Common Law and the Common Welfare

FORTY years ago the most conspicuous failure in the American governmental system was the administration of our large cities. To-day, by common consent, it is the administration of the law. The breakdown in public confidence has shifted from the city halls to the courthouses. By so doing it has moved closer to the foundations of democratic government.

The problem of enforcing the law is the most urgent of all the problems now confronting the people of the United States. Almost any able-bodied citizen can give you, offhand, a simple solution for it — ranging from the repeal of the Eighteenth Amendment to the abolition of trial by jury. But a good deal of the trouble is far too fundamental to be eradicated by any such minor surgery. It reaches into the spirit of the laws themselves and is not merely a matter of law observance. Much of it is the outcome of a great and steadily widening gulf between the common law and the common welfare.

I

To keep the law in close articulation with the needs of the people, or with what the people think they need, is a task that calls for a high quality of statesmanship — a higher quality than a democracy can usually provide. It presents the problem of being conservative and at the same time liberal, thus reconciling order with progress. For on the one hand there is a mass of legal traditions and principles, delicately adjusted to each other, which cannot be abruptly transformed without damage to the entire mechanism. On the other hand there is a fluid public opinion, not harnessed by traditions, an impatient electorate clamoring insistently for statutory provisions and judicial interpretations which defy all the principles of economics and disregard all the lessons of social evolution.

The layman does not realize that the traditions of the law are fundamentally conservative and must always be so if law is to continue an instrument of protection, not of oppression. There is a reason for this. Law in its early stages was the outgrowth of religion. Its origin was attributed to supernatural sources, and its principles, being of divine origin, were deemed to be immutable, eternal. The assumption of supernatural origin duly passed out of the picture, but the idea of fixity in legal principles has remained. It was worked into the fabric of the common law in its formative stages and it permeates the whole corpus of American jurisprudence to-day. Lawyers and judges everywhere are wont to look upon legal principles as absolute, and of universal validity, without variation as to time, or place, or circumstance. But the trouble with absolute principles is that they stand, while the social order which they seek to regulate is dynamic and progressive.

During the past thirty years we have gone through a social revolution in America, one of the greatest of its kind that have ever taken place within the same length of time in human history. As respects our social outlook and economic ideals we are now a very long way from the turn of the twentieth century. But there has been no appreciable transformation of our legal framework or in our juristic conceptions during these three decades.

Faced with a multitude of new relations between man and man, the law has tried to meet this exigency by making some adjustment of its traditional formulas and by stretching its ancient rubrics to cover the new requirements. The result is seen in a great deal of public dissatisfaction, not only with the enforcement of the law, but with the substance of it. The rank and file of the people demand that the legal system shall fit the age, while lawmakers and courts are endeavoring to warp the age into consonance with doctrines of the law which grew up in earlier and far less complex times. The lawmakers and the courts are thinking in terms of sound principles, while the people are thinking in terms of the living generation’s immediate needs. This gulf which lies between the legal mind and the public mind must somehow be bridged if the orderly rule of law is to be maintained in democratic communities.

II

This task is not an easy one at best. It is made more difficult by the fact that the common law, which is the basis of our legal system, developed its principles in days when conditions of life were far more elementary and human relations much less involved than they are to-day. It is jointly the product of rural England and pioneer America. It is a body of precepts, principles, and points of view devised for use in the English mediæval shire and duly adapted to the needs of frontier settlements in the United States.

Hence the most outstanding characteristic of the common law is its intense individualism. It lays great stress on individual freedom, individual obligation, individual liability. Its primary aim has always been to assure to every man a fair field and no favor, with free competition as its ruling economic slogan. Accordingly the common law takes it for granted that the best interests of organized society can best be served by letting John Doe and Richard Roe fight it out in the courts as individuals, with little regard to the fact that issues of the highest social import may be involved.

In pioneer agricultural communities this conception of a legal transaction as affecting two individuals only, plaintiff and defendant, is usually adequate. But in the highly industrialized and strongly urbanized social order of today it is not enough. The concept of a legal issue must envisage men in the mass, and the well-being of such men, not for themselves alone, but for their posterity. Legislators from time to time realize this need and strive to meet it. Thus the special statutes which regulate the hours of labor for women are quite as mindful of a future as of the present generation.

During the period since the incoming of the twentieth century the public mind in the United States has been slowly but steadily relaxing its emphasis on individualism and on individual rights. Our people are becoming more socially-minded, which is what always happens when a country grows up and gets rid of its youthful exuberance. The American public mind is now thinking more in terms of social justice and social righteousness, less in terms of individual freedom, free competition, freedom of contract, and the sanctity of private property, which are the four corner stones of the common law. This change of mind is being strongly reflected in the increasing output of regulatory statutes, most of which are cutting loose from commonlaw principles and are setting up new obligations, new liabilities. The statutes which regulate the public utility companies, for example, the banks, the insurance companies, and the other economic enterprises which are deemed to be affected with a public interest — these statutes are roughly brushing aside the old common-law assumption that every able-bodied citizen is able to look out for himself.

Blue-sky laws have elbowed the doctrine of caveat emptor out of the way. Usury laws make it no longer needful for the borrower to beware. Perhaps the most conspicuous departures from the old landmarks of legal individualism are to be found in the workmen’s compensation laws which have now been enacted in virtually all the states. These laws were needed, and only by enacting them could the ends of justice be served in this industrial age, but their provisions certainly cut a wide swath through the common law of contracts and the common law of torts as the nineteenth-century lawyer understood and admired them.

By the artifice of a statute the law can be stepped up into line with the more urgent needs of the social order when it is strongly pushed from behind — by organized labor, by organized capital, by any influence which can make itself effectively felt in the legislative chambers. But its settled tendency is to lag behind. New and significant developments in the methods and processes of industry, trade, and credit are taking place year by year; the tempo of economic progress is speeded up, and the relations of the individual citizen to his fellows are being gravely altered by these changes; but too often the laws of the land are following at a distance or not following at all.

III

Let me take a couple of illustrations. There is the law of suretyship. Its wellknown doctrines were developed in days when the surety was almost invariably a neighbor and friend — some kind-hearted fellow who gave bond as a favor, without money and without price, and with no expectation of personal emolument. Moreover the legal relation of principal and surety, even fifty years ago, was a relatively uncommon one because business transactions in those days were concluded for the most part between persons who knew each other and who went on the confidence of personal knowledge.

The principles of the law of suretyship were adjusted to that situation. They treated the surety with tender consideration and rightly so, for he was a good fellow and deserved the law’s solicitude. He might easily get into trouble and suffer loss through no fault of his own, and the law tried to protect him. So it made contracts of suretyship a sort of privileged order among contracts and gave the surety all manner of defenses which were not available in ordinary actions of contract. It stipulated, for example, that any alteration in the principal contract would release the surety from his obligations even when such alteration was to his benefit. It provided that any increase in the liability of the principal would release the surety. From somewhere in the back of my mind I recall a case where an increase in the capital stock of a bank was held to release the surety for the cashier. At any rate the lawdeveloped in such a way as to give the surety the maximum number of loopholes, which is what he deserved — good fellow that he used to be.

But now all this has changed. Contracts of suretyship have become about as common as any other kind of contracts. Bonds arc demanded and given in all sorts of transactions and for the faithful performance of all sorts of things. They have become so common, in fact, that personal sureties have almost wholly dropped out of the picture. The liability is now assumed, in ninety-nine cases out of a hundred, by regular bonding and surety companies who do it for a cash consideration without any element of personal favor in the transaction at all. By reason of this change in the essential relation there is no longer any good reason why contracts of suretyship should have a place of special privilege in the eyes of the law or the courts. Yet we are still in bondage to the old formulas. Neither the substance nor the interpretation of the law has been radically overhauled to square with the new realities.

Take another example. One of the most conspicuous changes in our business methods during the past fifteen years is represented by the extraordinary growth of installment buying. In some lines of business, such as automobiles, pianos, radios, and household furniture, a very large part of the total sales are made on conditional contracts with provision for weekly or monthly payments, with a vendor’s right of repossession in the event of any default. It has been estimated that there is four or five billion dollars’ worth of merchandise being paid for on the installment plan in the United States to-day. Unquestionably this system of ‘ pay as you use it ’ has become a fixture in the process of marketing, and on our next wave of business prosperity it is likely to be expanded to even larger proportions.

Now in connection with this method of selling goods under conditional contracts there has grown up a new marketing device known as the sales agency. Despite its name, the sales agency is not in truth an agency at all. It buys outright and sells. The relation of a sales agency to its customers is merely that of vendor and purchaser. Yet the flavor of agency is also there, for a sales agency often has the exclusive right to handle certain goods in a designated territory; it is required to sell at fixed prices and it gives a warranty on behalf of its principal. Here we have, then, a curious jumble of relations in which somebody sells you merchandise as a principal but warrants it as an agent while holding the title under a conditional contract of sale with the right of repossession in the event of default.

We have a law of sales, and we have a law of agency; but we have developed no new set of legal principles fitted to the process which has come to play so large a part in the country’s marketing system during the past dozen years. Jurists and courts have merely tried to stretch the old law of conditional sales to cover the new economic relationships. From the standpoint of economic justice and a square deal it covers them inadequately. It has given the sales agency a virtually free hand to make and enforce conditional contracts of a jug-handled type in which every opportunity for bald injustice is placed at the vendor’s disposal. The seller keeps the title, but passes to the purchaser all the risks of ownership. These conditional contracts of sale are bought, sold, and bartered by so-called finance companies; they are pledged to banks as collateral; they are marketable securities, to all intents, and ought to be put under regulation as such. They represent a huge equity in personal property, owned by millions of installment buyers, but an equity to which the law has thus far proffered no special protection whatsoever. It has held to the old common-law doctrine that when a man makes a bad bargain he is assumed to have done it with his eyes open and must take the consequences. That assumption is no longer valid in these days of high-pressure salesmanship by sales agencies of 100 per cent efficiency. Some day, before very long, the installment buyer will rise up and claim special statutory protection, just as the insurance policyholder, the bank depositor, and the factory worker have done.

IV

One might give further illustrations of the common law’s obliviousness of great changes in the life of the people, more particularly in the case of changes due to the rural exodus and the migration of people into the cities. To take a palpable instance, there is its persistent adherence to the principle that a municipal corporation is not liable for the torts of its agents or employees if these happen to have been committed in the performance of a ‘governmental’ function. Hence a city or town remains immune from legal liability when injury to the person or property of an individual citizen is caused by the negligence or malfeasance of its employees in the police, fire, or health departments, or in connection with the schools, hospitals, parks, or even with its sanitary departments.

Whatever justification there may have been for this municipal immunity in pioneer days, when cities were small and had only a few employees, it seems out of harmony with present conditions in great urban communities which are pushing their activities into every branch of the common life and are maintaining on their pay rolls many thousands of governmental employees whose work comes into daily contact with the life of the citizen. ‘ Reason is the life of the law,’ said Coke, but to the average layman there does not seem to be much reason in the rule that, when a truck belonging to the city water department negligently does you damage, the doctrine of respondeat superior applies and the municipal treasury is liable in damages, but that when a fire engine is at fault this doctrine does not apply, because the fire department is performing a governmental function and hence becomes by legal fiction invested with the sovereign privilege of knocking people down. From the standpoint of the injured individual it makes no difference to what city department the vehicle belongs. It is a curious fact, moreover, that although this doctrine that ‘the king can do no wrong’ originated in England, it has never been extended in England to municipal corporations. An English city is liable for the torts of its agents and employees, no matter what kind of work they are doing, whether it be governmental or quasicommercial. The liability includes even the work of its police officers.

This difference in legal immunity may explain, in part at least, the superior efficiency of police personnel and work in the cities of Great Britain. The English city cannot afford to have malfeasance in its police establishment. The cost in damage awards to individual citizens would be too great. But the American city can afford to tolerate any degree of police inefficiency and ineptitude, for its mayor and council can rest on the assurance that the city is free from legal liability no matter how bad the situation may become. One of the first steps needed in the way of toning up the governmental departments of American municipal administration, therefore, is the statutory extension of legal liability to all of them.

V

Turn for a moment from the common law itself to the machinery which we have provided for its enforcement. Its chief reliance, the jury system, is under fire to-day from many quarters, and every lawyer has his own explanation of what the trouble is; but may it not be that the real affliction is one for the social psychologist rather than for the lawyer to diagnose? It is a fact beyond peradventure, at any rate, that the whole character of the American population has altered during the past fifty years while the essential features of the jury system have undergone in this interval no change whatever. Can we fairly expect an institution to go on unchanged, unchanging, into a new environment and yet function unfalteringly? It is expecting a great deal.

The trial jury is an Anglo-Saxon institution, born and bred. It is intimately related to the genius of the Anglo-Saxon race, and in the course of five centuries it has never gained a secure foothold in any countries other than those in which Anglo-Saxon stock and traditions predominate. The jury system has been transplanted to Australia, ten thousand miles away, and has flourished there, but it has never been persuaded to take firm root in France, although England and France are geographically separated by onlythirty miles of Channel.

Race and racial genius are to judicial institutions what soil and climate are to organic life — they determine whether things will grow and thrive. Hence the transplantation of the jury system to America was easily accomplished, and the jury functioned here without disclosing any conspicuous defects so long as the United States remained predominantly a land of Anglo-Saxon blood and inheritance. But during the last half of the nineteenth century great waves of immigration came, bringing many millions of aliens from lands where trial by jury had never existed and where the whole philosophy of the jury system was unknown. In due course these newcomers and their immediate descendants came to form a large element in the national population. In most of our industrial cities they now outnumber the original stock; in some cases they far outnumber them. And it is in these communities that the jury system now gives the least satisfaction. It functions at its worst in those cosmopolitan industrial areas where the alien infusion has been most pronounced. In the native and rural portions of the country the jury is holding its own, but the combination of urban and alien is proving too much for it.

Now the essence of the jury system is that those who constitute the jury shall keep firmly in mind the interests of public security as well as the rights of the individual offender. When the prime interests of society are lost to view, or are inadequately considered, the whole philosophy of trial by jury loses its underpinning. Hence the jury syrstem postulates, above all things else, a strong popular confidence in the social order, the state, and the government. Among men and women of Anglo-Saxon birth or heritage this zeal for the maintenance of public order is traditional. But the millions of immigrants who have come to America during the past fifty years have for the most part brought no such tradition along with them. They came to this country with no profound respect for the governments or courts which they left behind them. To most of these newcomers — Jews, Poles, Armenians, and Slavs — the state, the government, the law, and the social order in their own homelands were agencies of special privilege and barriers in the way of individual liberty. It has not been easy to re-orient these people, to break down the old aversions, and to make them realize that in America the reign of law and the even-handed administration of justice are essential agencies for the promotion of individual liberty.

But though this educating of the masses to an appreciation of their own individual interest in the public security is a difficult task, some way to accomplish it must be found. The jury system, in spite of its varied shortcomings, must be preserved as an integral part of our judicial mechanism. It must not only be preserved but strengthened, for quite aside from its other merits the value of the jury as a connecting link between law and public opinion is too great to be lost.

VI

In a highly developed industrial society such as we have in twentiethcentury America the law should not be, and cannot be, a thing apart. Laws do not function in a vacuum. They must be related to the spirit and the needs of the hour. Most lawmakers do not yet realize that the making of the law is the greatest of all the social sciences. Progress in the natural sciences during the past fifty years has been by means of research, and the progress of jurisprudence must be by that method also. Otherwise we shall continue to have that strange spectacle which the world is querulously watching in Chicago to-day — namely, some of the finest industrial technique and some of the worst judicial administration on the face of the earth, both operating side by side.

Every new application of science to industry makes our civilization more complex, and hence makes the art of legislation more difficult, for the difficulties of efficient lawmaking increase as the square of the newly created human relations. To be safe, the progress of the law ought to go faster than the advance of applied science, but unhappily it is doing nothing of the kind. If the great expounders of the law in earlier days — Marshall, Taney, Kent, and Story — were to rise from their narrow cells and survey the handiwork of their posterity, they would be appalled by the stupendous progress that we have made in industry, in transportation, in communication, and in material wealth. But would they be equally impressed by any improvement in the quality of the laws or in the methods by which the laws are administered ? To ask that question is to answer it.

Our immediate goal, therefore, should be to bring the law abreast of the newer developments in business, in government, and in social organization. In place of the old formulas we should seek to find concepts that will stand the test of actual operations, and on these we should begin to rebuild with an eye on the realities of everyday life. Lawyers and judges cannot do this alone; they must have lay coöperation. But lawyers must assume the leadership in any upbuilding of the law, for if the progress of the law is to be securely founded it must link itself with the past. Lawyers form the largest element in legislatures, and through theirrecruiting of the bench they control the spirit of legal interpretation. The legal profession is conservative, traditionally and necessarily so — I would even say fortunately so, for a democratic society needs a strong stabilizing force such as the members of the bench and the bar supply. The legal mind puts its stress on order, while the lay mind lays its emphasis on progress. Far from being antagonistic, however, these two are quite reconcilable. There can be no sound progress unless it is built upon order; and there can be no sure maintenance of order unless it permits and facilitates progress. To coordinate these two is the fundamental task on which both the makers and the interpreters of the law may well bestow their energies.