Front Page Titles (by Subject) chapter 7: A Greek Lawsuit - The Story of the Law
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chapter 7: A Greek Lawsuit - John Maxcy Zane, The Story of the Law 
The Story of Law, 2nd ed., Introduction by James M. Beck. New Foreword, Annotations, and Bibliographies by Charles J. Reid, Jr. (Indianapolis: Liberty Fund 1998).
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A Greek Lawsuit
In order to see the Athenian law in action, it will not be out of place to give some life and reality to a particular lawsuit. We know something of it because one of the parties hired Demosthenes to write a speech for him to deliver to the Athenian court where the case was tried. It arose under a law which in effect provided that merchandising loans at Athens must be made on merchandising to or from Athens. A law read: “It shall not be lawful for any Athenian or any alien residing at Athens or any person under their control to lend out money on a ship which is not commissioned to bring goods to Athens.” Another law prohibited any person resident in the Athenian State from transporting grain direct to any harbor but the Piraeus. These laws governed the whole Delian League under the Athenian supremacy and the Athenian colonies and dependencies long afterwards, though sometimes Athens allowed the contrary to be done. Wardens were kept at Sestos in the Dardanelles to enforce this law against all passing ships.
The Greek trader was generally a merchant adventurer who was advanced money—or financed, as we say—by some man of means at Athens. The contract generally described what the voyage should be, and determined the goods that were to be the subject of the speculation. This commerce made Athens, city-state as it was, a great cosmopolitan center. It is needless to say that the harbor at Athens was thronged with vessels and the returns upon this commerce enriched all classes at Athens. In those days an Athenian named Demon, who was an uncle of the orator Demosthenes, was a man of property at Athens, and he had a lawsuit in regard to goods purchased on such a loan. The circumstances that were disclosed were sensational enough to satisfy the yearnings of a yellow sheet. The case is remarkable for showing that the active trading Greek was then, as he is to-day, often more or less of a rascal. Surroundings may change, but human nature is the one unchangeable thing in this hoary old world. It was true then, as now, of the Greeks:
The Romans, with their sound character, had little respect for Grecian honesty. Cicero, the unfailing eulogist of Greece, felt this want of moral stamina when he said: “I grant them all manner of literary and rhetorical skill, but that race never understood or cared for the sacred binding force of testimony given in a court of law.” To the Roman, the hungry little Greek rascal became proverbial.
Even after Athens lost her primacy at sea, she yet had a large accumulated capital for merchandising and she took care by her laws, as has been stated, that all merchandising on Athenian money and of the cities that she controlled should subserve Athenian commerce, and that every lawful merchant venture at sea should favor Athens as a distributing point for the goods of the eastern and western Mediterranean and for those brought from the Black Sea, which they called the Euxine.
The support of the population of Attica required large importations, especially of grain from Sicily or other points, and such ventures were required to be financed. The capitalist with money to lend was not prepared to trust his body to the treacherous seas. The trader who was ready to risk his life in commerce had no money or capital. The foreign dealers with goods to sell would not extend credit to an Athenian, any more than to-day a foreigner would trust an American importer. The man who carried on trade by borrowing the capitalist’s money and by paying the borrowed money as cash to the seller operated then much as he would operate to-day. Although, then as now, the importer was sometimes a rascal, we may call him by the dignified term of merchant adventurer.
Such a merchant adventurer was Protus at Athens. He applied to the capitalist Demon for a loan to finance a shipment of grain from Syracuse to Athens and obtained the money for that purpose. The amount of the loan Demosthenes does not betray in the speech he wrote for Demon, but we may suppose it to be large, for the shipment took the whole vessel. It does not appear that Protus took goods bought with Demon’s money out to Syracuse and converted them there into cash with which to buy the grain. It would seem that he simply took out Demon’s money on the empty vessel.
It must be noted, also, that in those days of small vessels a responsible carrier was not easy to find, and it would seem that there was at that time no such thing as a bill of lading. Under the Babylonian law, the carrier of the goods gave a bill of lading and was responsible for every loss except that arising from the public enemy. At Rhodes and at Alexandria, in the next centuries, the carriers gave bills of lading and from that day to this the carrier has always receipted by bill of lading for the merchandise to be carried. Among the Greeks the owner of goods or his representative accompanied the goods as a “super-cargo,” because the Greek law had not developed a carrier’s liability.
To make sure of a vessel to bring the grain from Syracuse to Athens, an impecunious Greek colonial from Marseilles, named Hegestratus, who was at Athens with a vessel, was engaged to bring the grain from Sicily. Hegestratus promptly mortgaged his vessel and, no doubt, the freight to be earned, in order to fit out his vessel with tackle and supplies and to obtain money to pay the crew. The crew appear to have been men from Marseilles.
We may picture Protus setting out from Athens on his voyage in the ship skippered by Hegestratus and arriving at Syracuse. There he bought a shipload of grain, paid the export duties and loaded his grain upon the ship. While Protus was waiting for the vessel to sail, and probably wine-bibbing at a convenient wineshop, boasting loudly, like a true Athenian, of the wonders of Athens and refreshing himself after the arduous labors of superintending the slaves in loading, Hegestratus, the unscrupulous colonial, tried to improve his time by looking for some personal gain from rascality. His vessel was mortgaged. All he could look for was the freight money. He did improve, or rather misemploy, his time by finding a person at Syracuse named Zenothemis, and represented to Zenothemis that he had a ship lying in the harbor laden with grain that he was about to take to Athens. Hegestratus asked Zenothemis to obtain for him a loan on the cargo, offering a commission. He, no doubt, took Zenothemis and showed him the ship with the grain in it.
In spite of the abuse of Zenothemis in the speech which Demosthenes wrote for Demon to deliver—a feature without which an Athenian oration would be unrecognizable—it seems probable that Zenothemis believed the grain on the ship to belong to Hegestratus. Zenothemis at any rate represented Hegestratus to Syracusan capitalists to be the owner of the load of grain and obtained for Hegestratus a loan from them upon the cargo. Hegestratus does not appear to have given a mortgage on the cargo of grain, and Zenothemis accompanied the cargo to protect his principals. Hegestratus promptly sent to Marseilles the money obtained by this fraudulent transaction. But it is evident from the speech that the cargo was at the risk of the Syracusan money lenders and that the payment of the loan was contingent upon the arrival of the cargo at Athens. Every man at this time was his own insurer, and the liability of Protus to Demon was likewise contingent upon the safe arrival.
It is impossible to suppose that the Zenothemis loan furnished the money to purchase the grain, for in that event Hegestratus would have had no money to send to Marseilles. He could not have made a single drachma if the loan bought the cargo. Protus, of course, paid the port dues on export, but the idea that he was given a receipt or document therefor which would prove the fact is not tenable. Such proof would probably mean nothing to such expert forgers as Greeks.
We should now state the character of the loan that Demon had made to Protus. The contract is not set forth in the speech but it was, mutatis mutandis, like the contract set forth in the speech against Lacritus, among Demosthenes’s orations. That contract, regarding a trading venture to the Euxine, recites the loan made to the trader to be invested in casks of wine at Mende in Thrace, to be laden in the twenty-oared galley of Hyblesius. The goods to be purchased are by the contract hypothecated to the lender with a covenant by the borrower that no money should be owing on those goods at the time of purchase and that no further money would be borrowed on them by the trader. The goods were to be sold in Pontus on the southern shore of the Black Sea, and other goods were to be purchased with the avails for the return voyage to Athens. If the goods were brought safely to Athens, the borrower within twenty days of arrival (in which period doubtless there would be time to sell the goods) should reimburse the loan to the lender with twenty-two and one-half per cent interest, without any abatement except for jettison (i.e., goods thrown overboard to save the vessel). Upon the arrival of the goods they should be delivered to the lender until the money borrowed had been paid, and if the money should not be paid as provided, the lender might sell or pledge the goods, and if there should be any deficiency in the proceeds to pay the loan, should have execution for the deficiency against the borrower. This transaction means, of course, that Protus and Demon together would sell the grain at Athens.
Any one will note that the necessities of the commerce dictate the contract. Marine insurance was unknown until it was invented at Rhodes in the form of reciprocal insurance, which has become in late years so common among us. The risks of navigation could not be obviated by insurance and the lender took the risk of shipwreck or jettison. The lender thought nothing of the borrower’s ability to pay but looked to the goods. As soon as the goods were purchased and ascertained they became at the risk of the lender, and the goods were dedicated to the loan. In the meantime the borrower, though in possession, is in possession as the representative of the lender, and the contract creates a pro forma hypothecation. The goods are in fact the goods of the lender, for as soon as it is possible they are delivered to him, but for twenty days or longer the borrower can sell them to realize the loan. They are sold apparently as the goods of the lender. The Greek law or any other intelligent system of law, except certain law of a “country town” type, would see no objection to the borrower having the power of sale as agent of the lender. Out of the proceeds the loan is to be paid, any excess of proceeds over the loan and interest goes to the borrower, and any deficiency is paid by the borrower.
The Protus contract with Demon differed from the Lacritus contract in that no purchase of goods and conversion thereof into other goods was provided for. It will be seen that the Greek law recognized a mortgage of the vessel, a hypothecation or pledge of goods, and a special contract of merchandising for the protection of the lender of money to be used for the express purpose of investment in particular goods, on the principle that the goods purchased shall realize the loan. It is the same principle as the equitable one that he who pays the purchase money owns the thing purchased, which comes out of the Roman law. It is a common thing in modern business for a banker to buy a draft with a bill of lading attached, and upon acceptance of the draft to deliver the goods in the bill of lading to the drawee of the draft to dispose of as the agent of the banker, but without any power to the drawee to store the goods or to treat them as his own. As it was in Greek law, this title is good in the banker.
It is apparent that when Hegestratus represented himself to be the owner of the cargo and obtained a loan from Syracusan money lenders upon the cargo, he probably had no criminal intention of casting the vessel away, but as with Tito in Romola, one rascality led to another. He intended to swindle the Syracusans and to get away from the vessel before it reached Athens. Hegestratus could not appear with his ship at Athens, for his fraud would be at once exposed. Probably he intended at some point before arriving at Athens to decamp, leaving his vessel to the mortgagees, and the cargo to be fought over by Protus, representing Demon, and Zenothemis, representing the Syracusans. Hegestratus’s money was safe at Marseilles, and he expected to reach there and enjoy his ill-gotten gains. There being no extradition laws, he need not trouble himself about pursuit. Possibly he could restore some dilapidated temple, repent of his evil deeds and the priests would enable him to die in the odor of sanctity at peace with the gods.
This was the situation when the vessel sailed from Syracuse. A cargo of grain was on board and certain passengers were accommodated with passage. Protus and Zenothemis were two of the passengers. They were watching over the same cargo, but representing hostile interests. Hegestratus must have been a shallow-pated fool to suppose that two Greeks could keep silent about their business. Zenothemis soon learned that Protus owned the cargo, and at once Zenothemis compelled Hegestratus to give him a writing. What it was, the speech does not say, but it was probably a conveyance outright of the cargo and it was lodged in Greek fashion with a passenger. This paper Hegestratus could very well give, because he never intended to dispute the cargo, or for that matter the vessel, with any one. When he obtained the Syracusan loan and dispatched the money to Marseilles he had exhausted his field of illicit profit.
It now dawned on Hegestratus that if he could sink the vessel he would be rid of his troubles. Probably he felt that Zenothemis and Protus would keep a strict watch on him so that he could not get away, unless in the confusion of a sinking. He imagined that if he could sink the vessel, the cargo would cease to exist and all contention would be at an end, because the loss of cargo would end the Protus property as well as the Syracusan loan. He was benevolently saving Protus and Zenothemis from the burden of a Greek lawsuit. Hegestratus waited until the ship was close enough to the island of Cephallenia to let all escape from a sinking vessel, and there he put his brilliant plan into execution.
One night he left the garlic-scented Greeks snoring on the deck, went below and proceeded to cut a hole in the bottom of the vessel. He seems to have been a clumsy imbecile, for the noise he made betrayed him and, when detected, he rushed on deck and, knowing a boat was being towed astern, jumped for the boat, intending to cut it adrift and thus get away. But in the darkness he missed the boat and was drowned. As the Greeks would say, the goddess Nemesis was dogging his footsteps. By the exertions of the passengers and the crew, stimulated by rewards offered by Protus, the ship was saved and brought into the harbor of Cephallenia. Here Zenothemis went into alliance with the crew who were from Marseilles, and insisted that the vessel should be navigated to Marseilles. Athens, of course, was the one place on the Mediterranean that Zenothemis did not desire the ship to reach, and he no doubt thought that on the voyage to Marseilles the ship would put into Syracuse, where an appropriation of the cargo to the Syracuse loan would be easily obtained.
It is likely that the repairs of the vessel took some time; perhaps it was necessary to unload it. In the meantime Protus appealed for help to Demon at Athens. Demon sent out a pettifogger named Aristophon, said to be of the Council. He had been paid by the side that hired him and sent him out, and was ready to earn another fee on the opposite side. Zenothemis appears to have bought him up at once; but in spite of all they could do, the Cephallenian authorities decided that the ship must proceed to Athens, whither she was bound. They enforced the decision. So we may suppose the vessel rounding the treacherous capes of the Peloponnesus and arriving at the Piraeus with the disputed cargo. The three precious rascals, Protus, Zenothemis and the pettifogger, were on board, but missing was the chief rascal Hegestratus, whose Nemesis had found him out.
Upon arrival the mortgagees of the vessel took possession of the vessel and Protus took possession of the grain. Thereupon Zenothemis claimed that he was in possession of the cargo. The archaic Greek procedure probably required self-help to the extent that Zenothemis could insist upon being removed by a fiction of force and that he could require that the actual owner, the one entitled to the possession, should remove him. He refused to recognize Protus as owner, and thereupon Demon took possession and removed him. Enough appears from the speech to show that the Athenian law treated Demon and not Protus as owner, and this would be the law to this day in a commercial country.
Demon and Protus proposed to Zenothemis that they should go before the authorities at Syracuse, and if it appeared that Protus had bought the corn and that the customs’ duties were paid by him, Zenothemis should be punished as a rogue; but if it proved otherwise, he should receive the corn and his expenses and damages to the amount of a talent. Naturally Zenothemis refused this absurd offer, for he was no rogue in his own eyes, even if he had been deceived by Hegestratus. So Demon took possession and was sued. The curious thing is that Zenothemis, to be on the safe side, brought two actions, one against Protus and another against Demon. It is certain that the one against Demon was under a special statute giving jurisdiction as to merchandising to and from Athens. The other action against Protus was probably another kind of action, but what it was is problematical.
While these two actions were pending, the price of wheat fell at Athens so much that Protus no longer had any profit, but was confronted by an execution for a deficiency. Demon made this plain to him, as the speech confesses. Protus, being a Greek, thereupon naturally dealt with Zenothemis as his only chance for profit. It was made worth Protus’s while to abscond and Zenothemis promptly took judgment against Protus by default. Demon was now without the evidence of Protus to show that Demon’s money bought the grain at Syracuse, and this fact made Demon’s case less certain. He would find trouble, too, in the consideration that by the default judgment against Protus, Demon’s title was made questionable at least to a jury. So it became necessary for Demon to hunt for a technicality, unless he was prepared to go into court, relying upon truth and justice, and this would not occur to any Athenian save Socrates, who suffered death for his temerity.
The fact that the dead Hegestratus could not possibly have bought the shipload of corn was the controlling fact. Zenothemis claimed title solely through Hegestratus, who had no title and could give none. The controlling fact is not even referred to in the speech. It is urged in the speech that Zenothemis on shipboard obtained a writing from Hegestratus, that he tried to divert the ship to Marseilles, that he made some arrangement with Protus for the default, and did not detain Protus as he could have done, and such like trivial matters, but the one controlling fact of Hegestratus’s inability to buy any corn or even to outfit his ship is not urged, nor is it shown that if Protus had not in fact bought the grain, Hegestratus could not have realized anything from the Syracusan loan. It is plain that if Hegestratus had not gotten a loan in Syracuse on corn of Protus already laden, he would have made no money and would have had no motive for casting away the vessel. This point seems to have evaded Demosthenes.
The action of Zenothemis against Demon, being under the statute, was required to be based on a merchandising venture to or from Athens or both, and it is difficult to see how a grain-loan made at Syracuse or a sale on the high seas fell under the terms of the law. This is what Demon pleaded as a technical defense. It was his only plea apparently, and perhaps a defendant could plead but one defense. This plea, where the difference between issues of fact and issues of law was not provided for in the procedure, went to the jury, who would decide upon the whole controversy.
Upon the trial the actual defense pleaded under the statute was merely stated in the speech for Demon and then the orator proceeded to argue that Zenothemis had no merits on the facts. It was, of course, utterly immaterial to the pure legal defense pleaded whether Zenothemis had the property right in the grain or not. The speech is confused and we have not all of it. Instead of relying upon the actual facts showing a plain, straightforward case, the orator attempts to show that from the beginning at Syracuse Zenothemis was in a scheme with Hegestratus to defraud Protus and Demon. But this was not tenable under the actual facts. The result is a case so muddy that it tends to show very clearly the confused, formless mode of a Greek trial. In the hands of a genuine pleader like Lysias, the case might have been much better and more strongly put. Demosthenes was essentially a politician, and after that a forensic speaker. He is never in any of his orations in law cases very clear as to his facts, probably because a politician looks at a law case in accordance with the prescription of Lear to the blind Gloster:
How the case turned out we do not know. Since Demon had a straightforward, honest case he was probably defeated before an Athenian jury. Zenothemis probably hired Aeschines to write a speech for him and thus obtained the services of one of the greatest oratorical prevaricators in history. Zenothemis appeared in rags, a pitiful object, a stranger in destitution. He said in his speech that his forbears were Athenians and that it was not his fault that he had not been born under the shadow of the Acropolis. He rapped out some fine phrases borrowed from Pericles upon the glorious City of the Violet Crown, and denounced the grasping money power personified in the respectable, if wealthy, Demon. Protus came in for a castigation. It is said that he had run away because he had been drunk all the time and had embezzled Demon’s money. It was claimed probably that the Syracusans’ money bought the corn to ship it to Athens and that the witnesses for Demon were all suborned. How he explained Hegestratus in accordance with this contention is a subject for a very vigorous imagination. Almost every Greek case seems to have a stale odor of rascality hanging around it.
As we have seen, this sort of transaction was originally provided for in Babylonia. Thence it passed to Asia Minor and on to Athens. The maritime loan ad respondentia, borrowed by the English from the older European commerce, is practically this contract. It appears in the Roman civil law, borrowed from the Greek. It passed with the commerce to the Genoese, the Pisans, the Florentines, and finally to Venice when she held “the gorgeous East in fee.” Wool was imported from England to Bruges in the thirteen hundreds on this kind of contract, and on money supplied by the branch houses of Venetian bankers. An instance will be shown hereafter. As the respondentia loan, it has long been a feature of the English law and most sedulously protected first in admiralty and by the chancellor, then by the common law, after judges of enlightenment pulled out some new mercantile stops in that old, broken-winded instrument.
In the course of time an improvement has changed the rule of risk to the lender. Marine insurance has enabled the lender to exact from the borrower the taking out of insurance for the lender to the value of the goods. There was no longer any maritime risk. In another respect there has been an improvement. The great mass of marine carriage is now conducted by responsible carriers. Their bills of lading are marketable. The bill of lading, symbolical of the goods, by its transfer passes title. The holder of the bill of lading is completely protected while the goods are carried. The lender, by having the bill of lading made out to him, by exacting insurance payable to him, is protected until the goods bought with his advance come to the port of entry. In the simple commerce at Athens the lender, being present at the port, could take possession of the goods and sell them if the borrower did not. He could in any event be present at the sale by the borrower and protect his ownership.
But the plain fact that the straightforward case of Demon must be pleaded on a purely technical defense, that a rascally skipper would dare to sell goods confided to his carriage, and that the purchaser of the goods from the skipper without any title at all could make such a strong defense, shows the law in one of its stages of most glorious uncertainty. It is no wonder that the Greeks by their contracts sought to avoid the necessity for any recourse to their courts. Yet even to-day the lender is always in peril. The Supreme Court of the United States once made a stupid decision that enabled the assignees of a fraudulent importer to prevail over an honest lender.1 The law was correctly held as to the lender’s title, but the decision was ruined by the extraordinary holding that the document which provided that the importer could receive possession of the goods as agents for sale, thereby gave an implied authority to the agent to take out warehouse receipts in his own name. The holding was that a document which provided that the agent for sale could take out documents of title for the account of the lender impliedly authorized the agent to take out documents in his own name. Probably an Athenian jury could have done better than our Supreme Court on this question. That decision was written by a justice,2 who is now practicing law, and it is to be hoped that in the practice he may have an opportunity to learn that a power of agency permitting the agent to take out a document of title for the account of his principal means, as it has, for almost a hundred years, been understood to mean, that the document is to be taken out in the name of the principal. One would think that a trade document in long use would have met inquiry as to the well-known usages of the trade.
[1. ]The case is Commercial National Bank of New Orleans v. Canal-Louisiana Bank and Trust Company, 239 U.S. 520 (1916).
[2. ]Chief Justice Charles Evans Hughes. Zane criticizes this opinion extensively in his article “A Modern Instance of Zenothemis v. Demon,” Michigan Law Review 23 (1925): 339, 353–56. —C. J. R., Jr.