The operation of original precedents is, therefore, the progressive transformation of questions of fact into questions of law. Ex facto oritur jus. The growth of case-law involves the gradual elimination of that judicial liberty to which it owes its origin. In any system in which precedents are authoritative the courts are engaged in forging fetters for their own feet. There is of course a limit to this process, for it is absurd to suppose that the final result of legal development will be the complete transformation of all questions of fact into questions of law. The distinction between law and fact is permanent and essential. What, then, is the limit? To what extent is precedent capable of effecting this absorption of fact into law?
In respect of this law-creating operation of precedents, questions of fact are divisible into two classes. For some of them do, and some do not, admit of being answered on principle. The former are those the answer to which is capable of assuming the form of a general principle: the latter are those the answer to which is necessarily specific. The former are answered by way of abstraction, that is to say, by the elimination of the immaterial elements in the particular case, the result being a general rule applicable not merely to that single case, but to all others which resemble it in its essential features. The other class of questions consists of those in which no such process of abstraction, no such elimination of immaterial elements, as will give rise to a general principle, is possible. The answer to them is based on the circumstances of the concrete and individual case, and therefore produces no rule of general application. The operation of precedent is limited to one only of these classes of questions. Judicial decisions are a source of law only in the case of those questions of fact which admit of being answered on principle. These only are transformed by decision into questions of law, for in this case only does the judicial decision give rise to a rule which can be adopted for the future as a rule of law. Those questions which belong to the other class are permanently questions of fact, and their judicial solution leaves behind it no permanent results in the form of legal principles.
For example, the question whether the defendant did or did not make a certain statement is a question of fact, which does not admit of any answer save one which is concrete and individual. It cannot be answered on principle. It necessarily remains, therefore, a pure question of fact; the decision of it is no precedent, and establishes no rule of law. On the other hand, the question whether the defendant in making such a statement was or was not guilty of fraud or negligence, though it may be equally a question of fact, nevertheless belongs to the other class of such questions. It may well be possible to lay down a general principle on a matter such as this. For it is a matter which may be dealt with in abstracto, not necessarily in concreto. If, therefore, the decision is arrived at on principle, it will amount to an original precedent, and the question, together with every other essentially resembling it, will become for the future a question of law, predetermined by the rule thus established.
A precedent, therefore, is a judicial decision which contains in itself a principle. The underlying principle which thus forms its authoritative element is often termed the ratio decidendi. The concrete decision is binding between the parties to it, but it is the abstract ratio decidendi which alone has the force of law as regards the world at large. “The only use of authorities or decided cases,” says Sir George Jessel, “is the establishment of some principle, which the judge can follow out in deciding the case before him.”[[165]] “The only thing,” says the same distinguished judge in another case, “in a judge’s decision binding as an authority upon a subsequent judge is the principle upon which the case was decided.”[[166]]
This is the true significance of the familiar contrast between authority and principle. It is often said by judges that inasmuch as the matter before them is not covered by authority, they must decide it upon principle. The statement is a sure indication of the impending establishment of an original precedent. It implies two things: first, that where there is any authority on the point, that is to say, where the question is already one of law, the duty of the judge is simply to follow the path so marked out for him; and secondly, that if there is no authority, and if, therefore, the question is one of pure fact, it is his duty, if possible, to decide it upon principle, that is to say, to formulate some general rule and to act upon it, thereby creating law for the future. It may be, however, that the question is one which does not admit of being answered either on authority or on principle, and in such a case a specific or individual answer is alone possible, no rule of law being either applied or created.[[167]]
Although it is the duty of courts of justice to decide questions of fact on principle if they can, they must take care in this formulation of principles to limit themselves to the requirements of the case in hand. That is to say, they must not lay down principles which are not required for the due decision of the particular case, or which are wider than is necessary for this purpose. The only judicial principles which are authoritative are those which are thus relevant in their subject-matter and limited in their scope. All others, at the best, are of merely persuasive efficacy. They are not true rationes decidendi, and are distinguished from them under the name of dicta or obiter dicta, things said by the way. The prerogative of judges is not to make law by formulating and declaring it—this pertains to the legislature—but to make law by applying it. Judicial declaration, unaccompanied by judicial application, is of no authority.
§ 68. The Sources of Judicial Principles.
Whence, then, do the courts derive those new principles, or rationes decidendi, by which they supplement the existing law? They are in truth nothing else than the principles of natural justice, practical expediency, and common sense. Judges are appointed to administer justice—justice according to law, so far as the law extends, but so far as there is no law, then justice according to nature. Where the civil law is deficient, the law of nature takes its place, and in so doing puts on its character also. But the rules of natural justice are not always such that any man may know them, and the light of nature is often but an uncertain guide. Instead of trusting to their own unguided instincts in formulating the rules of right and reason, the courts are therefore wisely in the habit of seeking guidance and assistance elsewhere. In establishing new principles, they willingly submit themselves to various persuasive influences which, though destitute of legal authority, have a good claim to respect and consideration. They accept a principle, for example, because they find it already embodied in some system of foreign law. For since it is so sanctioned and authenticated, it is presumably a just and reasonable one. In like manner the courts give credence to persuasive precedents, to judicial dicta, to the opinions of text-writers, and to any other forms of ethical or juridical doctrine which seem good to them. There is, however, one source of judicial principles which is of special importance, and calls for special notice. This is the analogy of pre-existing law. New rules are very often merely analogical extensions of the old. The courts seek as far as possible to make the new law the embodiment and expression of the spirit of the old—of the ratio juris, as the Romans called it. The whole thereby becomes a single and self-consistent body of legal doctrine, containing within itself an element of unity and of harmonious development. At the same time it must be remembered that analogy is lawfully followed only as a guide to the rules of natural justice. It has no independent claim to recognition. Wherever justice so requires, it is the duty of the courts, in making new law, to depart from the ratio juris antiqui, rather than servilely to follow it.
It is surprising how seldom we find in judicial utterances any explicit recognition of the fact that in deciding questions on principle, the courts are in reality searching out the rules and requirements of natural justice and public policy. The measure of the prevalence of such ethical over purely technical considerations is the measure in which case-law develops into a rational and tolerable system as opposed to an unreasoned product of authority and routine. Yet the official utterances of the law contain no adequate acknowledgment of this dependence on ethical influences. “The very considerations,” it has been well said, “which judges most rarely mention, and always with an apology, are the secret root from which the law draws all the juices of life.”[[168]] The chief reason of this peculiarity is doubtless to be found in the fictitious declaratory theory of precedent, and in the forms of judicial expression and reasoning which this theory has made traditional. So long as judges affect to be looking for and declaring old law, they cannot adequately express the principles on which they are in reality making new.