The fact that statutes commonly fail to provide for some cases that will arise may be analyzed as follows: a. There are gaps in a narrow or technical sense when there is a lack of detailed, abstract rules by which a submitted case may be decided.
b. The framework given by the text of the statute may not be filled in when the text does express all that can be said in general terms50 yet does not furnish rules for individual cases directly but refers, explicitly or by implication, to some other source of law.
48 Billow, loc:, cit., in: "Das Recht," vol. 10, pp. 770 seq.
49 Cf. especially Gmur, "Die Anwendung des Rechts," pp. 71-80; Danz, "Die Auslegung der Rechtsgeschafte," (2d edition, 1906), and "Jhering's Jahrbucher," vol. 50, pp. 1 seq.; Wendt, "Die exceptio doli generalis," etc., in Archiv. Ziv. P. vol. 100,' pp. 1 seq., and especially p. 101; Stier-Somlo, "Das freie Ermessen, in: "Festgabe fur Laband," 1908, pp. 447 seq.; Oertmann, "Gesetzeszwang," etc., loc. cit. (note 1). While Gmur deals principally with the need of individualizing and making more concrete the abstract rules of law, the other authors mentioned treat especially of the changeability of certain imported juridical concepts, such as good faith, business customs, circumstances of the case, and show how they should be interpreted, according to the principle of "aequitas," so as to fit the varying needs of business life.
50 Comp. Zitelmann's fundamental observations, which are at the basis of the whole theory of "gaps in the law," in his well-known treatise "Lucken im Recht" (1903), pp. 30 seq.
Under this head, the following subdivisions may be distinguished: a. Express reference to some other source of law, and under this: aa. Reference to the discretion of the court.51 bb. Reference to an unwritten yet objectively ascertainable rule (e.g., good faith, considering the custom of the trade).52 b. Tacit reference by means of what has been called 53 the statutory concepts of value.54 In such cases also judicial interpretation makes law on the basis of "aequi-tas." For statutory provisions, as Kipp very properly emphasizes in regard to Roman "aequitas," are for the most part "drawn in such a manner that one cannot conceive at all of their application without the intervention of equitable discretion, for the reason that they operate constantly with concepts taken from life without themselves analyzing them."55 Properly they express their intention by indirection only.56 In such cases the Court is bound, to be sure, by the statute, but finds in it only the raw material of actual rules, and it is his business out of this to fashion the actual rules. In this connection Danz says aptly that usages of business recognized in accordance with the Code57 are "rules of customary law sanctioned by the statute" itself.58 Of themselves such rules are not law - they become such by the action of the Court in recognizing them pursuant to the express or implied reference to them found in the statute.
51 Cf. Zitelmann, "Lucken", pp. 29 seq.-Oertmann, loc. cit. pp. 19 seq. Legal consequences are provided generally by the statute, but the measure is fixed in each individual case by the court. An illustration is the fixing of a criminal sentence within the limits given by the statute, where there can be no review of the judicial discretion of the court.
52Typical illustrations are found in sections 157, 242, BGB; comp. the detailed discussions by Danz, loc. cit.; Wendl, loc. cit.; and Oertmann, loc. cit.
53 For elucidation of these concepts, see Zitelmann, "Kunst der Gesetzgebung" (Dresden, 1904) p. 40; Stier-Somlo, loc. cit. p. 471, seq.; Oertmann. loc. cit., especially p. 13 seq., and note 8, p. 46.
54 In such cases it appears as if the statute had expressed everything exhaustively and in detail, yet it turns out that the terms and concepts used need to be furnished with concrete contents. The terms themselves are nothing but more or less insufficiently filled outlines. There is nothing better than a rudimentary rule, yet one capable of being objectively ascertained, because the statute refers implicitly to matters (like business usages and similar things) which in practical life are generally understood. Such subsumptions are properly subject to revision on appeal. (Oertmann, loc. cit.; Zitelmann, loc. cit.) This subject has been touched upon by authors, but its true importance has hardly been appreciated. Comp. especially Ehrlich, loc. cit. in Burian's Juristische Blatter, vol. 17, p. 447; same author, "Die stillschweigende Willenserklarung," p. 293; "Freie Rechtsfindung," pp. iii-vi; "Tat-sachen," pp. 26 seq.; Zitelmann, "Lucken," pp. 45-46; p. 32, note 18. Comp. also Laband, "Staatsrecht," vol. 1, Sec. 57, iiiii.
In either case, both where there are technical gaps and where the framework of the statute is empty, there must be, for the decision of concrete cases, the supplementary function of the judges based on the principles of justice ("aequitas").
It will be the mission of a future theory of the sources of law to supply the proper appreciation, corresponding to its importance, of the judicial law so arising as an integral portion of the body of law in force, and as a most valuable element of the law actually administered.
55 Kipp, "Geschichte der Quellen," p. 11.
56 In such cases the statute refers, expressly or by implication, to some other source whence the rule may be drawn. (Comp. Gustav Schwarz in the Hungarian magazine "Jogallam," vol. 6, p. 99.) In the great majority of cases, this "other source" consists of the kind of social phenomena we call "popular customs." These are simply institutions of social life produced spontaneously and changing from time to time without the interference of official legislation. (Laband, loc. cit. p. 553.) The vague provisions of a statute mentioned in the text (in the present sense, all legal concepts are vague) are capable of being filled with concrete contents by reading them in the light of such social phenomena. We have in mind not merely what has been called "safety-valve concepts," which modern draftsmen of statutes use to make the statute more elastic; we rather refer to any statutory term, the concrete meaning of which depends on the changing circumstances of practical life. ("The nature of the case," so called; comp. Ehrlich, in Harden's "Zukunft," vol. 14, p. 234.)
57 BGB Sec. 242.
58 Danz, "Die Auslegung der Rechtsgeschafte," p. 101.
A theory of legal sources that pays attention to the law as it really is cannot possibly disregard the existence of judge-made law. Such law does actually exist, and theoretical inquiry simply has to recognize and utilize it. This will be done if we divide all rules of law into statutory rules of general obligation on the one hand, and judicial or supplementary rules obligatory in the specific case. The former represent "law" in its strict sense, the latter equity as understood by the Greek or the Roman "aequum."