Chapter 11

Self-acquired property, the second disintegrating agency, may be seen in Hindu law and also in Roman law. In Hindu law all property is normally and _prima facie_ household property. The burden is upon anyone who claims to be the individual owner of anything. But an exceptional class of property is recognized which is called self-acquired property. Such property might be acquired by "valor," that is, by leaving the household and going into military service and thus earning or acquiring by way of booty, or by "learning," that is, by withdrawing from the household and devoting oneself to study and thus acquiring through the gifts of the pious or the exercise of knowledge. A third form was recognized later, namely, property acquired through the use of self-acquired property. In the same way in Roman law the son in the household, even if of full age, normally had no property. Legally all property acquired by any member of the household was the property of the head of the household as the legal symbol and representative thereof. Later the head of the household ceases to be thought of as symbolizing the household and the property was regarded legally as his individual property. But Roman law recognized certain kinds of property which sons in the household might hold as their own. The first of these was property earned or acquired by the son in military service. Later property earned in the service of the state was added. Finally it came to be law that property acquired otherwise than through use of the patrimony of the household might be held by the son individually though he remained legally under the power of the head.

In the two ways just explained, through partition and through the idea of self-acquired property, individual interests in property came to be recognized throughout the law. Except for the institution of community property between husband and wife in civil-law countries, or as it is called the matrimonial property regime, there is practically nothing left of the old system of recognized group interests. And even this remnant of household group ownership is dissolving. All legally recognized interests of substance in developed legal systems are normally individual interests. To the historical jurist of the nineteenth century, this fact, coupled with the development of ownership out of possession, served to show us the idea which was realizing in human experience of the administration of justice and to confirm the position reached by the metaphysical jurists. Individual private property was a corollary of liberty and hence law was not thinkable without it. Even if we do not adopt the metaphysical part of this argument and if we give over the idealistic-political interpretation of legal history which it involves, there is much which is attractive in the theory of the historical jurists of the last century. Yet as we look at certain movements in the law there are things to give us pause. For one thing, the rise and growth of ideas of "negotiability," the development of the maxim _possession vaut titre_ in Continental law, and the cutting down in other ways of the sphere of recognition of the interest of the owner in view of the exigencies of the social interest in the security of transactions, suggests that the tendency involved in the first of the two propositions relied on by the historical school has passed its meridian. The Roman doctrine that no one may transfer a greater title than he has is continually giving way before the demand for securing of business transactions had in good faith. And in Roman law in its maturity the rules that restricted acquisition by adverse possession and enabled the owner in many cases to reclaim after any lapse of time were superseded by a decisive limitation of actions which cut off all claims. The modern law in countries which take their law from Rome has developed this decisive limitation. Likewise in our law the hostility to the statute of limitations, so marked in eighteenth-century decisions, has given way to a policy of upholding it. Moreover the rapid rise in recent times of limitations upon the _ius disponendi_, the imposition of restrictions in order to secure the social interest in the conservation of natural resources, and English projects for cutting off the _ius abutendi_ of the landowner, could be interpreted by the nineteenth-century historical jurists only as marking a retrograde development. When we add that with the increase in number and influence of groups in the highly organized society of today a tendency is manifest to recognize practically and in back-handed ways group property in what are not legal entities, it becomes evident that the segment of experience at which the historical jurists were looking was far too short to justify a dogmatic conclusion, even admitting the validity of their method.

It remains to consider some twentieth-century theories. These have not been worked out with the same elaboration and systematic detail as those of the past, and as yet one may do no more than sketch them.

An instinctive claim to control natural objects is an individual interest of which the law must take account. This instinct has been the basis of psychological theories of private property. But thus far these theories have been no more than indicated. They might well be combined with the historical theory, putting a psychological basis in place of the nineteenth-century metaphysical foundation. A social-psychological legal history might achieve much in this connection.

Of sociological theories, some are positivist, some psychological and some social-utilitarian. An excellent example of the first is Duguit's deduction from social interdependence through similarity of interest and through division of labor. He has but sketched this theory, but his discussion contains many valuable suggestions. He shows clearly enough that the law of property is becoming socialized. But, as he points out, this does not mean that property is becoming collective. It means that we are ceasing to think of it in terms of private right and are thinking of it in terms of social function. If one doubts this he should reflect on recent rent legislation, which in effect treats the renting of houses as a business affected with a public interest in which reasonable rates must be charged as by a public utility. Also it means that cases of legal application of wealth to collective uses are becoming continually more numerous. He then argues that the law of property answers to the economic need of applying certain wealth to definite individual or collective uses and the consequent need that society guarantee and protect that application. Hence, he says, society sanctions acts which conform to those uses of wealth which meet that economic need, and restrains acts of contrary tendency. Thus property is a social institution based upon an economic need in a society organized through division of labor. It will be seen that the results and the attitude toward the law of property involved are much the same as those which are reached from the social-utilitarian standpoint.

Psychological sociological theories have been advanced chiefly in Italy. They seek the foundation of property in an instinct of acquisitiveness, considering it a social development or social institution on that basis.

Social-utilitarian theories explain and justify property as an institution which secures a maximum of interests or satisfies a maximum of wants, conceiving it to be a sound and wise bit of social engineering when viewed with reference to its results. This is the method of Professor Ely's well-known book on Property and Contract. No one has yet done so, but I suspect one might combine this mode of thought with the civilization interpretation of the Neo-Hegelians and argue that the system of individual property, on the whole, conduces to the maintaining and furthering of civilization--to the development of human powers to the most of which they are capable--instead of viewing it as a realization of the idea of civilization as it unfolds in human experience. Perhaps the theories of the immediate future will run along some such lines. For we have had no experience of conducting civilized society on any other basis, and the waste and friction involved in going to any other basis must give us pause. Moreover, whatever we do, we must take account of the instinct of acquisitiveness and of individual claims grounded thereon. We may believe that the law of property is a wise bit of social engineering in the world as we know it, and that we satisfy more human wants, secure more interests, with a sacrifice of less thereby than by anything we are likely to devise--we may believe this without holding that private property is eternally and absolutely necessary and that human society may not expect in some civilization, which we cannot forecast, to achieve something different and something better.

VI

Contract

Wealth, in a commercial age, is made up largely of promises. An important part of everyone's substance consists of advantages which others have promised to provide for or to render to him; of demands to have the advantages promised which he may assert not against the world at large but against particular individuals. Thus the individual claims to have performance of advantageous promises secured to him. He claims the satisfaction of expectations created by promises and agreements. If this claim is not secured friction and waste obviously result, and unless some countervailing interest must come into account which would be sacrificed in the process, it would seem that the individual interest in promised advantages should be secured to the full extent of what has been assured to him by the deliberate promise of another. Let us put this in another way. In a former lecture I suggested, as a jural postulate of civilized society, that in such a society men must be able to assume that those with whom they deal in the general intercourse of the society will act in good faith, and as a corollary must be able to assume that those with whom they so deal will carry out their undertakings according to the expectations which the moral sentiment of the community attaches thereto. Hence, in a commercial and industrial society, a claim or want or demand of society that promises be kept and that undertakings be carried out in good faith, a social interest in the stability of promises as a social and economic institution, becomes of the first importance. This social interest in the security of transactions, as one might call it, requires that we secure the individual interest of the promisee, that is, his claim or demand to be assured in the expectation created, which has become part of his substance.

In civil-law countries the interest of the promisee, and thus the social interest in the security of transactions, is well secured. The traditional requirement of a _causa ciuilis_, a civil, i.e., legal, reason for enforcing a pact, gave way before natural-law ideas in the eighteenth century. Pothier gave over the contract categories of the Roman law as being "very remote from simplicity." Then came the rise of the will theory of legal transactions in the nineteenth century. French law made intention of gratuitously benefiting another a _causa_. The Austrian code of 1811 presumed a _causa_, requiring a promisor to prove there was none. And this means that he must prove the promise was not a legal transaction--that there was no intention to enter into a binding undertaking. In the result, abstract promises, as the civilian calls them, came to be enforced equally with those which came under some formal Roman category and with those having a substantial presupposition. Modern Continental law, apart from certain requirements of proof, resting on the same policy as our Statute of Frauds, asks only, Did the promisor intend to create a binding duty?

Likewise in civil-law countries the enforcing machinery is modern and adequate. The oldest method of enforcement in Roman law was seizure of the person, to coerce satisfaction or hold the promisor in bondage until his kinsmen performed the judgment. Later there was a pecuniary condemnation or, as we should say, a money judgment in all cases, enforced in the classical law by universal execution or, as we should say, by involuntary bankruptcy. But along with this remedy specific relief grew up in the _actio arbitraria_, a clumsy device of specific performance on the alternative of a heavy money condemnation, which repeated itself in Pennsylvania before equity powers were given the courts, and is substantially repeating in our federal courts in their attempts to apply equitable relief to torts committed in foreign jurisdictions. The civil law developed, or perhaps the canon law developed and the civil law took over, an _actio ad implendum_ or action to require performance, with natural execution, that is a doing by the court or its officers at the expense of the defendant, of that to which he is bound as ascertained by the judgment. In general in civil-law countries today what we call specific performance is the rule. A money reparation for breach of contract is the exceptional remedy. It is only when for some reason specific relief is impracticable or inequitable, as in contracts of personal service, that money relief is resorted to.

In countries governed by the common law we do not secure this interest so completely nor so effectively. For one thing we do not recognize as legally enforceable all intentional promises intended to be binding upon the promisor. Many technical rules as to consideration, rules having chiefly a historical basis, stand in the way. Many jurisdictions have abolished private seals and have made no provision for formal gratuitous or abstract promises. Moreover, we do not give specific relief ordinarily but only exceptionally where pecuniary relief is considered inadequate. Hence in the great majority of cases the promisee cannot compel performance in specie.

If we look into the reasons for this wide and effective enforcement of promises in the one system and narrower and less effective enforcement in the other, we come in both cases upon a mixture of historical background and philosophical reasoning, each influencing the other and neither governing the subject completely. Philosophical theories have arisen to explain existing rules and have been the basis of new rules and of remaking of old ones. But they have been the means also, at times, of intrenching the rules they sought to explain and of fastening on the law doctrines of which it were better rid. Nowhere is the reciprocal action of legal rules and philosophical theories more strikingly manifest than in our law of contractual liability.

Law did not concern itself at first with agreements or breaches of agreements. Its function was to keep the peace by regulating or preventing private war and this only required it to deal with personal violence and with disputes over the possession of property. I may remind you of the proposition of Hippodamus in the fifth century B. C. that there were but three subjects of lawsuits, namely, insult, injury and homicide. If a dispute over breach of an agreement led to an assault and a breach of the peace, tribunals might be called on to act. But it was the assault not the breach of agreement with which they were concerned. Controversy as to possession of property was a fertile source of disturbance of the peace and tribunals would entertain an action to recover possession. Agreements to compound for a wrong are perhaps the earliest type. But the law had its eye upon the need of composition, not upon the agreement. No basis for a law of contracts was to be found in the power of the tribunals with respect to injuries although our law did make assumpsit out of trespass on the case. On the other hand recovery of property could be used for this purpose. Hence the first legal, as distinguished from religious, contract was worked out on the analogy of a real transaction. Before this, however, another possibility had developed in the religiously sanctioned promise.

Religion, the internal discipline of the organized kindred, and the law of the state were three co-ordinate agencies of social control in ancient society. Nor was law for a long time the chief of these nor the one which covered the widest field. If the gods had been called to witness or good faith had a religious sanction, the duty to keep a promise was a matter for religion. Otherwise the mere pact or agreement not within the cognizance of the priests was but a matter for self-help. Hindu law shows the idea of religious duty to keep faith in full vigor. In the Hindu system the relation between the parties to a debt is not legal but religious and now that a law has grown up under English influence it is said that there is a legal obligation because there is a religious obligation. A man is bound in law because and to the extent that he is bound in religion and not otherwise and no more. To the Hindu lawyer a debt is not an obligation merely. It is a sin the consequences whereof follow the debtor into another world. Vrihaspati says: "He who, having received a sum lent or the like does not return it to the owner, will be born hereafter in his creditor's house a slave, a servant, a woman or a quadruped." Narada says that when one dies without having paid his debt, "the whole merit of his devotions or of his perpetual fire belongs to his creditors." In short the debtor is looked on as one who wrongfully withholds from the creditor the latter's property and hence as in some sort a thief. The legal idea, so far as there is one, is not one of obligation but of a property right in the creditor. One may suspect that religious obligation arising from the detention of property is a legal way of putting it in a polity in which social control is primarily religious and religious precepts are turning into legal precepts. At any rate the Hindus carry the idea of religious obligation so far that a descendant is bound to pay the debts of his ancestor in many cases whether he receives any assets of the ancestor or not. The liability of the son to pay the father's debt is held to arise from the moral and religious duty of rescuing the father from the penalties attaching in a future state to non-payment of debts. Accordingly if the debt is of such a kind that no penalties would so attach, there is no religious duty and hence no obligation imposed upon the descendant.

Roman law in its earliest stage was not unlike this. Agreements of themselves were not cognizable by the tribunals. It was no ground for summoning a defendant before the magistrate that he had made a promise and had broken it. Agreements were matters for religion or for kin or guild discipline. If one had called on the gods to witness his promise or sworn to fulfil it, he was liable to pontifical discipline. The presence of an impious oath breaker was a social danger and he might be devoted to the infernal gods. As law replaced religion as the controlling regulative agency, the old religiously sanctioned promise becomes a formal legal contract. Thus in the strict law we get formal contracts with their historical origin in religious duty, and formal contracts with their historical origin in a legal duty created by a real transaction of suretyship or conveyance, perhaps by calling the people to witness so that there is an affront to the state if they are called upon in vain.

When contact with Greek philosophers set the Roman jurists to thinking about the basis of obligation, there were two sorts of promises: (1) Formal promises, (a) by stipulation, using the sacramental word _spondeo_ and thus assuming the pouring out of a libation that the gods might take notice of the promise, (b) by public ceremony apparently symbolizing a real transaction before the whole people, (c) entered upon the household books of account, and (2) mere informal promises not recognized by law. The latter depended wholly on the good faith of the maker since the law had put down self-help which formerly had been available to the promisee. Accordingly Roman jurists distinguished civil obligations and natural obligations--those recognized and secured legally and those which primarily had only a moral efficacy. A _nudum pactum_ or mere agreement or mere promise, not clothed with legal efficacy because it did not come within any of the categories of legal transactions sanctioned by the _ius ciuile_, created only a natural obligation. It was right and just to adhere to such a pact, but only contracts, undertakings recognized by law because of their form or nature, were enforceable.