The Person in Imagination or PersonaFicta of The Corporation
The Person in Imagination or PersonaFicta of The Corporation
The Person in Imagination or PersonaFicta of The Corporation
Volume 9 | Number 4
May 1949
Repository Citation
Maximilian Koessler, The Person in Imagination or Persona Ficta of the Corporation, 9 La. L. Rev. (1949)
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The Person in Imagination or Persona
Ficta of the Corporation
Maximilian Koessler*
I. Introduction
The history of the person in imagination or persona ficta can
be traced back to the Middle Ages. In the law of the Catholic
Church, this sinister child of conceptualistic thought sprang up
from case law concerning certain concrete legal problems that
had high actuality in those days. It was originally a figure of
speech: the metaphoric expression for a dogmatic fiction 1 which
was believed to be needed for a functional purpose. It should
help to recuperate a convenient lawyer's tool, possessed, under
different names, by the Roman law, 2 but forgotten by subsequent
generations. Reference is herewith made to the possibility of at-
taching the status of separate legal entity or of a rights and duties
bearing unit 3 to something which is not a human individual, but
an organization of several human beings or a human institution.
Perhaps it is well to remember in this connection that legal per-
sonality is not a necessary adjunct of the physical existence of a
human individual. 4 On the other hand, law may attribute this
capacity to a social organism or to a social institution, in other
words, to something different from a human individual.
When the dogmatic fiction, personifying separate legal entities
other than human individuals, had conquered the legal world,
the term "person," originally the exclusive designation of man,
came in addition to mean any rights and duties bearing unit. 5
* Member, New York Bar; Legal Division, Office of the Military Govern-
ment for Bavaria.
1. Against the use of dogmatic fictions in law, see Bentham, The Theory
of Legislation (Ogden's edition, London, 1931) 71, 74. Cf. however, Vaihinger,
Die Philosophie des Als Ob (9 and 10 ed., Leipsig, 1927) xxiv, cited with ap-
proval by Cardozo, The Paradoxes of Legal Sciences (1928) 33, 34.
2. Sohm, Institutionen, Geschichte und System des Roemischen Priva-
trechts (17 ed., Munich and Leipzig, 1923) 200; Buckland, Textbook of Roman
Law,,(2 ed., Cambridge, 1932) 175; Buckland and McNair, Roman Law and
Common Law (Cambridge, 1936) 52; 2 Savigny, System des Heutigen Roe-
mischen Rechts (Berlin, 1840) 241, n. 3.
3. On the corresponding German term "Rechtssubjekt," see Jellinek,
Allgemeine Staatslehre (Berlin, 1900) 150, 151.
4. Illustrated by the institution of slavery. Young, Foreign Companies
and other Corporations (Cambridge, England, 1912) 51; Weber, Rechtssocio-
logie (2 ed., Tuebingen, 1925) 439; Seagle, The Quest for Law (1941) 267.
5. Plucknett, Words (1928) 14 Corn. L.Q. 263, 266; Neckam, The Person-
ality Conception of the Legal Entity (1938) 49.
[485)
LOUISIANA LAW REVIEW [VOL. IX
is, a reality from the juristic point of view, nothing more and
26
nothing less."
Lord Coke's learned disquisition on the case of Sutton's Hos-
pital is, indeed, less responsible for the fiction theory, as such,
than for one of its peculiar ingredients within the corporation
doctrine of the common law:2 the so-called franchise or conces-
sion theory.28 This idea, which has meanwhile become obsolete
in the Anglo-American law, ran somewhat like this: Since the
corporation was a legal rather than a natural creature, it could
not exist without an individual license for its creation, to be
granted by the legislative body which, in those early days, was
the king.2 9 Later on, an act of Parliament or, in the American
states, a so-called private statute, authorizing the establishment
of a specifically indicated corporation, took the place of a Royal
Charter. As a final development, statutes would in a general way,
that is, without reference to a specific corporation, fix in advance
the conditions under which corporations could be created with
validity before the law. When this stage was reached, the demise
of the franchise theory had become a fact. 0
schaftsrecht, op. cit. supra note 10, at XXIV. Similarly, Pollock, Has the
Common Law Received the Fiction Theory of Corporations? (1911) 27 L.Q.
Rev. 219, 223, n. 2.
36. Savigny was one of the founders of the so-called Historical School of
Law and his writings are in general representative of this specific approach
to legal problems. However, his doctrine on the juristic person was not re-
lated to the Historical School of Law, but due to the impact, upon his trend
of legal thought, of the philosophy of Kant and Kant's adepts. Binder, Das
Problem der Juristischen Persoenlichkeit (Leipzig, Germany, 1907) 10.
37. 2 Savigny, op. cit. supra note 2, at 2.
38. Id. at 236.
39. Id. at 240.
40. 3 Savigny, op. cit. supra note 2, at 89.
LOUISIANA LAW REVIEW [VOL. IX
that juristic persons are more than merely legal realities, that
they are in addition organic realities, the above-mentioned full-
fledged fictionalists, as we propose to call them, deny not only
the organic existence but even the legal existence of juristic per-
sons, that is, even the truth of the allegation that they are sepa-
rate legal entities, or separate rights and duties bearing units.
The fullfledged fictionalists, it is herewith submitted, are in
their corporation theories involved in the same kind of error,
though with a reversed practical effect, as was inherent in the
association theories of noted exponents of the so-called Natural
School of Law. The latter, ignoring the legal distinction between
the conceptions of partnership on the one hand, corporation on
the other hand, treated each association as a separate legal per-
sonality. 54 Contrariwise, the fullfiedged fictionalists, substantially
if not in terms, consider each corporation as a partnership. How-
ever, definite rules of positive law, respectively applicable either
only to partnerships or only to corporations, prohibit such a
merger.
To be sure, a given system of law can do without the con-
55
ception or device of a juristic person, especially of a corporation.
Moreover, even if it possesses that device, it need not couple it
with a terminological personification of the separate corporate
entity, but may continue to reserve the term "person" for human
individuals.' Again, even a system of law which ascribes sepa-
rate legal entity to things different from human individuals need
not apply this technical device with such a logical consistency
as to reach a breaking point, from a pragmatic viewpoint, but
54. The Natural School of Law merged the conception of partnership
with that of corporation by treating each association as a "moral," that Is, a
juristic person. The impact of this trend is clearly visible in the Austrian
Civil Code (1811), the chief draftsman of which, Professor Franz Zeiler of
the University of Vienna, was strongly addicted to the Natural School of
Law. Wellspacher, Das Naturrecht und das ABGB, in 1 Festschrift zur
Jahrhundertfeier des Allgemeinen Buergerlichen Gesetzbuchs (Vienna, 1911)
173.
55. It would seem to be doubtful whether the conception of separate
corporate entity existed in the Year Book period of the common law. Ching
Wang, The Corporate Entity Concept (or Fiction Theory) in the Year Book
Period (1942) 58 L.Q. Rev. 498 and (1943) 99 L.Q. Rev. 72.
56. Supra note 5. In the Roman law, which clearly distinguished a part-
nership (societas) from a corporation (universitas), the latter was not called
a person. The Latin word "persona" originally designated the mask which
the actor put on in order to indicate thereby the man In the play whom he
represented on the scene. By a conversion of meaning which is rather fre-
quent in the development of languages, the term "persona" came to indicate
the human being represented by the actor, and at an even later phase, any
human individual. The still further development that "person" may indicate
both a human individual and also another unit constituting a separate legal
entity was not reached by the Romans.
19491 PERSON IN IMAGINATION
self, his organic theory considers the state and other associations
as social organisms,6 3 thus claiming the existence of collective
organisms beyond and above the individual organisms.0 4 In addi-
tion to the will of the individual there exists, he maintains, a col-
lective will incorporated in various social units which become
juristic persons the moment they are recognized as separate legal
entities.6 The collective personality is, he explains, the capacity
of an association to be a rights and duties bearing unit, as such
different, of course, from a mere aggregate of several individ-
uals. 6 He expressly states that the collective person is like the
individual person, a real rather than an imaginary entity, even
though its legal status, again like that of the individual person, is
derived from a rule of law. 7 The gist of his organic theory, as he
himself summarizes it, is his conception of the corporation as a
collective unit existing in reality rather than as a phantom or
fiction.68
Gierke himself warned against antropomorphic misrepre-
sentations of his theory. 69 He was on sound sociological ground
when he emphasized the existence of social organisms as an ele-
mentary fact of human society. 70 However, this observation does
not add substantially to the legal analysis of the corporate per-
sonality.71 Moreover, it is subject to an important qualification.
Under a given system of law, a separate legal entity, other than
the human individual, may be established without the substratum
of an existing social organism. 7 2 On the other hand, a given sys-
tem of law may not yet have achieved the technical capacity of
assigning separate legal entity to a social organism. Legal per-
sonality is thus far from being an adjunct of the organic exis-
tence of a social body. It is a legal phenomenon, resting on a
completely different plane from the sociological phenomenon
highlighted by Gierke's organic theory.
63. The main characteristic of organisms, according to Gierke, is their
unity in plurality. Wolff, On the Nature of Legal Persons (1938) 54 L.Q. Rev.
494, 500.
64. Gierke, Das Wesen der Menschlichen Verbaende, op. cit. supra note
10, at 13.
65. Gierke, Juristische Person, op. cit. supra note 10, at 847.
66. 1 Gierke, Deutsches Privatrecht, op. cit. supra note 10, at 469.
67. Id. at 470.
68. Gierke, Die Genossenschaftstheorie, op. cit. supra note 10, at 5.
69. Gierke, Das Wesen der Menschlichen Verbaenie, op. cit. supra note
10, at 14.
70. Vinogradoff, Juridicial Persons (1924) 24 Co. L. Rev. 594, 604; Cardozo,
The Paradoxes of Legal Science (New York, 1928) 93; 2 Roguin, La Science
Juridique Pure (Paris, 1923) especially at 435. But cf. MacIver, The Modern
State (Oxford, 1926) 473, 474.
71. Freun, The Legal Nature of Corporations (1897) 14.
72. The best illustration is probably the so-called one-man company.
Warren, Corporate Advantages Without Incorporation (1929) 845, 846.
1949] PERSON IN IMAGINATION
Conclusion
The end has been reached of our critical bird's eye view of
the most important doctines on the nature of corporate person-
ality. The purpose was to survey within the compass of a short
article a field which is covered by an almost prohibitive volume
of literature. This naturally imposed rigid limitations on the se-
lection of material thought to be representative of certain trends
of jurisprudential analysis. It is nevertheless hoped that enough
has been presented to serve as an initial briefing on a topic which
was always a favorite of legal writers.
By approaching the subject matter from a historical angle,
the attempt could be made to show that "corporate person" or
"juristic person" in general was only so long a metaphoric con-
ception and in this limited sense something fictional as the pri-
mary meaning of the term "person" was limited to a designation
of the individual physical being. This stage was abandoned, how-
ever, when the term "person" was so amplified in its meaning as
to include even in a non-metaphoric sense any separate legal en-
tity or rights and duties bearing unit (Rechtssubjekt), whether
it be an individual physical person or an association or a social
organism or a social institution.
Once this point was reached, the originally pragmatic device
of legal technique to refer to the corporation or to the juristic
person by way of calling it a fictitious person or persona ficta
had become obsolete and began to create confusion in certain
fields of law, especially in American constitutional law and in
international law, rather than to promote sound legal develop-
ment. Correctly understood, "persona ficta" can nowadays hardly
be anything else than a synonym for "corporate person." Suppose
we do away with that cryptic phrase altogether rather than let
modern law be further haunted by a ghost from the realm of
medieval philosophy of law? It does not serve any practical pur-
pose, but constitutes a permanent temptation to speculations
about the reality or unreality of corporate personality which,
nowadays, have no more sense than speculations about the reality
or unreality of the conception of property or of other established
institutions of a legal nature. All of them are, of course, based
upon a given system of law, but within the thus ordered society
they are as real as the morning sun or the evening star.