Jurisprudence and Legal Theories · Chapter 8
Study notes aligned to the official NEB syllabus.
Personality is one of the basic ideas of jurisprudence. The whole of law works through persons. Every right is held by a person. Every duty is borne by a person. But the legal idea of a person is not the same as the everyday idea of a human being. The law decides for itself who will count as a person. In doing so it includes some beings that are not human, such as companies. It also limits the capacity of some human beings, such as young children. This unit looks at four things. It explains what legal personality means. It explains who the law treats as a person. It explains the theories of the artificial corporate person. Finally it explains the special position of the dead and the unborn.
In law a person (व्यक्ति) is any being that the law treats as able to have rights and bear duties. Legal personality (कानुनी व्यक्तित्व) is the capacity to be the holder of legal rights and duties. So the legal meaning of "person" is wider than the ordinary meaning. It is not limited to human beings. A person in law is simply a bearer of rights and duties. The law may give this status to beings other than individual humans. The law may also deny its full use to certain human beings.
The point can be shown from both directions. A trading company is not a human being. Yet the law treats it as a person. It can own land, borrow money and be sued. Now take the other direction. A two-year-old infant is clearly a human being and a person in law. But the law limits his capacity to use rights and take duties. He cannot make a valid contract. He cannot manage his own property. A guardian acts for him instead. A person of unsound mind also has personality but a limited capacity. Legal personality is therefore made and recognised by the law. The law decides who will count as a person. It also decides how far each person may act.
Persons recognised by law are of two kinds. A natural person is a human being that the law treats as able to have rights and duties. A legal person is any subject other than a human being that the law gives personality to. It is also called an artificial, juristic or fictitious person. The law treats it as able to have rights and duties of its own. The commonest examples are companies and corporations. They are registered under the law. In their own name they can own property and make contracts. They can sue and be sued. They do this quite separately from the individual members who make them up. Other examples are recognised in different systems. These include registered societies and cooperatives. They include universities, municipalities and other public bodies. They also include funds or estates set aside for a purpose, such as a trust or an endowment (guthi).
The great practical value of the legal person is its separate and continuous existence. Suppose five partners form a company. Later one partner dies. Another sells his shares to an outsider. The company itself continues unchanged. It keeps its property in its own name. Its contracts and debts stay its own. They are not the personal debts of the members. This separateness also lets the members limit their liability. Their loss is limited to what they have invested. In Nepal, companies incorporated under the company law are legal persons. They have exactly this separate legal existence. A guthi (endowment) is set aside for a religious or charitable purpose. It is a familiar Nepali example of property held for a purpose. It is treated as having a continuing legal life of its own. So the legal person is not an idle abstraction. It is a device that makes modern commerce, public administration and charitable endowment possible.
Jurists have long argued about the true nature of the corporate (legal) person. Several theories have been put forward. Each one throws light on one side of the problem.
The fiction theory is linked with Savigny. It holds that only human beings are real persons. The personality of a corporation is a fiction created by the law for convenience. The corporation is treated as if it were a person. But it has no real will of its own. On this view a company can act only through the real human beings who are its directors and members.
The concession theory holds that legal personality is a privilege granted by the state. An entity is a person only because the law grants it that status. This theory stresses the power of the state. The state can create and withdraw personality. A company comes into being on registration. It ceases to exist when it is struck off.
The realist (organic) theory is linked with Gierke. It holds the opposite of the fiction theory. It argues that a group or corporation has a real existence of its own. It has a real collective will. A club or a trade union plainly has a common life beyond its individual members. So the law merely recognises a person that already exists. It does not invent one.
The bracket or symbolist theory is linked with Ihering. It holds that only the individual members are real. The corporate name is just a bracket or symbol. It is used for convenience to refer to the members together. This is much like how "the firm" is shorthand for its partners.
The purpose (purpose-property) theory is linked with Brinz. It holds that the so-called legal person is really property dedicated to a purpose. The rights given to the corporation are really rights without a human owner. They are held for the purpose. A charitable endowment or guthi shows the idea. It is set up to serve a purpose rather than any individual.
No single theory is accepted by everyone. Each one explains one face of the corporate person. In practice the law simply treats the corporation as a separate person. It can hold rights and duties.
As a rule, legal personality begins at birth and ends at death. So neither the dead nor the unborn is, in general, a full legal person. The law, however, still protects certain interests connected with each.
Dead persons. A dead person is, in general, not a legal person. He can have no rights or duties. Yet the law still gives limited protection to certain interests connected with him. First, a person's will is respected. His property is distributed after death according to law or his testament. Suppose a man directs in a valid will that his house pass to his daughter. The law gives effect to that wish, even though he is no longer a person. Second, the law protects the decent disposal and dignity of the body. It punishes any desecration of it. Third, a person's reputation may be protected to a degree even after death. These protections do not exist because the dead man is a person. They exist to honour his earlier wishes. They also protect the feelings and interests of the living who survive him. In Nepal the Muluki Civil Code 2074 governs succession. It also governs the carrying out of a deceased person's wishes about his property.
Unborn persons. A child in the womb is not yet born. So it is not yet a full legal person. But the law still recognises and protects certain of its interests. It does this in anticipation of its birth. The condition is that the child is later born alive. An unborn child may inherit property. It may take a share in a partition. Suppose a father dies while his wife is pregnant. The share of the child in the womb may be kept and reserved. It then vests on the child being born alive. The Muluki Civil Code 2074 deals with such matters of succession and partition (अंशबण्डा). The destruction of an unborn child is also treated as a wrong under the Muluki Penal Code 2074, subject to the law's provisions. So the rights of the unborn are contingent. They are held in suspense. They vest only if and when the child is born alive. After that the child is a full legal person like any other.