In the common law tradition, legal fictions are suppositions of fact taken to be true by the courts of law, but which are not necessarily true. They typically are used to evade archaic rules of procedure or to extend the jurisdiction of the courts in ways that were considered useful, but not strictly authorized by the old rule.
Another way of understanding a legal fiction is to say that it is a technique somebody uses in order to benefit from a legal rule which was not necessarily designed to be used in that way. For example, the UK Parliament's rules specify that a person cannot resign from office, but the law also states that a Member of Parliament appointed to a paid office of the Crown must either step down or stand for reelection. The second rule is used to circumvent the first rule.
Legal fictions were used by courts prior to the existence of handling offences. In a situation where A sells stolen property to B, B can then be accused of handling stolen property. Legal fiction has been used to declare that: as A did not have the power to sell the property to B, B was considered to have also stolen the property, and was therefore guilty of theft himself.
The term "legal fiction" is not usually used in a pejorative way in spite of the negative connotation of the phrase, and has been likened to scaffolding around a building under construction.
Jurisdiction of the Exchequer
a simple legal fiction extended the jurisdiction of the Court of the Exchequer
to all types of cases involving debt
. The Exchequer was originally a court that had a specialized jurisdiction involving taxes
and other obligations to The Crown
. The Court had only slight jurisdiction in regards to private matters between litigants. The Exchequer therefore had a much lighter caseload than the King's Bench
and other courts in England. Litigants who commenced an action in the Exchequer Court on a debt, therefore, had to plead that they owed money to the King
, but that they could not pay the debt because the debtor had wrongfully withheld payment. It came to pass that the debt owed to the King became a legal fiction, in that the debtor was not entitled to controvert this allegation in order to oust the Exchequer from jurisdiction. The litigant by using this artifice against the debtor could bring his case into a court with a substantially less crowded docket
Doctrine of survival
The doctrine of survival is also an example of legal fiction. If two people die at the same time or in a manner that renders it impossible to tell who had died first, the older of the two is considered to have died first. This can of course be rebutted by evidence as to the order of death. In the United States
, many jurisdictions have abolished the doctrine of survival by statute; see Uniform Simultaneous Death Act
A similar albeit more complicated legal fiction involved pleadings in the common law
action of ejectment
by which title to real property
was tried. The common law
had a procedure whereby title to land could be put in direct issue, called the writ of right
. One inconvenience of this procedure, though, was that the defendant at his option could insist on trial by wager of battle
, which is to say, trial by combat
, a judicially sanctioned duel
. Most plaintiffs
were unwilling to stake life and limb on the hazard of the battle, so the procedure fell into disuse. Rather, an elaborate tale was told in the pleadings, about how one John Doe
leased land by the plaintiff, but that he was ousted by Richard Roe
, who claimed a contrary lease by the defendant
. These events, if true, led to the assize of novel disseisin
, later called the mixed action in ejectment,
a procedure in which title could ultimately be determined, but which led instead to trial
. This is the origin of the names John Doe
, Richard Roe
, and so forth, for anonymous
parties. The fiction of Doe, Roe, and the leases was not challenged by the parties unless they wished to stake their life and safety on a trial by combat. Wager of battle was in fact not abolished in England
until 1819, though it fell into disuse by the end of the thirteenth century.
Resignation from Parliament
- Main article: Resignation from the British House of Commons
Another legal fiction involves resignation from Parliament
in the United Kingdom
. In 1623 a rule was declared that said that Members of Parliament
were given a trust
to represent their constituencies, and therefore were not at liberty to resign them. In those days, Parliament was relatively weak in comparison to the 21st century, and service was sometimes considered a resented duty rather than a position of power and honour. However, an MP who accepted an "office of profit" from the Crown (including appointment as a minister) was obliged to leave the House and seek re-election, it being feared that his independence was compromised if he be in the King's pay. Therefore, the device was invented that the MP who wished to quit applied to the King for the post of "steward of the Chiltern Hundreds
" or "Steward of the Manor of Northstead
" with no duties or income, but legally an office of profit in the King's gift nonetheless. The first MP to avail himself of the Chiltern Hundreds to leave Parliament was John Pitt
in 1751. The requirement for ministerial re-election has been abolished, but the "Chiltern Hundreds" mechanism has been retained to enable MPs to resign.
A rather significant legal fiction that is still in use today is corporate personhood
). In the common law tradition, only a natural person
could sue or be sued. This was not a problem in the era before the Industrial Revolution
, when the typical business venture was either a sole proprietorship
—the owners were simply liable for the debts of the business. A feature of the corporation, however, is that the owners/shareholders enjoyed limited liability
—the owners were not
liable for the debts of the company. In early lawsuits for breach of contract
, the corporate defendants argued that they could not be sued as they were not persons; if this argument were to be accepted, the plaintiffs would be without recourse, since the shareholders were not liable for the debts of the corporation by statute. To resolve the issue, courts created an elegant solution—a corporation is a person, and could therefore sue and be sued, and thus held accountable for its debts. This ensured that creditors would be able to seek relief in the courts should the corporation default on its obligations, encouraging banks to extend credit
to the corporation. This simple fiction enabled corporations to acquire wealth, expand, and become the preferred organizational form for businesses of all sizes. Corporate personhood has come under criticism recently, as courts have extended other rights to the corporation beyond those necessary to ensure their liability for debts. Other commentators argue that corporate personhood is not a fiction anymore—it simply means that for some legal purposes, "person" has now a wider meaning than it had before and it still has in non-legal uses.
Nationality of corporation
The test of nationality of a corporation is dictated by practical needs. Neither the nationality of the shareholders nor the country in which the corporation was incorporated determines its nationality. A corporation incorporated in India can assume "enemy character" if the persons in de facto control of its affairs are "alien enemies" or are residing in enemy territory or wherever residing, are acting under the control of enemies.
The central idea of this test is called the "brain theory" of the corporation. The other test involves primarily the “locus” of one or a number of activities of the corporation. This is the “locus theory”. Modern corporate jurisprudence takes into consideration six factors in determining the nationality of a corporation
- the state of incorporation
- the principal seat of business
- nationality of the shareholders
- the nationality of overall investment
- the nationality of the management
- the persons controlling the business of corporation
A company incorporated under a particular national statute may acquire a foreign residence so as to be liable to be sued in a foreign country.
It is juristically difficult to reconcile to the notion of a company with different domiciles in different countries. Although generally a company is said to reside at the place of incorporation or at the place of its registered office, that does not rule out residence elsewhere. Therefore, going by this logic, the company may have multiple residence. The fact that the company has an office in a country or has property there does not necessarily indicate that the company is a resident in that country.
The place of registration of a company, like the birthplace of an individual, is not conclusive on the question of residence. Section 6 (3) of the Indian Income Tax Act, 1961 provides an alternative easy test for determination of residence of a company. It says – “A company is said to be resident in India in any previous year, if it is an Indian Company or during that year, the control and management of its affairs is situated wholly in India.” The determination as to at what place or places the control and management of a company abides is a pure question of fact.
Enemy character of the corporation
The corporation is itself incapable of loyalty or enmity. In Daimler Co, v.Continental Tyre and Rubber Co, it was observed: "I know not from what human beings that the character should be derived if resort is not had to the predominant character of its shareholders". However, it is not the shareholders that are always the decisive factor. Sometimes the human beings from whom the character of enmity is to be inferred are to be found in the members of another corporation holding all or practically all the shares of that corporation; sometimes the dominating persons are outsiders controlling the company by nominees.
The dying out of fictions
Legal fictions are fewer in number than they used to be. The elaborate pantomime about poor Doe left homeless by Roe has been abolished by statute
or by reforms in civil procedure
in every common law jurisdiction. The business about Doe and Roe
being the guardians of undisclosed parties who wish to bring suit, or the names of parties unknown, remains in some jurisdictions (although not in England
). The doctrine of survival, although still existing in England, has been abolished in many U.S. states
by the Uniform Simultaneous Death Act
. Also, legal fictions have been invalidated as being contrary to public policy
, as, for example, in the High Court of Australia
's rejection in the Mabo
cases of the doctrine of terra nullius
, the legal fiction that there were no property rights in land in Australia
before the time of European colonization
Some have argued that legal fictions seem a baroque excrescence on the law that ought to be excised by legislation
. This idea occurs to many who first encounter the notion that the law entertains fictions. Jeremy Bentham
sharply criticised the notion of legal fictions, saying that "fictions are to law what fraud is to trade."
In their defence, most legal fictions were harmless vestiges of history whose traces may be worth preserving for their own sake. William Blackstone defended them, observing that legislation is never free from the iron law of unintended consequences. Using the metaphor of an ancient castle, Blackstone opined:
''We inherit an old Gothic castle, erected in the days of chivalry, but fitted up for a modern inhabitant. The moated ramparts, the embattled towers, and the trophied halls, are magnificent and venerable, but useless. The interior apartments, now converted into rooms of convenience, are cheerful and commodious, though their approaches are winding and difficult.
Legal fictions used in fiction
In the novel Joan and Peter
(1918) by H. G. Wells
, Peter's parents die in a sailing accident, and as it is not known which parent dies first, a legal fiction is applied maintaining that the husband, being a man and therefore stronger, lived longer. This decision results in the father's will
determining Peter's legal guardian
. However, later in the novel a witness to the accident declares seeing the mother floundering some time after the father has disappeared, and so the legal fiction is overturned and the mother's will is followed, providing Peter with a new legal guardian. Wells was in fact in error as to the English law, which presumes that the older person died first; the core plot would remain unchanged if Peter's father was younger than his mother.
In Gilbert and Sullivan's The Gondoliers, Giuseppe Palmieri (who jointly serves as King of Barataria with his brother Marco) requests that he and his brother be recognized individually. He is, however, turned down by the Council because the joint rule is a legal fiction.
Limitations on the use of legal fictions
Legal fiction has never been regarded as a source of law. Basically it was an ad hoc remedy forged to meet a harsh or an unforeseen situation. But conventions and practices over the centuries have imparted a degree of stability to the institution. It is now possible to express its ambit and sweep through some formulated propositions.
- A legal fiction should not be employed to defeat law or result in illegality: it has been always stressed that a legal fiction should not be employed where it would result in the violation of any legal rule or moral injunction. In Sinclair v.Brougham 1914 AC 378 the House of Lords refused to extend the juridical basis of a quasi-contract to a case of an ultra vires borrowing by a limited company, since it would sanction the evasion of the rules of public policy forbidding an ultra vires borrowing by a company. In general, if it appears that a legal fiction is being used to circumvent an existing rule, the courts are entitled to disregard that fiction and look at the real facts. The doctrine of “lifting the corporate veil” is applied under those circumstances.
- Legal fiction should operate for the purpose for which it was created and should not be extended beyond its legitimate field.
- Legal fiction should not be extended so as to lead unjust results. For example, the fiction that the wife’s personality is merged in that of the husband should not be extended to deny to the wife of a disqualified man the right to an inheritance when it opens. The wife of a murderer can succeed to the estate of the murdered man in her own right and will not be affected by the husband’s disqualification. [See Indian case ganga v. Chandrabhagabai, 32 Bom.275.
- There cannot be a fiction upon a fiction. For example, in Hindu Law, where a married person is given in adoption, and such person has a son at the time of adoption, the son does not pass into his father’s adoptive family along with his father. He does not lose his gotra and right of inheritance in the family of his birth. The second example would be that the adopted son would by a fiction be a real son of the adoptive father and his wife associated with the adoption. But to say that he will be the real son of all the wives of the adoptive father is a fiction upon fiction.
References and notes