§ 62 Declaratory and Original Precedents
In proceeding to consider the various kinds of precedents and the methods of their operation, we have in the first place to distinguish between those decisions which are creative of the law and those which are merely declaratory of it. A declaratory precedent is one which is merely the application of an already existing rule of law; an original precedent is one which creates and applies a new rule. In the former case the rule is applied because it is already law; in the latter case it is law for the future because it is now applied. In any well-developed system such as that of modern England, declaratory precedents are far more numerous than those of the other class; for on most points the law is already settled, and judicial decisions are therefore commonly mere declarations of pre-existing principles. Original precedents, however, though fewer in number, are greater in importance. For they alone develop the law; the others leave it as it was, and their only use is to serve as good evidence of it for the future. Unless required for this purpose, a merely declaratory decision is not perpetuated as an authority in the law reports. When the law is already sufficiently well evidenced, as when it is embodied in a statute or set forth with fulness and clearness in some comparatively modern case, the reporting of declaratory decisions is merely a needless addition to the great bulk of our case-law.
It must be understood, however, that a declaratory precedent is just as truly a source of law as is one belonging to the other class. The legal authority of each is exactly the same. Speaking generally, the authority and legal validity of a precedent do not depend on whether it is, or is not, an accurate statement of previously existing law. Whether it is or is not, it may establish as law for the future that which it now declares and applies as law. The distinction between the two kinds turns solely on their relation to the law of the past, and not at all on their relation to that of the future. A declaratory precedent, like a declaratory statute, is a source of law, though it is not a source of new law. Here, as elsewhere, the mere fact that two sources overlap, and that the same legal principle is established by both of them, does not deprive either of them of its true nature as a legal source. Each remains an independent and self-sufficient basis of the rule.
We have already referred to the old theory that the common law is customary, not case-law. This doctrine may be expressed by saying that according to it all precedents are declaratory merely, and that their original operation is not recognised by the law of England. Thus Hale says in his History of the Common Law:—
“It is true the decisions of courts of justice, though by virtue of the laws of this realm they do bind as a law between the parties thereto, as to the particular case in question, till reversed by error or attaint, yet they do not make a law properly so called: for that only the king and parliament can do; yet they have a great weight and authority in expounding, declaring, and publishing what the law of this kingdom is; especially when such decisions hold a consonancy and congruity with resolutions and decisions of former times.”152
Hale, however, is evidently troubled in mind as to the true position of precedent, and as to the sufficiency of the declaratory theory thus set forth by him, for elsewhere he tells us inconsistently that there are three sources of English law, namely, (1) custom, (2) the authority of Parliament, and (3) “the judicial decisions of courts of justice consonant to one another in the series and succession of time.”153
In the Court of Chancery this declaratory theory never prevailed, nor indeed could it, having regard to the known history of the system of equity administered by that court. There could be no pretence that the principles of equity were founded either in custom or legislation, for it was a perfectly obvious fact that they had their origin in judicial decisions. The judgments of each Chancellor made law for himself and his successors.
“It must not be forgotten,” says Sir George Jessel, “that the rules of courts of equity are not, like the rules of the common law, supposed to have been established from time immemorial. It is perfectly well known that they have been established from time to time—altered, improved, and refined from time to time. In many cases we know the names of the Chancellors who invented them. No doubt they were invented for the purpose of securing the better administration of justice, but still they were invented.”154
Both at law and in equity, however, the declaratory theory must be totally rejected if we are to attain to any sound analysis and explanation of the true operation of judicial decisions. We must admit openly that precedents make law as well as declare it. We must admit further that this effect is not merely accidental and indirect, the result of judicial error in the interpretation and authoritative declaration of the law. Doubtless judges have many times altered the law while endeavouring in good faith to declare it. But we must recognise a distinct law-creating power vested in them and openly and lawfully exercised. Original precedents are the outcome of the intentional exercise by the courts of their privilege of developing the law at the same time that they administer it.