Dedicated to the writings of Saint Luke.

Saturday, October 13, 2007

Legal fiction

In common law tradition, legal fiction is defined as an assumption that something is true even though it may be untrue that is created by the law in order to do justice. The most familiar legal fiction is that a corporation is a “person.” In the earliest case involving a corporation, the corporate defendant argued it could not be sued on the debt because in common law tradition only a natural person could sue or be sued. The legal fiction was no more than a means to an end to permit the corporation to sue or be sued. The statute creating corporations provided that the shareholders were not liable for the debts of the corporation. Legal fiction is necessary, as William Blackstone observed, because “legislation is never free from the iron law of unintended consequences.”

The legal fiction concept predates the English common law. In the Book of Judges, we read that the men of Israel had made an oath that none of them shall give their daughter in marriage to Benjamin. To circumvent the oath, the men of Benjamin were invited by the men of Israel to abduct the daughters of Shiloh dancing at the feast to make intermarriage possible. The passage in Judges 21:16-23 is an example of recourse to legal fiction to change the Torah. In the Benjamin example, the remnant of Benjamin was preserved from extinction by resort to a legal fiction.

The collectors for the Temple also used legal fiction to avoid injury to the Treasury. Equitable principles could not be applied against the Temple. For instance, “no accounts may be required in charity matters of the charity officials or in Temple property matters of the treasurers.” Thus rules created as a safeguard against embezzlement of Temple property by treasurers or trustees did not create any right to require an accounting. Furthermore, “Interest (laws apply) to the layman but not to dedicated property.”

Copyrighted 2007


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