Custom and the Formalization of Mineral Property Rights: Evidence from the Supreme Court of Colorado, 1868-1895

Eric Alston (University of Colorado Boulder)

Abstract: The question of when a court should look to custom as a source of law is not a new one, and can arise in frontier contexts where a formal legal authority is being imposed for the first time. This article explores this dynamic, the role of custom in formalization of property rights, in the context of case law from the Supreme Court of Colorado (hereinafter the “Court”) from 1868-1895. The analysis suggests the Court played an important role in facilitating the transition from an informal property rights regime to a formal one. Initially, faithfulness to local decisionmaking involved custom as a source of law, but the role of custom diminished over time. Statutory and common law precedent emerged to fill the remaining gaps in the law, and by 1890, custom in mineral claim disputes disappeared almost entirely. This dynamic reflects the fact that an authority imposing formal control for the first time faces a choice about the extent of actual legal change its system of formalization will introduce. One way to manage the transaction costs associated with this formalization is to codify preexisting informal rules, provided they arose from a context where conflict over customs and rules was minimal. The cases the Supreme Court of Colorado treated governing mineral location claims suggest that recognition of custom can be a cost-minimizing form of legal gradualism.

Download the paper