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A mere promise nudum-naked-unclothed with a reality-will not do. The Norman custumal, now believed to have been derived from the English law, states it pithily thus: No one is made debtor by a promise unless a legal cause of the promise precedes it: that is to say, debt grows out of the facts constituting the consideration and the duty thence arising: a result which throws a side-light upon Judge Holmes' theory of consideration, which Pollock and Maitland disapprove, but which we are more and more inclined to adopt.

What was thus true of the action of debt as founded on the wrong of a disseisin was equally true of detinue, of replevin, of trover, of trespass quare clausum. All of them, influenced, more or less, by the seisin of the land law, went upon the ground that the claimant's rightful possession had in some manner been disturbed or destroyed and should be restored or compensated by damages. It was not until trespass broadened out into case, and the action of assumpsit became developed that the realism of seisin began to lose its hold.

So much for the influence of seisin in the domain of law. We have not exhausted the subject but have given enough to bring into view the persistent realism of the earlier law, and the reason why every known action was an action of tort. For the basis of every such action is never a promise, but always a duty growing out of actual facts and real relations. That duty was obviously a conception of the general morality slowly studying each situation and determining the view of it which the best interests of the parties and the common welfare of the people required. That view in its origin never rose above or drifted beyond the actual and palpable facts, and necessarily the law of the time was thoroughly realistic and had its roots in the prevailing morality.

But dominant as seisin was over all branches of the law it found its match in the doctrine of uses and yielded to an inevitable destruction. We must anticipate somewhat in order to trace the progress of that downfall.

The effort to destroy uses by executing them proved an utter failure under the rulings of the court and especially through the protection of equity. By the name of a trust the use remained, and it survived in a whole group of future estates which owed their existence to a single judicial construction. It was held that the use could only be executed when the statute and the use came together, that is could operate effectually at one and the same moment. This opened the door to a construction of uses planned to take effect in the future and therefore to remain unexecuted and of course undestroyed. Hence arose shifting uses, springing uses and contingent uses creating a group of equitable estates running parallel with and more or less imitating the

corresponding network of legal estates. But something else followed this construction. It furnished opportunity for new methods of land transfer which operated secretly, without the open evidence of seisin, and, by a sort of statutory magic, building its castles in an instant and in the dark. A desires to convey land to B. He makes a feofment to C to the use of B. He gives C the seisin but at that instant the statute and the use come together and the use is executed in B and turned into a legal estate in him without the publicity of seisin or any obvious evidence of his title. The mischief went further. It led eventually to three forms of conveyance, all of which contemned the seisin and were effectual without its aid. ne was the covenant to stand seized to the use of the intended donee, founded on a consideration of blood or marriage. The law at once executed the use and so vested the legal estate in the beneficiary. Another was the lease and release. The vendor first executed a lease for a year to the vendee and put him in possession, and then released or quit-claimed to him all his own right in the land, and so converted the estate for a year into an absolute fee. And again, there was the bargain and sale. The vendor bargains to sell the land to the vendee who pays the agreed price, and a use immediately results to him and the statute executes the use, and so the legal estate is transferred.

But all these methods had the vice of secrecy. The man put in open seisin lost ownership at the moment of gaining it and to a concealed or unknown owner. No purchaser could be safe who relied merely on the appearance of seisin which might prove to be only the cover of a hostile title. To redress this evil a new statute was passed which ordained that bargains and sales of lands should not enure to pass title unless made by indenture and within six months enrolled at Westminster or with the keeper of the rolls in the county. And so step by step the coarse and rude method was displaced by the operation of the recording acts. The war-glove surrendered to the peaceable pen. That was the end of seisin. As to land it was supplanted by the recording acts; as to chattels by contract.

The Legislative Power, The Public Utility

Rate, and The Local Franchise


It is a familiar observation that the tripartite division of governmental functions between executive, legislative and judicial branches brings every fundamental question of public policy sooner or later to the courts, and carefully devolves upon the trained minds and deliberative judgment of the courts the task of finding an orderly way of accomplishing the result really called for by the public emergency. This is only a more formidable phrasing of Dicey's brilliant generalization that the American federal system “substitutes litigation for legislation", and calls upon those who are usually the best trained and most disinterested of all our public servants to analyze the situation and "point the way" to sound and conservative steps forward. A time of economic and social readjustments subjects existing mechanisms of government to new and unexpected strains and makes new and unforeseen demands. Long before the executive and the legislature are ready to deal adequately and courageously with the new conditions, the processes of litigation have commonly placed the whole problem “on the door-step” of the courts and have pleaded for judicial aid more summary than the leisurely course of legislation seems likely to yield.

The entry of the United States into the World War precipitated novel and unprecedented conditions as to public utility rates and service. The spring of 1918 brought a real crisis. The companies themselves were poorly prepared for such a startling readjustment of their basic problems, and the governmental machinery set up for handling the relationship of the state to its corporate creatures in the public service field was still less ready and suitable for such an emergency. The whole problem was new, and no one had given much thought to the ways of meeting it. The past twenty or thirty years, in the public utility field, had generally been a period of falling costs per unit of service. The volume of service rendered had risen rapidly; the units of operation had been continuously enlarged;

Cornell, LL.B. 1905. Formerly Justice of the City Court of New York, and later chief Counsel for the New York State Public Service Commission for the First District, and member of the Valuation Committee of the National Association of State Railway and Public Utility Commissioners. He participated in the principal cases discussed in this article.

radical economies in methods and outlays had been introduced; and the result was a period in which the trend of operating costs per unit of service was downward, and all departments and branches of government had been invoked to ensure that the cost of the service to the patron would keep pace with the declining cost to the company. Commissions were set up with elaborate powers of rate-fixation, all bestowed in phraseology pre-supposing their use to force further reductions in rates. Special statutes were passed. prescribing specific maximum rates for specific services in specific areas. To prevent reductions being made which would work confiscation, the courts were very guarded in fortifying the powers of the new administrative commissions, and insisted upon methods of procedure and nature of proof which forestalled flexible changes in rates. On the other hand, the legislature was, in many instances, careful to withhold from the commissions power to sanction rates higher than those prescribed by special statutes (Cf. New York Pub. Serv. Coms. Law, Sec. 72). The whole thought was of reduction, rather than increase; the legislature, the commissions, the municipalities, and in some instances the courts, were invoked and marshalled to aid in the favorite civic (I shall not say political) pastime of hammering public utility rates down to the closest possible margin of correspondence with the falling costs of operation. No one thought of the desirability of having but one public authority fix rates, on a sound, scientific and flexible basis; that the more numerous are the agencies of rate reduction, the less likely are rates to continue excessive, was the concept of that heyday of regulation.

Then came the war and the cataclysm. Costs of operation mounted and mounted, and everywhere the demand and the need arose that rates be readjusted upward, to keep pace with the rising costs, even as they had been forced and kept down, when costs were falling or stationary. The whole mechanism which had been set up to lower rates was suddenly called upon to raise them; the concepts of procedure and of proof, which had been built up to retard reductions, were found now to be flung squarely in the path of imperative increases; the barriers which had been builded, in the days when legislatures, commissions, municipalities, and courts, were vying with each other in securing for the public some share in the benefits of lowered cost of operation, were found to bar necessary readjustments which would have made the public share in the burden of increased costs of operation. Under the impact and strain and in the face of new conditions, the regulative system proved not to have within itself the essential powers of accommodation and adjustment. It failed to meet the emergency; failed to adapt itself to put in force such rates as would ensure the upkeep of the service and properties, and literally broke down, in many of the American states, even as the Interstate Commerce Commission had failed to meet the national need respecting the railroads. The result, in New York and some other states, was that the problem of public utility rates under war conditions was thrown into the courts.

This article is written to review what happened in the courts of New York—the trend of decision in a state whose public utility enterprises are the largest in the world, are conducted by the largest aggregations of capital, and present inherently the most difficult problems of regulation; a commonwealth whose courts, constitution and legislature alike had developed certain anomalies of view which rose to plague and perplex when the need came that rates execute an “about face" and march back up the hill. I shall try to write about the matter in a vein which may be regarded as “popular" rather than technical or legalistic. My purpose is to analyze what the courts have decided, and not what I might personally have felt they should have decided, in the several cases which arose during 1918; but I cannot refrain from expressing the opinion that the whole record of the 1918 decisions of the Court of Appeals concerning public utility rates and service presents a vital, human narrative of the way in which the members of this court have grappled with a big problem and have tried to do the sound, just, workable thing in relation to it, in an openminded, constructive, forward-looking way-a problem whose publicpolicy elements should have been dealt with promptly by the legislature and never brought to the court at all. That the Court of Appeals has found itself obliged to re-trace its steps, in more than one important particular, does not detract at all from the force or truth of the observations heretofore made in this article.



The public utility problems first came to the Court of Appeals in 1918 upon questions of the power of the Public Service Commissions to increase rates adequately:

(1) Could the commission, upon a proper showing of fact, increase a street railroad or gas rate to a figure higher than the maximum prescribed by a special act of the legislature?

(2) Could the commission, upon a proper showing of fact, increase a street railroad or gas rate to a figure higher than the maximum to which the company had contractually agreed as one of the terms of its local franchise?

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