§ 67 Grounds of the Authority of Precedents
The operation of precedents is based on the legal presumption of the correctness of judicial decisions. It is an application of the maxim, Res judicata pro veritate accipitur. A matter once formally decided is decided once for all. The courts will listen to no allegation that they have been mistaken, nor will they reopen a matter once litigated and determined. That which has been delivered in judgment must be taken for established truth. For in all probability it is true in fact, and even if not, it is expedient that it should be held as true none the less. Expedit reipublicae ut sit finis litium. When, therefore, a question has once been judicially considered and answered, it must be answered in the same way in all subsequent cases in which the same question again arises. Only through this rule can that consistency of judicial decision be obtained, which is essential to the proper administration of justice. Hence the effect of judicial decisions in excluding the arbitrium judicis for the future, in providing predetermined answers for the questions calling for consideration in future cases, and therefore in establishing new principles of law.
The questions to which judicial answers are required are either questions of law or of fact. To both kinds the maxim, Res judicata pro veritate accipitur, is applicable. In the case of questions of law, this maxim means that the court is presumed to have correctly ascertained and applied the appropriate legal principle. The decision operates, therefore, as proof of the law. It is, or at all events is taken to be, a declaratory precedent. If the law so declared is at all doubtful, the precedent will be worth preserving as useful evidence of it. But if the law is already clear and certain, the precedent will be useless; to preserve it would needlessly cumber the books of reports, and it will be allowed to lapse into oblivion.
In the case of questions of fact, on the other hand, the presumption of the correctness of judicial decisions results in the creation of new law, not in the declaration and proof of old. The decision becomes, in a large class of cases, an original precedent. That is to say, the question thus answered ceases to be one of fact, and becomes for the future one of law. For the courts are now provided with a predetermined answer to it, and it is no longer a matter of free judicial discretion. The arbitrium judicis is now excluded by one of those fixed and authoritative principles which constitute the law.
For example, the meaning of an ambiguous statute is at first a pure question of fact. When for the first time the question arises whether the word “cattle” as used by the statute includes horses, the court is bound by no authority to determine the matter in one way or the other. The occasion is one for the exercise of common sense and interpretative skill. But when the question has once been decided, it is for the future one of law and no longer one of fact; for it is incumbent on the courts in subsequent cases to act on the maxim Res judicata pro veritate accipitur, and to answer the question in the same way as before.
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.