralty Court, naturally, did not take its model from Common
Law procedure but from Civil Law. This the merchants from abroad could
understand. They also liked the Admiralty seeking advice from their own group.
The law upon which the Admiralty was founded was the law of Oleron,
which can be found included in the famous Black Book of the Admiralty."
Trial by jury did not develop: there was trial by witness instead.
Admiralty jurisdiction was widened to include not only the discipline of
the royal fleets but also the disciplining of other ships who broke the code of
Oleron. The Admiralty also looked after the rights of the crown at sea. The
court was concerned, therefore, with prizes, with flotsam, jetsam, etc. It
judged fights and quarrels on the high seas and also on tidal rivers below
the first bridge. In the field of civil jurisdiction it was assigned commercial
contracts entered into abroad.
However, there were soon reductions. The reigns of Richard II and
Henry VIII saw the Admiralty violently assailed. In 1536 the Common Law
courts obtained by statute the criminal jurisdiction of the Admiral. As the
statute concerned put it,
"before any judgement of death can be given against the offenders, either they mutt plainly
confess their offences (which they will never do without torture or pains) or else their
offences be so plainly and directly proven by witnesses indifferent, such as saw their of
fences committed, which cannot be gotten but by chance at few times, because such offenders
commit their offences upon the sea, and at many times murder and kill such persons being
in the ship or boat where they commit their crime, which should witness against them in that
behalf; and also such as should bear witness be commonly mariners and ship men, which,
because of their often voyages and passages in the seas depart without long tarrying."
"Holdsworth, History of English Lav, v. 121-3 gives a summary of the laws of Oleron.
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Criminal offences from now on were to be tried by a commission and the
persons nominated in the commissions came to be always the judges of the
Common Law courts. As a result, Common Law received the criminal juris
diction of the Admiralty.
Still, Admiralty civil jurisdiction remained impressive. It comprised
"All contracts made abroad, bills of exchange (which at this point were for the most part
drawn or payable abroad), commercial agencies abroad, charter parties, insurance, average
freight, non-delivery of, or damage to, cargo, negligent navigation by masters, mariners or
pilots, breach of warranty of seaworthiness, and other provisions contained in charter parties;
in short, every kind of shipping business . . . ""
That this wide jurisdiction would be attacked by the Common Law courts was
almost certain when these courts began to question the jurisdiction of the
Council and of the Chancery in the reign of Elizabeth I.
There were various methods by which the Common Law courts could hope
to draw in Admiralty cases, the most effective of which, finally, was found
to be the writ of prohibition. However, for success against Law Merchant in the
Admiralty and in the petty local courts of piepowder Common Law had cer
tain adjustments to make. The most important of these concerned venue.
Medieval Common Law had strict rules here. Contracts made or designed
to be implemented within England had always received its cognisance, but not
contracts entered into abroad or contracts to be made good abroad. As we
have seen, no jury could determine the facts about foreign-made and foreign-
implemented contracts.
This rigidity was finally overcome by one of those many fictions in the
productions of which English Common Law has been so fertile. Judges began
to distinguish between transitory and local actions. Actions were transitory
if the case really had no necessary connection with a particular place or area.
If this was so the action of the case was arbitrarily placed in England. As
Holdsworth put it, "a plaintiff in any transitory action was now able to trans
port to Cheapside any act done in any part of the world.""
Armed with this fiction, Common Law judges were able to fight the Ad
miralty. Sir Edward Coke, particularly, seems to have hated the Admiralty,
claiming that "Law Merchant is part of the Laws of this Realm" and was the
business of Common Law alone.
In his Fourth Institute Coke considered the Chancery, the Court of Star
Chamber, Chancery and the Admiralty. These he described as "high and
honourable tribunals". However, he hoped that they would "prosper and
flourish in the distribution of justice" only if they "derive all their power and
strength from their proper roots." To Coke, their proper roots were to be
found in statute law which the Admiralty certainly used but from it hardly
drew its principal jurisdiction.
Bacon, in his attack upon Coke entitled Innovations into the Laws and
Government, stated that, against the Admiralty, from Coke, J., "prohibitions
fly continually, and many times are cause of long suits, to the discontent of
"Select Pleas of the Admiralty (S.S.), i. lxvii.
"Holdsworth, History of English Law, v. 142.
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foreign ambassadors and to the King's dishonour and trouble by their re
monstrances."
It is rather surprising that the most recent biography of Coke, The Lion and
the Throne, by Catherine Drinker Bowen, hardly mentions Coke's long struggle
with the Admiralty.1' Holdsworth, however, docs speak of this feud at con
siderable length:
"Coke, ns Bullcr, J., once said, 'sjems to have entertained not only a jealousy of, but an
enmity against, that jurisdiction.' He denied that the court was a court of record. He
denied it the necessary power to make stipulations for appearance, and performance or the
acts and judgements of the court. He denied that it had any jurisdiction over contracts made
on land, either in this country, or abroad, whether or not they were to be performed upon the
sea; and similarly he denied its jurisdiction over offences committed on land, either in tnu
country or abroad."18
The fact that the Admiralty, which had absorbed the ancient commercial code
of Oleron and did seek counsel from the merchants, was far better suited than
the Common Law to deal with many suits mattered not at all to Coke. He
sought to restrict the Admiralty Court to contracts made super altum mare.
Coke did not succeed. However, between 1575 and 1632 the Common Law
courts did obtain concurrent jurisdiction with the Admiralty: that is, they
could deal with what had been Admiralty commercial cases if plaintiffs chose
to sue in Common Law courts. After that, they once more took up the offen
sive. The success of that offensive cannot be attributed to the wish of the mer
chants: it reflected the political triumphs of the period.
However, even if success now came, Common Law found it impossible to
ignore the fact that there was a separate merchant custom. Coke had said that
"Law Merchant is a part of the laws of this realm" but it remained for later
judges to make this statement really true.
Merchants in the Common Law courts were allowed to plead merchant
custom. From that custom the judges had to construct a common law mer
cantile code. They rejected the customs that seemed to them unreasonable;
they decided particular commercial cases as best they could, but always gave
importance to old merchant custom. In the end, by the time of Lord Mans
field in the eighteenth century, that judge could state with some truth that
fusion had taken place.
Nevertheless, the Admiralty Court survived and, at a later date, in the
nineteenth century, managed to re-acquire some of its lost powers. As a
result of the Judicature Act of 1875 it became a part of one of the five
divisions of the High Court of Justice, the Probate, Divorce and Admiralty
Division. Most European countries have a commercial code which combines
maritime with commercial law. England, because of the developments out
lined above, does not. Admiralty law, particularly, still shows that much of it
did not have a really native origin.
"Op. at., Little, Brown and Co., 1956. Miss Bowen does give the quotations noted above.
"Holdsworth, History of English Law, i. 553.
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