Chapter 9

An ingenious explanation of the doctrine of _Rylands_ v. _Fletcher_ by means of the economic interpretation of legal history demands more notice. We are told that the English courts were manned by landowners or by judges drawn from the land-owning class; that the doctrine of _Rylands_ v. _Fletcher_ is a doctrine for landowners and so was not accepted by artisans in the United States. But consider which states applied the rule and which rejected it. It was applied in Massachusetts in 1872, in Minnesota in 1872, in Ohio in 1896, in West Virginia in 1911, in Missouri in 1913, in Texas in 1916. It was rejected by New Hampshire in 1873, by New York in 1873, by New Jersey in 1876, by Pennsylvania in 1886, by California in 1895, by Kentucky in 1903, by Indiana in 1911. Is New York a community of artisans but Massachusetts a community of landowners? Did the United States begin to change from a country of artisans to one of landowners about the year 1910 so that a drift toward the doctrine began at that time after a steady rejection of it between 1873 and 1896? _Rylands_ v. _Fletcher_ was decided in 1867 and is connected with the movement Dicey calls collectivism, which, he says, began in 1865. It is a reaction from the notion of liability merely as a corollary of culpability. It restrains the use of land in the interest of the general security. If this view is well taken, if it was an attempt to take account of the social interest in the general security in a crowded country, this may explain the reluctance with which it was received in the United States at first, where pioneer ideas, appropriate to a less crowded agricultural country, lingered at least to the end of the nineteenth century. In the actual American decisions, some follow _Rylands_ v. _Fletcher_ as an authoritative statement of the common law. Other cases go rather on the principle that liability flows from culpability. Agricultural states and industrial states alike divide along these doctrinal lines. Massachusetts and Pennsylvania, both industrial states, are on opposite sides. So are Texas and Kentucky, which are agricultural states. Massachusetts and New Jersey, each with an appointive bench, are on opposite sides, and so are Ohio and New York, each with an elective bench. In truth the Massachusetts court followed authority. In New Hampshire Chief Justice Doe was not willing to go on mere authority and decided on the general principle that liability must flow from fault.

Another view is that the doctrine of _Rylands_ v. _Fletcher_ is a crude attempt, when negligence and the doctrine of _res ipsa loquitur_ were none too well understood, to apply the principle of the latter doctrine, and that those doctrines will suffice to reach the actual result. No doubt _res ipsa loquitur_ gives a possible mode of treating cases where one maintains something likely to get out of hand and do injury. For four possible solutions may be found for such cases. One is absolute liability, as in _Rylands_ v. _Fletcher_. Another is to put the burden of proof of due care on the defendant, as French law does in some cases and as is done by some American decisions and some statutes in case of fires set by locomotives. A third is to apply the doctrine of _res ipsa loquitur_. A fourth would be to require the plaintiff to prove negligence, as is done by the Supreme Court of New Jersey where a known vicious animal breaks loose. That the fourth, which is the solution required by the theory of no liability without fault, has found but two courts to uphold it, and that only in the case of vicious domestic animals, is suggestive. _Res ipsa loquitur_ may easily run into a dogmatic fiction, and must do so, if made to achieve the result of the doctrine of _Rylands_ v. _Fletcher_, which does not permit the defendant to go forward with proof, short of _vis maior_ or the unanticipated unlawful act of a third person beyond defendant's control. The vitality and persistence of the doctrine against theoretical assault for more than a generation show that it is more than a historical anomaly or a dogmatic blunder.

Another type of common-law liability without fault, the so-called liability of the carrier as an insurer and the liability of the innkeeper, is relational and depends upon a different postulate. Nineteenth-century courts in the United States endeavored to hold down the former, restricting it because of its inconsistency with the doctrine of liability as a corollary of fault. But it has proved to have abundant vitality, has been extended by legislation in some states to carriers of passengers and has been upheld by recent legislation everywhere.

Two other types of liability, contractual and relational, must receive brief notice. The former has long done valiant service for the will theory. Not only liability arising from legal transactions but liability attached to an office or calling, liability attached to relations and liability to restitution in case of unjust enrichment have been referred to express or implied undertaking and hence to the will of the person held. But beneath the surface the so-called contract by estoppel, the cases of acceptance of a wrongly transmitted offer, the doctrine that a public utility has no general power of contract as to facilities or rates except to liquidate the terms of its relational duties in certain doubtful cases, and cases of imposition of duties on husband or wife after marriage by change of law, have caused persistent and recurring difficulties and call everywhere for a revision of our ideas. Also the objective theory of contract has undermined the very citadel of the will theory. May we not refer these phenomena, not to the will of the person bound, but to another postulate of civilized society and its corollaries? May we not say that in civilized society men must be able to assume that those with whom they deal in the general intercourse of society will act in good faith? If so, four corollaries will serve as the bases of four types of liability. For it will follow that they must be able to assume (a) that their fellow men will make good reasonable expectations created by their promises or other conduct, (b) that they will carry out their undertakings according to the expectation which the moral sentiment of the community attaches thereto, (c) that they will conduct themselves with zeal and fidelity in relations, offices and callings, and (d) that they will restore in specie or by equivalent what comes to them by mistake or unanticipated situation whereby they receive what they could not have expected reasonably to receive under such circumstances. Thus we come back to the idea of good faith, the idea of the classical Roman jurists and of the philosophical jurists of the seventeenth century, out of which the will theory was but a metaphysical development. Only we give it a basis in social philosophy where they sought a basis in theories of the nature of transactions or of the nature of man as a moral creature.

Looking back over the whole subject, shall we not explain more phenomena and explain them better by saying that the law enforces the reasonable expectations arising out of conduct, relations and situations, instead of that it proceeds upon willed action and willed action only, enforcing the willed consequences of declared intention, enforcing reparation for willed aggression and enforcing reparation for culpable carrying on of willed conduct? If we explain more and explain it more completely by saying that the ultimate thing in the theory of liability is justifiable reliance under the conditions of civilized society than by saying that it is free will, we shall have done all that we may hope to do by any theory.

V

Property

Economic life of the individual in society, as we know it, involves four claims. One is a claim to the control of certain corporeal things, the natural media on which human existence depends. Another is a claim to freedom of industry and contract as an individual asset, apart from free exercise of one's powers as a phase of personality, since in a highly organized society the general existence may depend to a large extent upon individual labor in specialized occupations, and the power to labor freely at one's chosen occupation may be one's chief asset. Third, there is a claim to promised advantages, to promised performances of pecuniary value by others, since in a complex economic organization with minute division of labor and enterprises extending over long periods, credit more and more replaces corporeal wealth as the medium of exchange and agency of commercial activity. Fourth, there is a claim to be secured against interference by outsiders with economically advantageous relations with others, whether contractual, social, business, official or domestic. For not only do various relations which have an economic value involve claims against the other party to the relation, which one may demand that the law secure, but they also involve claims against the world at large that these advantageous relations, which form an important part of the substance of the individual, shall not be interfered with. Legal recognition of these individual claims, legal delimitation and securing of individual interests of substance is at the foundation of our economic organization of society. In civilized society men must be able to assume that they may control, for purposes beneficial to themselves, what they have discovered and appropriated to their own use, what they have created by their own labor and what they have acquired under the existing social and economic order. This is a jural postulate of civilized society as we know it. The law of property in the widest sense, including incorporeal property and the growing doctrines as to protection of economically advantageous relations, gives effect to the social want or demand formulated in this postulate. So also does the law of contract in an economic order based upon credit. A social interest in the security of acquisitions and a social interest in the security of transactions are the forms of the interest in the general security which give the law most to do. The general safety, peace and order and the general health are secured for the most part by police and administrative agencies. Property and contract, security of acquisitions and security of transactions are the domain in which law is most effective and is chiefly invoked. Hence property and contract are the two subjects about which philosophy of law has had the most to say.

In the law of liability, both for injuries and for undertakings, philosophical theories have had much influence in shaping the actual law. If they have grown out of attempts to understand and explain existing legal precepts, yet they have furnished a critique by which to judge those precepts, to shape them for the future and to build new ones out of them or upon them. This is much less true of philosophical theories of property. Their rôle has not been critical or creative but explanatory. They have not shown how to build but have sought to satisfy men with what they had built already. Examination of these theories is an illuminating study of how philosophical theories of law grow out of the facts of time and place as explanations thereof and then are given universal application as necessarily explanatory or determinative of social and legal phenomena for all time and in every place. It has been said that the philosophy of law seeks the permanent or enduring element in the law of the time and place. It would be quite as true to say that it seeks to find in the law of the time and place a permanent or enduring picture of universal law.

It has been said that the individual in civilized society claims to control and to apply to his purposes what he discovers and reduces to his power, what he creates by his labor, physical or mental, and what he acquires under the prevailing social, economic or legal system by exchange, purchase, gift or succession. The first and second of these have always been spoken of as giving a "natural" title to property. Thus the Romans spoke of them as modes of "natural acquisition" by occupation or by specification (making a species, i.e., creation). Indeed, taking possession of what one discovers is so in accord with a fundamental human instinct that discovery and occupation have stood in the books ever since substantially as the Romans stated them. A striking example of the extent to which this doctrine responds to deep-seated human tendencies is afforded by the customs as to discovery of mineral on the public domain upon which American mining law is founded and the customs of the old whale-fishery as to fast-fish and loose-fish which were recognized and given effect by the courts. But there is a difficulty in the case of creation or specification in that except where the creation is mental only materials must be used, and the materials or tools employed may be another's. Hence Grotius reduced creation by labor to occupation, since if one made from what he discovered, the materials were his by occupation, and if not, the title of others to the materials was decisive. This controversy as to the respective claims of him who creates by labor and him who furnishes the materials goes back to the Roman jurists of the classical period. The Proculians awarded the thing made to the maker because as such it had not existed previously. The Sabinians awarded it to the owner of the materials because without materials the new thing could not have been made. In the maturity of Roman law a compromise was made, and various compromises have obtained ever since. In modern times, however, the claim of him who creates has been urged by a long line of writers beginning with Locke and culminating in the socialists. The Romans spoke of what one acquired under the prevailing social, economic or legal system as held by "civil" acquisition and conceived that the principle _suum cuique tribuere_ secured the thing so acquired as being one's own.

Roman jurists recognized that certain things were not subject to acquisition in any of the foregoing ways. Under the influence of the Stoic idea of _naturalis ratio_ they conceived that most things were destined by nature to be controlled by man. Such control expressed their natural purpose. Some things, however, were not destined to be controlled by individuals. Individual control would run counter to their natural purpose. Hence they could not be the subjects of private ownership. Such things were called _res extra commercium_. They might be excluded from the possibility of individual ownership in any of three ways. It might be that from their nature they could only be used, not owned, and from their nature they were adapted to general use. These were _res communes_. Or it might be that they were made for or from their nature they were adapted to public use, that is use for public purposes by public functionaries or by the political community. These were _res publicae_. Again it might be because they had been devoted to religious purposes or consecrated by religious acts inconsistent with private ownership. Such things were _res sanctae_, _res sacrae_ and _res religiosae_. In modern law, as a result of the medieval confusion of the power of the sovereign to regulate the use of things (_imperium_) with ownership (_dominium_) and of the idea of the corporate personality of the state, we have made the second category into property of public corporations. And this has required modern systematic writers to distinguish between those things which cannot be owned at all, such as human beings, things which may be owned by public corporations but may not be transferred, and things which are owned by public corporations in full dominion. We are also tending to limit the idea of discovery and occupation by making _res nullius_ (e.g., wild game) into _res publicae_ and to justify a more stringent regulation of individual use of _res communes_ (e.g., of the use of running water for irrigation or for power) by declaring that they are the property of the state or are "owned by the state in trust for the people." It should be said, however, that while in form our courts and legislatures seem thus to have reduced everything but the air and the high seas to ownership, in fact the so-called state ownership of _res communes_ and _res nullius_ is only a sort of guardianship for social purposes. It is _imperium_, not _dominium_. The state as a corporation does not own a river as it owns the furniture in the state house. It does not own wild game as it owns the cash in the vaults of the treasury. What is meant is that conservation of important social resources requires regulation of the use of _res communes_ to eliminate friction and prevent waste, and requires limitation of the times when, places where and persons by whom _res nullius_ may be acquired in order to prevent their extermination. Our modern way of putting it is only an incident of the nineteenth-century dogma that everything must be owned.

It is not hard to see how the Romans came to the distinction that has obtained in the books ever since. Some things were part of the Roman's _familia_, were used by him upon the public domain which he occupied or were traded by him to those with whom he had legal power of commercial intercourse. He acquired them by discovery, by capture in war, by labor in agriculture or as an artisan, by commercial transactions or by inheritance. For these things private actions lay. Other things were no part of his or of anyone's household. They were used for political or military or religious purposes or, like rivers, were put to use by everyone without being consumed thereby. As to these, the magisterial rather than the judicial power had to be invoked. They were protected or use of them was regulated and secured by interdicts. One could not acquire them so as to maintain a private action for them. Thus some things could be acquired and conveyed and some could not. In order to be valid, however, according to juristic theory the distinction must lie in the nature of things, and it was generalized accordingly.

In a time when large unoccupied areas were open to settlement and abundant natural resources were waiting to be discovered and developed, a theory of acquisition by discovery and appropriation of _res nullius_, reserving a few things as _res extra commercium_, did not involve serious difficulty. On the other hand, in a crowded world, the theory of _res extra commercium_ comes to seem inconsistent with private property and the theory of discovery and occupation to involve waste of social resources. As to the latter, we may compare the law of mining and of water rights on the public domain, which developed along lines of discovery and reduction to possession under the conditions of 1849 and the federal legislation of 1866 and 1872, with recent legislation proceeding on ideas of conservation of natural resources. The former requires more consideration. For the argument that excludes some things from private ownership may seem to apply more and more to land and even to movables. Thus Herbert Spencer says, in explaining _res communes_:

"If one individual interferes with the relations of another to the natural media upon which the latter's life depends, he infringes the like liberties of others by which his own are measured."

But if this is true of air and of light and of running water, men will insist upon inquiring why it is not true of land, of articles of food, of tools and implements, of capital and even, it may be, of the luxuries upon which a truly human life depends. Accordingly, how to give a rational account of the so-called natural right of property and how to fix the natural limits of that right became vexed questions of philosophical jurisprudence.

Antiquity was content to maintain the economic and social _status quo_ or at least to idealize it and maintain it in an ideal form. The Middle Ages were content to accept _suum cuique tribuere_ as conclusive. It was enough that acquisition of land and movables and private ownership of them were part of the existing social system. Upon the downfall of authority, seventeenth-and eighteenth-century jurists sought to put natural reason behind private property as behind all other institutions. When Kant had undermined this foundation, the nineteenth-century philosophical jurists sought to deduce property from a fundamental metaphysical datum; the historical jurists sought to record the unfolding of the idea of private property in human experience, thus showing the universal idea; the utilitarian demonstrated private property by his fundamental test and the positivist established its validity and necessity by observation of human institutions and their evolution. In other words, here as elsewhere, when eighteenth-century natural law broke down, jurists sought to put new foundations under the old structure of natural rights, just as natural rights had been put as a new foundation to support institutions which theretofore had found a sufficient basis in authority.

Theories by which men have sought to give a rational account of private property as a social and legal institution may be arranged conveniently in six principal groups, each including many forms. These groups may be called: (1) Natural-law theories, (2) metaphysical theories, (3) historical theories, (4) positive theories, (5) psychological theories and (6) sociological theories.

Of the natural-law theories, some proceed on a conception of principles of natural reason derived from the nature of things, some on conceptions of human nature. The former continue the ideas of the Roman lawyers. They start with a definite principle found as the explanation of a concrete case and make it a universal foundation for a general law of property. As it has been put, they find a postulate of property and derive property therefrom by deduction. Such theories usually start either from the idea of occupation or from the idea of creation through labor. Theories purporting to be based on human nature are of three forms. Some proceed on a conception of natural rights, taken to be qualities of human nature reached by reasoning as to the nature of the abstract man. Others proceed upon the basis of a social contract expressing or guaranteeing the rights derived by reason from the nature of man in the abstract. In recent thinking a third form has arisen which may be called an economic natural law. In this form of theory, a general foundation for property is derived from the economic nature of man or from the nature of man as an economic entity. These are modern theories of natural law on an economic instead of an ethical basis.