Sentence:  "I like folks to be up and down and square," she began saying, as she vigilantly watched the effect of her culinary skill upon the awed little party. "Yes, I've got a regular hotel license; you bet I have. There's been folks <WSD>lawed</WSD> in this town for sellin' a meal of victuals and not having one." 
Meaning of the word marked with <WSD> tags:  To prosecute or sue (someone), to litigate.