Showing posts with label LEGAL THEORY. Show all posts
Showing posts with label LEGAL THEORY. Show all posts

Tuesday, September 22, 2015

HISTORICAL SCHOOL – SAVIGNY & MAINE

HISTORICAL SCHOOL – SAVIGNY & MAINE      

·         SAVIGNY (1779–1861)                        

Savigny is regarded as the founder of the Historical School.  He emphasised that the muddled & outmoded nature of a legal system was usually due to a failure to understand its history & evolution.  The core of his thesis is found in his essay ‘Vocation of our times for Legislation & Jurisprudence’ 1814.

Historical School was a reaction against priori notion of natural philosophy, i.e., unhistorical assumptions of the natural law & rationalism (as the French Revolution instead of fulfilling the dreams of the people disappointed them).  According to Savigny, the source of law was the general consciousness of the people and cannot be borrowed from outside.  He believed that law has a national character.  A nation, to him, meant only a community of people linked together by historical, geographical & cultural ties.  Law grows with the growth & strengthens with the strength of the people & finally dies away as the nation loses its nationality.  He contended that it is the broad principles of the system that r to be found in the spirit of the people & they manifest themselves in customary rules.  Law is a matter of unconscious & organic growth (i.e., not made deliberately)Law is found & not madeFurther, law is not universal in natureLike language, it varies with people & ageLaw is a product of the people’s lifeLaw has its source in the general or common consciousness (Volksgeist) of the peopleLawyers remain only the mouthpiece of popular consciousness & their work is to shape the law accordingly.  Any law-making should, therefore, follow the course of historical development.  Custom not only precedes legislation, but it is superior to itLaw should always conform to the popular consciousness, i.e., VolksgeistSavigny opposed the codification of law while pointing out the defects of contemporary codes; codification could never cater exhaustively for all problems & it would highlight the loopholes & weakness of the law.  Codification, in Savigny’s view, should be preceded by an organic, progressive, scientific study of the law.  Hence, he never opposed codification of German law for all times to come.

Friedmann summarised the features of Savigny’s theory as follows :-

(i)       Law is discovered or found & can’t be artificially invented or made;

(ii)      Law is fundamentally organic & developmental in character which can be found both in primitive & modern communities in varying forms of popular consciousness, beliefs, customs, traditions, habits & practices which finally contribute to people’s law or Volksgeist.

(iii)     Law is sui generis.  It is peculiar to a people like its language so can’t be of universal validity.

Savigny’s revolutionary contribution is highly appreciated by jurists all over the world.  However, the only defect with the theory was that it exaggerated that aspect.  He ruined his theory by its overemphasis.  Another criticism is that he was so occupied with the source of law that he almost forgot the stream. 
Criticisms of Savigny’s Theory :                                           

(i)       Volksgeist not the exclusive source of law : There r many technical legal rules which never existed in nor has any connection with popular consciousness

(ii)      Inconsistency in the theory : He emphasised national character of law, but at the same time recommended a method by which the Roman law could be adopted to modern conditions & advocated for the acceptance of Roman law as the law of GermanyHowever, this proposition fails to show how an alien system was better able to express it than the indigenous law.

(iii)     Customs not always based on popular consciousness : Many customs originated only for the convenience of a powerful minority such as slavery.  Similarly, customs completely opposed to each other exist in different parts of the same country (local customs).

(iv)     Limitations of Volksgeist : In modern times, function of Volksgeist is that of modifying & adapting rather than creatingToday, it is of little or no relevance

(v)      Other factors : Savigny ignored other factors that influence law such as he forgot the stream.  He overlooked the forces & factors which influence & determine the growth of law, e.g., law relating to trade unions. 

(vi)     Juristic pessimism : His contention was that legislation should conform to existing traditional law or it is doomed, which view will not find favour today.

Applicability of Savingy’s Theory to India :                         

(i)       Federal Constitution : In a federal Constitution (there is a division of powers b/w the federal/Central & the State Govts. & both r independent in their own spheres), law lacks a ‘national’ character as envisaged by Savigny.

(ii)      Source of Indian Constitution : The framers of Indian Constitution incorporated various provisions of the Constitutions of world in order to avoid defects & loopholes that might come in future such as (i) Chapter on F.R.s – U.S.A.; (ii) Parliamentary System of Govt. – U.K.; (iii) Directive Principles – Ireland; & (iv) Emergency Provisions – Germany.  Since it has many features borrowed from other nations, it does not fit properly in the Savigny’s scheme.

(iii)     Common law in India : The process of reception of English law through the agency of the judiciary continued unabatedlaw of torts, doctrine of cruelty, etc.

(iv)     Deliberate legislation–making : In modern times, many new doctrines don’t always reflect the popular consciousness, e.g., reservations for backward classes, uniform civil code, etc.

(v)      Judicial activism : Savigny ignored the creative function of the judgesJudge-made law (precedents) or judicial legislation is a common feature today.

Savigny’s method of the historical school was followed in England by Sir Henry Maine, Lord Bryce & many others who made studies of various legal systems on historical lines.  Maine published his first work ‘Ancient Law’ in 1861.  This is considered to be the manifesto of his lifework in which he stated his general doctrines.  He also wrote Village Communities (1871), Early History of Institutions (1875) & Dissertations of Early Law and Custom (1883).  He was law member in the Council of the Governor–General of India b/w 1861 & 1869, which provided him an opportunity for the study of Indian legal system.

Maine inaugurated both comparative & anthropological approaches to the study of lawUnlike Savigny, Maine favoured legislation & codification, he did not share Savigny’s mystique of the Volksgeist & he used the study of legal history mostly to understand the past & not to determine the future course & standards.

Maine classified the development of law in the following stages
(i)       In the beginning, law was made by the commands of the ruler believed to be acting under the divine inspiration, e.g., Themistes of ancient Greek.  When a king decided a dispute by a sentence, the judgment was assumed to be the result of direct inspiration.  The king was not the maker of law, but merely an executor of judgments of the God.
(ii)      In the second stage, the commands crystallise into customary law.  Customs seem to have succeeded to the prerogatives of the king.  Hwr, they don’t appear to hv pretended to direct inspiration for each sentence & the progress of thought no longer permits the solution of a particular dispute to be explained by supposing an extra–human interposition.
(iii)     In the third stage, the knowledge & administration of customs goes into the hands of a minority, due to the weakening of the power of the original law-makers, usually of a religious nature, e.g. priests.  The ruler is superseded by a minority who obtain control over the law.
(iv)     In the fourth stage, the law is promulgated in the form of a code.


Static & Progressive Societies :

The growth of law was on a uniform basis amongst the primitive societies upto a certain stage of development.  The societies, which do not progress beyond the fourth stage & close the era of spontaneous legal development, r static societies.  The stationary/static societies don’t move forward beyond the era of the codes.

The societies, which go on developing their law by new methods, r called progressive societies.  They develop their law with the help of three instruments / methods, namely, legal fiction, equity & legislation, in order to make law harmonious to social needs & change.

(i)       By use of legal fictions, law is altered to changing needs of the society, while it is pretended that it remains what it was.  Thus, legal fictions change the law according to the changing needs of the society without making any change in the letter of law.  He thought fictions should be abandoned in a society because they made the law more difficult to understand & harmonise legal order.
(ii)      Equity is used to modify the law as a set of principles invested with higher sacredness than those of original law.  Equity came to remove the rigidity in law & to remove injustice, delay & other inconveniences.  According to Maine, equity is a body of rules existing by the side of the original civil law & founded on distinct principles.
(iii)     The final stage comes with the legislation, which is the last effective instrumentality of quick social reform.  Law can be enacted by explicit declarations of intention incorporated in the language of legal enactmentsMaine regarded it as the most desirable method of legal change.

In early societies–both ‘static’ & ‘progressive’, the legal condition of the individual is determined by status, i.e., his claims, duties, etc. are determined by lawThe march of progressive societies witnessed the disintegration of status & the determination of legal condition of the individual by free negotiation on his part.  The development of societies was summed up by Maine in the following famous phrase, “If we employ status to signify the conditions only & avoid applying the term to said conditions, we may say that the movement of the progressive societies has hitherto been a movement from status to contract”.

From a condition of society, in which all the relations of persons wr summed up in the relation of family, we seemed to hv steadily moved towards a phase of social order in which all these relations arose from free agreement of individuals.

According to Maine, status is a fixed condition in which an individual finds himself without reference to his will and of which he can’t divest himself by his own effortsThe group, not the individual, is the primary unit of social life.   With the progress of civilisation, this condition gradually gives way to a social system based on contract.  This is the age of the standardised contract & of collective bargaining (trade unions, business associations, etc.).  Even the contracts, which an individual enters into in everyday life, have been standardised as contract for water, electricity or contract for a carriage with a railway company.  The freedom of contract is, thus, being curtailed every day.

Thus, Maine’s theory of ‘Status to Contract’ does not have much force in the modern age.  In India, the policy of ‘mixed economy’ has assumed greater control over individual liberty & freedom.  The State can impose reasonable restrictions in the interest of the public {Art. 19(6)}.  Pollock says that this theory is limited only to laws of property because personal relations like marriage, minor’s capacity, etc. are still matters of status & not of contract.

However, in one sense, Maine’s theory still holds good.  The trend of legislation in undeveloped or developing countries is to remove personal disabilities, which arise due to membership of a class (status).

On the whole, Maine presented a balanced view of history of lawSavigny had explained the relation b/w community & law, but Maine went further & pointed out the link b/w the developments of bothHis conclusions are based on comparative study of different systems & hence their value is greater than other studies based on Roman Law exclusively.  Influenced Friedmann, Dicey, etc.

In the words of Dr. Friedmann: It can be concluded that the contribution of Maine is an important piece of comparative legal research to a legal theory inspired by principles of historical evolution.  His great contribution to legal theory specially lies in the combination of what is best in the theories of both Montesquieu & Savigny.  Maine’s theory avoids the danger of an excessive disintegration of theoretical laws of legal evolution.  It is also free from the abstract & unreal romanticism, unlike Savigny’s theory.


·         Difference b/w Historical & Analytical School :          


S.No.
Analytical School
Historical School



1.
Law is the command of the sovereign (created by sovereign).
Law is found & not made.
2.
Law is enforced by the sovereign.
Law is independent of political authority & its enforcement.
3.
Example of typical law is statute.  Custom isn’t law, until its validity has been established by a judicial decision/by an Act of legislature.
Example of typical law is custom.  Custom is law by itself.  It does not require State recognition to become a law.
4.
Force of politically organised society is the basis of law.
Law rests on the social pressure.
5.
Judges find themselves to interpretation of statute.
Judges to consider only history of legislation.
6.
Applicable to developed countries – matured legal systems.
Applicable to developing countries – primitive legal institutions of society.




SOCIOLOGICAL SCHOOL OF JURISPRUDENCE

SOCIOLOGICAL SCHOOL OF JURISPRUDENCE  :

Jurists belonging to the sociological school of thought r concerned more with the working of law rather than its abstract content.  Their principal premise is that the law must be studied in action & not in textbooks.  They r concerned with the study of law in relation to society.  They concentrate on actual social circumstances which give rise to legal institutions.  They insist that the legal order is a phase of social control & that it can’t be understood unless taken in its whole setting among social phenomena.

The factors responsible for the emergence of this school are:
(i)       Mental bankruptcy of analytical approach to meet the social demands of modern society;

(ii)      Conflicts b/w individual interests & social interests & the need to reconcile them;

(iii)     Inter-connection b/w law and society.

(iv)     Works of the earliest pioneers of the new interests in society, i.e., Bentham, Renner, Weber, etc.

The following are the main characteristics of this school:

(i)       Sociological jurists r concerned more with the working of the law of the legal order & legal precepts rather than its nature.

(ii)      According to Analytical jurists, law is made consciously; Historical jurists, it is something found; but the Sociological jurists regard law as social institution.

(iii)     Sociological jurists lay stress upon the social purposes / securing social interests rather than on sanction.

(iv)     Sociological jurists look on legal institutions, legal doctrines & legal precepts functionally  ...  this is the functional view of law.

The objective of sociological source of jurisprudence is to resolve immediate problems of society with such tools – legal or extra legal and techniques which promote harmony & balance of interest of society.

·         RUDOLF VON IHERING ( 1818 – 1892 )

Ihering was German jurist.  He has been described as the “Father of Modern Sociological Jurisprudence”. He rejected the Analytical & Historical jurisprudence as jurisprudence of conceptions.  According to him, law is an instrument for serving the needs of individuals of societyHence, the law should be studied in terms of purposes or interests which it sub-serves.  He observed, “The stone does not fall in order to fall, but it must fall because its support is taken away.  Similarly, the man who acts does so not because of anything, but in order to attain something.  As there can be no motion of the stone without a cause, so can there be no movement of the will without purpose.”

According to him, human will is directed towards the furtherance of individual purposesIn realisation of individual purposes, there is bound to be a conflict b/w social interests & individual’s selfish interestsIhering tries to reconcile the individual interest with that of the societySo, law is only an instrument for serving the needs of the society ... its purposes & interestsThe success of the legal process depends on achieving proper balance b/w social & individual interests.  It is through two impulsescoercion & reward, the society compels individuals to subordinate selfish individual interests to social purposes & general interests.  The natural impulse of duty & love also make man to sub-serve social ends.  Therefore, Ihering views law as an instrument of social control balancing of individual interest with that of the society.

·         ROSCOE POUND ( 1870 – 1964 )

Dean Roscoe Pound (RP) has been acknowledged as the unchallenged chief of the sociological school of jurisprudence.  Sociological jurisprudence arose as a reaction to positivism (19th century positivist jurisprudence) since it refused to consider social & economic circumstancesIts main contribution was broadening the scope of jurisprudence.  Law is not an isolated phenomenon, but is a part of social reality.  RP, one of the leading American jurists & pioneer in the American jurisprudence, can be said to be the father of sociological jurisprudence in America.  According to RP, law takes account of social facts / reality.

RP asserts that law is a method or technique for harmonizing conflicting social interestsHis school is known as functional school as it concentrates more on the functional aspect of law.  In modern society, there r various interests & if claims of these groups r not harmonized, there may be strife & thereby production may suffer.  By social engineering, RP means a balance b/w the competing interests in society.  In other words, social engineering is a term used to define the act of balancing of different interests, i.e., individual interests, public interests & social interests.  The aim of social engineering is to build as efficient a structure of society as possible, e.g., if a factory is polluting the environment & an injunction suit is filed for closing it, the court must balance various claims & interests –claim of the mill owner to do his business, claims of the workers in the factory to retain their jobs, claim of local residents to have a clean environment, etc.  RP says law exists for the benefit of the society.  Any law, which is against the interest of the society, can’t be said to be a law. 

Despite the broadness of his views, he gave preference to the practical means in the study of law, which are as under:

(i)       to make a study of the actual social effects of legal institutions & legal doctrine/to look more to the working of law than to its abstract content;

(ii)      to regard law as a social institution which may be improved by intelligent efforts discovering the best means of furthering & directing such effort.

(iii)     to lay stress upon the social purposes which law sub-serves rather than upon sanction.

(iv)     to study what social effect the doctrines of law have produced in past.

(v)      to stand for equitable application of law.

(vi)     to make effort more effective in achieving the purposes of law.

RP’s theory is that the interests are the main subject-matter of law & the task of law is the satisfaction of human wants & desires.  It is the duty of law to make a valuation of interests.  He classified interests under three heads –
(i) Individual;                  (ii) Public; &                             (iii) Social

(i)       Individual InterestsThese are claims or demands or desires involved in & looked at from the standpoint of the individual life such as (i) Personality e.g. freedom of will, privacy, belief & opinion as also honour & reputation; (ii) Domestic relations e.g. relations of husband & wife, parents & children; & (iii) Interests of substance e.g. proprietary rights, inheritance & testamentary succession, contract, continuity of employment, freedom of association.

(ii)      Public InterestsThese are claims or demands or desires asserted by individuals involved in & looked at from the standpoint of political life such as (i) Interests of the State as a juristic person e.g. (a) integrity, freedom of action & honour of the State personality; & (b) claims of the politically organised society as a corporation to property acquired & held for corporate purposes; (ii) Interests of the State as guardian of social interests – this seems to overlap with the next category, i.e., Social Interests.

(iii)     Social Interests – These are claims or demands or desires thought of in terms of social life & generalised as claims of the social group.  They concern: (i) Interest in the preservation of peace, public health & order and maintaining general security; (ii) Interest in preserving social institutions like marriage, domestic & religious institutions; (iii) Interest in preserving general morals by counteracting corruption, drunkenness, prostitution, gambling, etc.; (iv) Interest in conserving social resources; (v) Interest in general progress (economic, political & cultural) which is to be achieved by freedoms of education, speech, trade, property, etc.; & (vi) Social interest in individual life like promotion of human personality, self-assertion, etc. – each individual to be able to live a human life according to the standards of the society.

Every society has certain basic assumptions upon which its ordering rests.  These assumptions are the Jural Postulates of the legal system as embodying the fundamental purpose:

I         In civilized society, men must be able to assume that others will commit no intentional aggressions upon them.

II        In civilized society, men must be able to assume that they may control for beneficial purposes what they have discovered & appropriated to their own use, what they have created by their own labour or what they have acquired under the existing social & economic order.

III       In civilized society, men must be able to assume that those with whom they deal in general intercourse of society (others) will act in good faith.

IV      In civilized society, men must be able to assume that those who engage in some course of conduct will act with due care not to cast an unreasonable risk of injury upon others.

V       In civilized society, men must be able to assume that others, who maintain things or employ agencies, harmless in the sphere of their use but harmful (things) in their normal action elsewhere, will restrain them or keep them within their proper bounds.

RP insists, interests should be weighed on the same plane as it wereOne can’t balance an individual interest against a social interest.  Freedom of the person might be regarded as an individual interest, but it is transferable as an interest of the society that its members should be free.  However, in order to harmonize conflicting interests in modern dynamic society, judge will often have to dispense justice without law, i.e., without following any prescribed rule or precedent.

The task of law is ‘social engineering’, i.e., the balancing of competing interests in societyHe coined the expression ‘social engineering’ to represent the true attitude to law & its functionTo build a society, jurists, lawyers & judges must use law as an engineer does his material sparingly, but produce the best resultsThus, the law is an attempt to reconcile, to harmonize, to compromise, these overlapping & conflicting interests.  His philosophy is essentially one of practical compromise.  RP believes that interests are the chief subject of law & that the task of law in society is the satisfaction of human wants & desires.

Critical Analysis of RP’s Theory : RP’s theory mainly emphasis functional aspects of law & ignores nature & character of law.

(1)      Lack of criteria of evaluationIt is not interests as such, but the yardstick with reference to which they r measured that matter.

(2)      Interests pre-exist lawsIt isn’t true as there r certain social legislations in which the interests r created by the law & others.

(3)      Misleading balancing metaphor – If two interests r to be balanced, that presupposes some ‘scale’ or ‘yardstick’ with reference to which they r measured.  The ‘weight’ to be attached to an interest will vary according to the ideal that is used.

(4)      From legislation to court judgments – RP emphasised ‘judicial activism’.  His theory shifts the centre of gravity from legislation to court judgments.  A list of interests can’t be drawn in advance as new interests r created & recognised by the courtsThe judiciary has limitations & doesn’t have the machinery of enforcing its decisionsIt can’t do what legislature can do.

(5)      Theory lacks general application (Applicability to India) – There r certain competing interests which can never be balanced or reconciled, e.g., interests of labour & capital and landlord & tenant.

(6)      Utility of list of interestsA society constantly develops & changes and the pressures behind interests change tooWhat is an individual interest & what is a social interest is itself a matter of changing political conceptionsThe value or importance to be allotted to each interest can’t be predetermined & the recognition of a new interest is a matter of policy.

Despite the aforesaid criticisms, the significance of RP’s sociological jurisprudence is of world import as it strikes a fine synthesis b/w liberty & equality and b/w freedom & social control through the instrumentality of law.  He is no enemy of abstract philosophy, but he is impressed by certain limits of legal philosophy.  RP asserts, “I don’t believe that the jurist has to do more than recognize the problem & perceive that it is presented to him as one of securing a balance or harmony among them”.

For RP, law is a product of class conflictLaw is not autonomous, but a product of policyLaws reflect the ideology of a ruling classLaws will only be effectiveHis theory is relevant only for an ideal society.  A conflict model & not a consensus model will create interests.  Unless a conflict situation is created, interests can’t be created.  Law is a social force.

In short, the important & remarkable feature of this school is that the jurists are concerned with the study of law in relation to society.  The principal area is that law should be studied in action & not in textbooks.  The inter-connection b/w law & society should be that of such a nature, which can fulfil maximum interest of community.  It should not be an instrument of coercion as a means to sub-serve the ends of the societyIn essence, the sociological jurists look at law functionally











THEORIES OF CORPORATION PERSONALITY IN COMPANY LAW

·         THEORIES OF CORPORATION PERSONALITY :

There are many writers who argue that a corporation has a physical existence having its own will or mind.  On the other hand, there are jurists who consider the personality of a corporation a mere myth or fiction.

(i)       Fiction Theory : Its most famous exponent is Savigny & the principal British advocate is SalmondJuristic persons r only treated as if they r persons, i.e., h/beings.  It regards the legal personality of entities other than h/being as the result of a fiction.  It presupposes that only h/beings r properly called personsCorporation is not real person as it has no will, mind & ability.  Salmond said, “Group has reality or existence, but has no real personality”.  To Savigny, “Every single man & only the single man is capable of rights (only man is capable of right)The original concept of personality must coincide with the idea of man.”  This theory is most applicable to English Law where courts hv not proceeded on any hard & fast principle in recognition of juristic persons.  There is much flexibility & it can accommodate various decisions on legal personality. 

(ii)      Concession Theory : This theory is allied to the fiction theoryIt regards the dignity of being a ‘juristic person’ to be conceded by the State, i.e., the law.  The identification of ‘law’ with ‘State’ is necessary, but not for the fiction theory.  It is a matter of discretion for the StateIt has been used for political purposes to strengthen the State & to suppress autonomous bodies within it.  This grant or concession can be withdrawn by the State, if the entities violate the restraints placed upon them.  This theory is also supported by Savigny, Salmond & Dicey.
(iii)     Realist Theory : Gierke is the principal exponent & Maitland a sympathiser / supporterJuristic persons enjoy a real existence as a group.  Gierke speaks of the group as having real mind, real will & real power of action.  A corporation has all the characteristics which the natural person has.  Corporation is a living organism like natural h/being which possesses rights.     A group / corporation tends to become a unit & to function as such.  Therefore, juristic persons are real in the same sense in which human beings are.      Legal personality is not fictitious, nor it depends upon State’s recognition.

(iv)     Bracket/Symbolist Theory : The principal exponent is Ihering.  According to this theory, juristic personality is only a symbol to facilitate the working of the corporation.  Only the members of the corporation are persons in true sense & around them a bracket is put to indicate that they r to be treated as one unit, when they have formed themselves into a corporation.  The members of a corporation or the beneficiaries of a foundation are the only ‘persons’.  Juristic person is a symbol to put a bracket on the members in order to treat them as a unitIt is only for the sake of convenienceIt assumes that use of the word ‘person’ is confined to human beings.  Its weakness is that it is unable to indicate when the bracket to be removed & the mask lifted for the purpose of taking note of mem. constituting the corp.  Ltd. co. is not same as its members.

(v)      Purpose Theory : The German jurist Brinz propounded this theory & was developed in England by BakerThis theory is based on the assumption that ‘person’ is applicable only to human beings; he alone can be subject-matter of rights & duties.  To so-called juristic persons are not persons at all.  Since jural relations can only vest in human beings, juristic person should be regarded simply as ‘subject-less properties’ designed for certain purposesIt was designed mainly to explain the vacant inheritance, hereditas jacens, of Roman lawIt is not applicable to English of Indian law where judges have repeatedly held that corporations r persons & to challenge this usage would amount simply to using the word differently from judges.  { To Duguit, ‘purpose’ assumed a different meaning.  The endeavour of law is the achievement of social solidarity.  If a given group is pursuing a purpose, which conforms to social solidarity, all activities falling within that purpose deserve protection.  He rejected the idea of collective will as unproven, but there can be, he said, collective purpose. }

(vi)     Hohfeld’s Theory : He drew a distinction b/w h/beings & juristic personsJuristic persons are the creation of arbitrary rules of procedure, which limit the extent of their responsibility.  His theory is closely related to Bracket Theory.  He says, “Only h/beings have claims, duties, powers & liabilities; transactions r conducted by them & it is they who ultimately become entitled & responsible”.  The corporate person is merely a procedural form used to work out a complex mass of jural relation.  It is purely analytical & analyses a corp. out of existence.
(vii)    Kelsen’s Theory : He rejected any contrast b/w h/beings & natural persons & juristic personsThe law is concerned with h/beings only as their conduct is the subject of rules, duties & claims.  He also rejected the definition of person as an entity which has claims & duties.  It is also purely analytical.  It doesn’t explain why the special set of rules is invoked in the case of corp., but not in partnerships. There is no diff. b/w natural & legal person, per Kelsen.

(viii)   Theory of Enterprise Entity : The corporate entity is based on the reality of the underlying enterpriseApproval by law of the corporate form establishes a prima facie case that the assets, activities & responsibilities of the corp. r part of the enterprise.  Where there is no formal approval by law, a., a. & r. of the unit r determined by the underlying enterprise.

(ix)     Organism Theory : This theory is closely associated with the Realist Theory.  It asserts that groups r persons because they r organisms & correspond to h/beingsThey have a real lifeThey have a group will, independent of the wills of its component members

(x)      Institutional Theory : This theory is also closely connected with the Realist Theory.  It marks a shift from an individualist to a collective outlook.    The individual is integrated into the institution & becomes part of it

Conclusions : In the first place, no theory takes into account all aspects of the problem and, thus, criticism becomes easy.

The theories, that have been considered, are philosophical, political or analyticalThey are not so much concerned with finding solutions to practical problems as with trying to explain the meaning of the word ‘person’.  Courts, on the other hand, faced with the solving of practical problems, have proceeded according to policy, not logic.  The objectives of the law are not uniform.


There is no essence underlying the various uses of ‘person’Its application to things other than human beings is purely a matter of legal convenience.             If corps. aggregate are ‘persons’, then p/hips & trade unions should be too.  Neither the linguistic nor legal usages of ‘person’ are logicalThe error lies in supposing that there should always be logic.






THEORIES OF CORPORATION PERSONALITY

·         THEORIES OF CORPORATION PERSONALITY :

There are many writers who argue that a corporation has a physical existence having its own will or mind.  On the other hand, there are jurists who consider the personality of a corporation a mere myth or fiction.

(i)       Fiction Theory : Its most famous exponent is Savigny & the principal British advocate is SalmondJuristic persons r only treated as if they r persons, i.e., h/beings.  It regards the legal personality of entities other than h/being as the result of a fiction.  It presupposes that only h/beings r properly called personsCorporation is not real person as it has no will, mind & ability.  Salmond said, “Group has reality or existence, but has no real personality”.  To Savigny, “Every single man & only the single man is capable of rights (only man is capable of right)The original concept of personality must coincide with the idea of man.”  This theory is most applicable to English Law where courts hv not proceeded on any hard & fast principle in recognition of juristic persons.  There is much flexibility & it can accommodate various decisions on legal personality. 

(ii)      Concession Theory : This theory is allied to the fiction theoryIt regards the dignity of being a ‘juristic person’ to be conceded by the State, i.e., the law.  The identification of ‘law’ with ‘State’ is necessary, but not for the fiction theory.  It is a matter of discretion for the StateIt has been used for political purposes to strengthen the State & to suppress autonomous bodies within it.  This grant or concession can be withdrawn by the State, if the entities violate the restraints placed upon them.  This theory is also supported by Savigny, Salmond & Dicey.
(iii)     Realist Theory : Gierke is the principal exponent & Maitland a sympathiser / supporterJuristic persons enjoy a real existence as a group.  Gierke speaks of the group as having real mind, real will & real power of action.  A corporation has all the characteristics which the natural person has.  Corporation is a living organism like natural h/being which possesses rights.     A group / corporation tends to become a unit & to function as such.  Therefore, juristic persons are real in the same sense in which human beings are.      Legal personality is not fictitious, nor it depends upon State’s recognition.

(iv)     Bracket/Symbolist Theory : The principal exponent is Ihering.  According to this theory, juristic personality is only a symbol to facilitate the working of the corporation.  Only the members of the corporation are persons in true sense & around them a bracket is put to indicate that they r to be treated as one unit, when they have formed themselves into a corporation.  The members of a corporation or the beneficiaries of a foundation are the only ‘persons’.  Juristic person is a symbol to put a bracket on the members in order to treat them as a unitIt is only for the sake of convenienceIt assumes that use of the word ‘person’ is confined to human beings.  Its weakness is that it is unable to indicate when the bracket to be removed & the mask lifted for the purpose of taking note of mem. constituting the corp.  Ltd. co. is not same as its members.

(v)      Purpose Theory : The German jurist Brinz propounded this theory & was developed in England by BakerThis theory is based on the assumption that ‘person’ is applicable only to human beings; he alone can be subject-matter of rights & duties.  To so-called juristic persons are not persons at all.  Since jural relations can only vest in human beings, juristic person should be regarded simply as ‘subject-less properties’ designed for certain purposesIt was designed mainly to explain the vacant inheritance, hereditas jacens, of Roman lawIt is not applicable to English of Indian law where judges have repeatedly held that corporations r persons & to challenge this usage would amount simply to using the word differently from judges.  { To Duguit, ‘purpose’ assumed a different meaning.  The endeavour of law is the achievement of social solidarity.  If a given group is pursuing a purpose, which conforms to social solidarity, all activities falling within that purpose deserve protection.  He rejected the idea of collective will as unproven, but there can be, he said, collective purpose. }

(vi)     Hohfeld’s Theory : He drew a distinction b/w h/beings & juristic personsJuristic persons are the creation of arbitrary rules of procedure, which limit the extent of their responsibility.  His theory is closely related to Bracket Theory.  He says, “Only h/beings have claims, duties, powers & liabilities; transactions r conducted by them & it is they who ultimately become entitled & responsible”.  The corporate person is merely a procedural form used to work out a complex mass of jural relation.  It is purely analytical & analyses a corp. out of existence.
(vii)    Kelsen’s Theory : He rejected any contrast b/w h/beings & natural persons & juristic personsThe law is concerned with h/beings only as their conduct is the subject of rules, duties & claims.  He also rejected the definition of person as an entity which has claims & duties.  It is also purely analytical.  It doesn’t explain why the special set of rules is invoked in the case of corp., but not in partnerships. There is no diff. b/w natural & legal person, per Kelsen.

(viii)   Theory of Enterprise Entity : The corporate entity is based on the reality of the underlying enterpriseApproval by law of the corporate form establishes a prima facie case that the assets, activities & responsibilities of the corp. r part of the enterprise.  Where there is no formal approval by law, a., a. & r. of the unit r determined by the underlying enterprise.

(ix)     Organism Theory : This theory is closely associated with the Realist Theory.  It asserts that groups r persons because they r organisms & correspond to h/beingsThey have a real lifeThey have a group will, independent of the wills of its component members

(x)      Institutional Theory : This theory is also closely connected with the Realist Theory.  It marks a shift from an individualist to a collective outlook.    The individual is integrated into the institution & becomes part of it

Conclusions : In the first place, no theory takes into account all aspects of the problem and, thus, criticism becomes easy.

The theories, that have been considered, are philosophical, political or analyticalThey are not so much concerned with finding solutions to practical problems as with trying to explain the meaning of the word ‘person’.  Courts, on the other hand, faced with the solving of practical problems, have proceeded according to policy, not logic.  The objectives of the law are not uniform.


There is no essence underlying the various uses of ‘person’Its application to things other than human beings is purely a matter of legal convenience.             If corps. aggregate are ‘persons’, then p/hips & trade unions should be too.  Neither the linguistic nor legal usages of ‘person’ are logicalThe error lies in supposing that there should always be logic.






LEGAL PERSONALITY

PAPER  IV  :  LEGAL  THEORY


I)       LEGAL PERSONALITY (UNIT – IV) :

Jurisprudence studies legal rights & duties.  It is necessary that there should be a person to whom legal rights & duties may be ascribed.  The term ‘person’ or ‘personality’ has been the object of legal & philosophical controversy from times immemorial.  A person in law is not confined to any human being, but is given an extended meaning which includes entities / associations other than h/beings

(i)       The term ‘person’ covers under its legal shadows not only natural persons, but also the artificial persons.  Natural persons mean human beings or those who r born by nature.  Legal persons mean beings & things which r treated as persons by law.  They r created by law only.

(ii)      In modern times, with very few exceptions, legal personality is granted to all the human beings.  However, sometimes, human beings are not legal persons – minors, lunatics, etc.  The legal personality granted to human beings begins at birth and ends with the death.

(iii)     Legal theory assumes a person an entity capable of suing & being sued.

The word ‘person’ is derived from the Latin term ‘persona’, which meant the actor’s mask through which his voice must be soundedLater on, it came to be used for those who could bear rights & duties. But at present, it has acquired the meaning of denoting a being which is capable of sustaining legal rights & duties.  Thus, any person, whether natural or artificial, capable of rights & duties would be a legal person irrespective of the fact that he is a human being.

Salmond observes, “A person is any being, whether a human being or not, whom the law regards as capable of rights & duties”.  Gray defines ‘person’ as an entity to which rights & duties may be attributed.

It, therefore, means human being or a body of persons or a corporation or a legal entity that is recognised by law as the subject of rights & duties.  In other words, the term ‘legal person’ has immediate relationship with legal rights & duties as without that, there can’t be a legal person.

The Legal Status of Animals : In ancient times, animals were regarded as persons.  In middle age also, there r instances of the trial of birds & animals.  In modern times, no legal system recognises animals as bearer of rights & dutiesAnimals do not have rights & duties and, thus, they can’t be person or legal  person.   They r merely things & no animal can be the owner of property.  A trust made in favour of animals is a trust of imperfect obligation & can’t be enforced.  However, there r two cases in which beasts may be thought to possess legal rights – (i) cruelty to animals is an offence; & (ii) a trust for the benefit of a particular class of animals is valid & enforceable as a public charitable trust in England.  Similarly, in India, a charitable trust can be created for the maintenance of stray cattle, broken horses & other animals.

The Legal Status of Dead Men : Generally speaking, the personality of a human being may be said to commence existence on birth & cease to exist at death.  Dead men are no longer persons in the eyes of law.  Dead men don’t remain as bearers of rights & duties as the action dies with the death of a man (actio personalis mortiur cum persona). 

But the law, in certain matters, recognises & protects the desires & interests of the deceased.  There are three rights in this respect – (i) about the deceased’s body; (ii) his reputation; & (iii) his estate.  So far as dead man’s body is concerned, the criminal law secures burial to all dead menThe reputation of a dead man is also to some extent protected by the criminal law.  A libel upon dead man is punished as misdemeanour – but only when its publication is in effect an attack upon the interests of the living persons.  Similarly, the law recognises the right of the deceased to regulate & control his property according to his desire even when he is not living.  But here, deceased has no right over property and only the person in whose favour Will is made has the legal rights in it after the death of the testator. 

The Legal Status of Unborn Persons : Though the dead possesses no legal personality, it is otherwise with the unborn.  There is nothing in law to prevent a man from owning property before he is born.  Law recognises legal personality to unborn personsThe unborn person has a legal personality & possesses legal rights & dutiesA child in mother’s womb is by fiction treated as already born & regarded as person for many purposesThus, a gift may be made to a child, who is still in the mother’s womb

In Hindu law, a child in womb is considered in existence & entitled to inherit property if he is born aliveIf a partition takes place among the coparceners while the child is in womb, a share is to be reserved for him.  If the share is not reserved, then the partition would re-open & the new born boy would take the same share which he would have taken if he was born before partition.

Under IPC, injury to a child in womb is a punishable offence.  Further, doing something which prevents the safe delivery of a child taking birth alive has also been considered as an offence under the criminal law.

Apart from these rights, he is considered to be capable of owning personal rights also.  If a pregnant woman is awarded death sentence, the execution of sentence shall be postponed till she delivers the child

In short, an unborn person is endowed with legal personalityHowever, the rights conferred on unborn person are contingent upon his taking birth alive when they are transformed into vested rights.     

To reiterate, a legal person is any subject-matter other than a human being to which the law attributes personality such as institutions, groups of human beings, corporations, etc.  It is by a fiction of law that they are treated persons.
In State Trading Corporation of India v. Commercial Tax Officer, Hidayatullah, J. dealt at length with the effect of incorporation of a company or corporation & held that the idea of legal personality emerges from the moment of incorporation.  The incorporation has no physical existence.  It is merely an abstraction of law.
There are two kinds of corporations – corporation aggregate & corporation sole.

·         Corporation Aggregate :
1.   A corporation aggregate is an association of h/beings united for the purpose of forwarding their certain interests, e.g. Ltd. Cos.
2.   Such a company is formed by a number of persons, who as shareholders of the company contribute or promise to contribute to the capital of the company, for furtherance of a common object.
3.   Their liability is limited to the extent of their share-holding in the company.  A limited company is thus formed by the personification of the shareholders.
4.   The property of the company is not that of the shareholders, but its own property.  Its assets & liabilities r different from that of its members.  The shareholders have a right to receive dividends from the profits of company but not the property of the company.  
5.   For certain purposes, company has an independent existence from those of its members & it is for this reason that the co. may become insolvent but its members may still be rich & wealthy.
6.   Conversely also, the insolvency of the members does not adversely affect the co. & it may continue to have a flourishing business.
7.   The death of members doesn’t finish the existence of the co., e.g., in the AGM of a co., all the members died due to a bomb-explosion, but it didn’t affect the existence of the co. & it continued to function as before.
8.   It can sue & be sued in its own name.

·         Corporation Sole :
1.   Corporation sole is an incorporated series of successive persons.  It consists of a single person who is personified & regarded by law as a legal person.   In other words, a single person, who in exercise of some office or function, deals in the legal capacity & has rights & duties.
2.   Generally, corporation sole r the holders of a public office which r recognised by law as corporation.
3.   Its chief characteristic is "continuous entity endowed with a capacity for endless duration".  A corporation sole is perpetual, e.g., the President of India, the Governor, the British Crown.
4.   The UOI and the States have also been recognised as corporate entities u/Art. 300.  The Ministers of the Union or State Govt. r not legal or constitutional entity, therefore, they r not corporation sole as they r appointed by the President or the Governors and are 'Officers' within the meaning of Art. 53 & 154.  They r not personally liable for their acts or omissions nor r they directly liable in a Court of Law for their official acts.  It is the State or the Centre which is liable for tort or breach of contract committed by a Minister in his official capacity.
5.   A Corporation sole is distinguishable from "a mere succession of officers or persons exercising the same rights."  If a corporation sole exists, an occupant of an office can generally acquire property for the benefit of his successors as well as himself, he can generally recover for injury inflicted on property pertaining to the office while such property was in the hands of his predecessor and he can sometimes enter into a contract which will bind or endure to the advantage of his successors."
6.   Corp. sole is an illustration of double capacity.  The King of England exercises the function of the Crown & in his capacity as the constitutional head, he can confer rights & duties upon himself as an individual.  The natural person may owe a duty to himself as a legal person.  Same is the position of the President of India.  As regards the British Crown, it is generally said, "The king is dead, long live the king."  This proverb indicates the double capacity of the Crown as a corp. sole, the first part refers to the Crown as a natural person, i.e., individual, while the latter part expresses his position as a legal personality.  It means that even after the death of the king, his legal capacity as a Crown remains in existence as a corp. sole.

7.   The object of corpn. sole is similar to that of corpn. aggregate.  In it a single person holding a public office holds the office in a series of succession, meaning thereby that with his death, his property, right & liabilities etc., do not extinguish but they r vested in the person who succeeds him.  Thus on the death of a corporation sole, his natural personality is destroyed but legal personality continues to be represented by the successive person.  In consequence, the death of a corpn. sole does not adversely affect the interests of the public in general.