The Commercial Code of Japan/Historical Introduction

Commercial law as a separate branch of the greater body of civil law began to assume doctrinal distinctness in mediæval times, though the origin of maritime law may be traced to Phœnicia, Carthage, Greece, and other ancient countries along the eastern coast of the Mediterranean Sea, whence provisions for commercial paper, general average, and the liability of the master of a ship found their way to the Roman law. There were three causes from which the commercial law was recognized as special law: First, owing to the impetus given commerce by the League of the Lombard Cities, the League of the Rhine, and the Hanseatic League, together with the resulting notable prosperity of many cities in northern Europe and in Italy after the Crusades, business transactions became more complicated, the old Roman law became inadequate when applied to new cases, and consequently commercial customs, ex necessitate, attained the force of law in all the great marts. Second, under the feudal system, traders at fairs and markets being treated as a special class of people, usually called collegia mercatorum, had their own special legislature, special jurisdiction, and therefore special jurisprudence, named jus mercatorum. Thirdly, since the rules of the canon law, especially those relating to the prohibition of usury, ​were too rigid and inflexible, it was necessary to have a law more equitable. All these factors contributed to the growth of what in time came to be recognized and called Commercial Law.

The commercial law mentioned above was no more than the customary law prevailing in different countries, but not codified. France was the first country to have a commercial code. Early in 1673 the famous ordonnance of Louis XIV, entitled Le Code des Marchands, was issued. It consisted of one hundred and twenty-two articles, divided into Commerce in General, Bills and Notes, Bankruptcy, and Commercial Jurisdictions. This ordinance was also called Code Savary, because it was written by Jacques Savary, an expert merchant. In 1681 another code, called the Ordonnance de la Marine, was promulgated. It was considered the most excellent code at the time of Louis XIV, and was welcomed by all the countries of Europe. By the beginning of the nineteenth century, the Code des Marchands and the Ordonnance de la Marine had become overshadowed by doctrinal development, and changed methods of business called for a restatement of the principles of commercial law.

In 1808 the present French Commercial Code went into effect. It consists of four books—Commerce in General, Marine Commerce, Bankruptcy, and Commercial Jurisdictions. Since the French Commercial Code was the only commercial code at the beginning of the nineteenth century, the accomplishment of that code was a great revolution in the legal world. Every country in Continental ​Europe was more or less, directly or indirectly, affected by this code. So far as the military force of Napoleon extended, the French Commercial Code had its influence.

Germany, however, had an independent system of commercial law. Before the confederation of the German states, Prussia had already had a code called Das allgemeine Landrecht. It was a voluminous code, containing civil law, general law, and even public law, but many of the provisions dealt with causa mercantilis, especially the Law of Bills and Notes and Marine Commerce. This code was promulgated and enforced in 1794, and some Germans insist that it was the oldest commercial code in the world. It was the local law of Prussia and not the federal law of Germany. Indeed, there was then no “Germany.” The “Germanic Confederation” of 1814 was not pan-Germanic, and achieved little more than a name until it evaporated in 1867, when the “Confederation of the North” eliminated Austrian influence and laid the ground for the real German Empire in 1871. In 1847 the Law of Bills and Notes was passed by the representatives of the states, but was not adopted by any considerable number of the states until 1862. In 1861 the old German Commercial Code was passed, but was not adopted by the states composing the Confederation of the North until 1869. The old German Commercial Code consisted of four books: (1) Traders, (2) Commercial Associations, (3) Commercial Transactions, and (4) Marine Commerce. The present German Commercial Code of 1897 is based on this ​code, but has made a considerable change; the new code does not recognize absolute commercial transactions as does the French Commercial Code, but recognizes a trader as the centre of causa mercantilis. In 1877 the Law of Bankruptcy was passed as a special statute. It is applicable to all traders and non-traders; whereas in France, such law of bankruptcy is only applicable to traders.

After the passage of the old German Commercial Code, European countries began to adopt the German system instead of the French system. Some still adhered to the old French theory, and some tried to combine the two theories. Thus, in the present world (except in England and the United States, where the development of law is independent of Continental Europe, and where there is no judicial or legislative difference between the civil law and commercial law), there are three systems of commercial law,—French system, German system and Franco-German system.

This system includes the old commercial codes of Italy, Belgium, Spain, and Portugal, and the present commercial codes of Holland, Luxemburg, and those countries in Central and South America which have adopted the old Spanish Commercial Code.

Italy has contributed many commercial customary laws to the world. Before the adoption of the old Codice di Commercio, there were different laws in different states. The old code was promulgated ​in 1866 and was chiefly derived from the French Commercial Code.

Belgium became subject to the French Commercial Code of 1808 at the same time as France, of which it was territorially then a part, and after the fall of Napoleon in 1814 retained it; but after the separation from Holland in 1830 several statutes were passed by which the French Code was more or less revised, the several acts while of different dates being designated as books of the revised Commercial Code.

Spain, as early as 1737, in the reign of King Philip V, had a commercial code which was based on the Code des Marchands and the Ordonnance de la Marine of France, as well as the customary law of Spain. In 1829 the old Codigo de Commercio was passed and became effective January 1, 1830. It consisted of five books: (1) Traders and Agents; (2) Commercial Transactions; (3) Marine Commerce; (4) Bankruptcy; (5) Commercial Jurisdictions. But in 1868 Commercial Jurisdictions were abolished. Though this code was chiefly derived from the French Commercial Code, it took many provisions from the King Philip’s Code of 1737. The Spanish Code of 1829 is the basis of the mercantile law now prevalent in many countries of Central and South America, such as Brazil, Chili, Peru, Honduras, Nicaragua, etc.

Portugal first had a commercial code in 1833, called Codigo Commercia Portugues. It was divided into two books,—the Land Commerce and the Marine Commerce. It was based on the commercial codes of France, Spain and Holland, and also the Prussian Code of 1794.

​Holland became subject to the French Commercial Code in 1811 after the country had been annexed to the French Empire, but after the restoration of 1813 modifications ensued, and in 1817 commercial jurisdictions were abolished. In 1838 the Wetboek van Koophandel was promulgated and enforced. It is divided into three books, which are identical with the first three books of the French Commercial Code. But in the Dutch Code there are provisions for insurance other than marine insurance and for commercial vessels sailing on rivers, lakes and harbor waters. In 1893 the law of bankruptcy was revised. It is applicable to all traders and non-traders, as in Germany.

Luxemburg still uses the French Commercial Code as its own code without alteration.

This system includes the commercial codes of Austria, Hungary, Switzerland, and the commercial law of Scandinavia, etc.

In 1850 Austria adopted the Law of Bills and Notes, which was passed by the representatives of the federal states of Germany. The old German Commercial Code was also adopted to take effect in 1863, excepting the book on Marine Commerce; for Austria already had its own customary law concerning marine commerce. This law chiefly deals with marine police and it has never been codified. The Law of Bankruptcy was passed in 1868 as a statute. It is based on the law of bankruptcy of Prussia and is applicable to all traders and non-traders.

​Hungary, having had a complete body of commercial law of its own until 1850, and after that year having submitted to various legislation dictated by Austria, which was found unsuitable, had a commission prepare a code in harmony with the usages of the people, and the law thus prepared was promulgated in 1861 and from time to time afterwards was revised. A new code was published in 1875. The first book deals with traders and business associations, the second book deals with commercial transactions; but, as in Austria, there are no provisions for marine commerce. However, there are provisions for warehousing, associations and contracts of insurance other than marine insurance. The Law of Bills and Notes was enforced in 1877, and the Law of Bankruptcy in 1881, both being of German origin.

Switzerland, like England and the United States, does not recognize the difference between civil and commercial law; but it has a code called Code fédéral des obligations, passed in 1881. This code provides for ordinary contracts, obligations, transfer of property rights, and the general principles applicable to both civil and commercial transactions.

The present code commission, however, has already drafted a new book on the subject, to be added to the four books adopted in 1909, to take effect as parts of the new code on January 1, 1912.

The commercial law of Scandinavia is not codified. Denmark is governed by the modified general code of Christian V, published in 1683 (Danske Lov); Norway by a general code promulgated in 1867 ​(Norske Lov), which is largely a copy of the Danish Code, and Sweden by the general code of 1734, composed of a collection of Swedish acts and the Danish Code as then amended. In all those countries, however, the deficiencies of their general codes have been supplied by later special laws upon associations, bills of exchange, bankruptcy and other features of commercial law.

This system includes the present commercial codes of Italy, Spain and Portugal, as well as the new commercial codes of Roumania and Argentine. The commercial law of Russia partakes largely of this system.

The present Commercial Code of Italy was promulgated in 1882 and enforced in 1883. Though this code contains the law of bankruptcy and of commercial jurisdictions according to the French style, its substance is mainly derived from the old German Commercial Code. Indeed, it abstracts the excellence of both the French and the German codes. Besides this, there is a separate code called Codice par la marina mercantile, which consists of public law concerning maritime affairs.

The present Commercial Code of Spain was promulgated in 1885 and extended to the island passessions in 1886. It is divided into four books: (1) Traders and Commerce in General; (2) Commercial Contracts; (3) Marine Commerce; (4) Bankruptcy and Commercial Prescriptions.

The present Commercial Code of Portugal was promulgated in 1888 and enforced in 1889. It is ​divided into four books as the present Spanish Commercial Code, and is chiefly derived from the present Italian Commercial Code and the Belgian Commercial Code.

The new Commercial Code of Roumania of 1887 is modelled on the present Commercial Code of Italy.

The new Commercial Code of Argentine of 1889 is modelled on the present Commercial Code of Portugal.

Russia has a code called Svod Zakonov, enforced in 1835, although provision for a separate commercial jurisdiction was authorized in 1833. Its eleventh book deals with commercial law. This book consists of five volumes: (1) Commercial Rights; (2) Commercial Obligations, including Bills and Notes; (3) Commercial Vessels; (4) Commercial Jurisdictions, including the Bankruptcy of Traders; (5) Commercial Institutions, including Exchange, Brokerage, and Commercial Books. These provisions were developed from the time of Peter the Great. In 1857 a revision of the Code of 1835 was published and a part designated as Ustav Torgovi, the Russian words for “commercial law.” This law is not applicable to Poland and Finland, the former using the French Commercial Code, the latter having its own customary law, its civil code of 1734 and subsequent special statutes.

The three systems of commercial law mentioned above are all directly affected by the Roman system of law, though the Roman law only recognized the difference between jus civile and jus gentium, and ​in those days commercial law had not much developed. The influence of the Roman system of law is now not only felt in the Western world, but has extended to the Eastern world.

Japan is the first Oriental nation to adopt the Occidental law. In Japan, as in other Oriental countries, private law was in a very undeveloped state, and the people transacted their business with each other according to customs and usages, which were not identical in all parts of the country and were not necessarily enforced by the courts. In 1880 the Japanese government employed a German, named Reusler, to compile a Japanese commercial code. This was completed and promulgated in 1890, and is known as the First Japanese Commercial Code. The law of commercial associations, of bills and notes, and of bankruptcy, which constituted a part of the code, was enforced in 1893, and the rest of the code was enforced in 1898. When this code was compiled different foreign commercial codes were consulted, especially the German Commercial Code of 1861, the French Commercial Code of 1808, the Italian Commercial Code of 1865, and the Spanish Commercial Code of 1830. As the compiler of this code was a German, he naturally took many of its provisions from the old German Commercial Code, yet the fact that the code included the law of bankruptcy and the law of bills and notes showed the influence of the French system. Indeed, the First Japanese Commercial Code belonged to the Franco-German system.

But there were many defects in this code: First, the old Japanese customs and usages not being very ​much consulted, in some points it was not adaptable to the Japanese business conditions. Second, as it contained public regulations concerning insurance business and commercial vessels, it confounded the public and private law; and again, as it included procedural provisions, it also confounded the adjective and substantive law. Third, since the First Japanese Civil Code was compiled by a Frenchman, and was modelled on the French Civil Code, many provisions of the Commercial Code were contradictory to those of the Civil Code, and besides there were many redundant provisions in the two codes. For these reasons, the First Commercial Code was afterwards revised, and in 1899 the present Commercial Code was promulgated and in the same year enforced. The present code is based entirely on the German system, especially the German Commercial Code of 1897, though a few points, such as the insertion of the Law of Bills and Notes in the code, the recognition of the difference between absolute and relative commercial transactions, the adoption of two warehouse receipts, etc., are different from the German Code; and as to business associations the French theories have been retained. With the enforcement of the present code, the First Commercial Code was abolished, except the law of bankruptcy, which is still in force. The law of bankruptcy in Japan, as in France and Italy, is applicable only to traders.