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«TRANSCENDENTAL NONSENSE AND THE FUNCTIONAL APPROACH I. THE HEAVEN OF LEGAL CONCEPTS Some fifty years ago a great German jurist had a curious dream. ...»

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REVIEW

COLUMBIA

LAW

VOL. XXXV JUNE, 1935 NO. 6

TRANSCENDENTAL NONSENSE AND THE

FUNCTIONAL APPROACH

I. THE HEAVEN OF LEGAL CONCEPTS

Some fifty years ago a great German jurist had a curious dream.

He dreamed that he died and was taken to a special heaven reserved for

the theoreticians of the law. In this heaven one met, face to face, the many concepts of jurisprudence in their absolute purity, freed from all entangling alliances with human life. Here were the disembodied spirits of good faith and bad faith, property, possession, laches, and rights in rem. Here were all the logical instruments needed to manipulate and transform these legal concepts and thus to create and to solve the most beautiful of legal problems. Here one found a dialectichydraulic-interpretation press, which could press an indefinite number of meanings out of any text or statute, an apparatus for constructing fictions, and a hair-splitting machine that could divide a single hair into 999,999 equal parts and, when operated by the most expert jurists, could split each of these parts again into 999,999 equal parts. The boundless opportunities of this heaven of legal concepts were open to all properly qualified jurists, provided only they drank the Lethean draught which induced forgetfulness of terrestrial human affairs. But for the most accomplished jurists the Lethean draught was entirely superfluous. They had nothing to forget.1 Von Jhering's dream has been retold, in recent years, in the chapels of sociological, functional, institutional, scientific, experimental, realistic, and neo-realistic jurisprudence. The question is raised, "How much of contemporary legal thought moves in the pure ether of Von Jhering's heaven of legal concepts?" One turns to our leading legal textbooks and to the opinions of our courts for answer. May the Shade of Von Jhering be our guide.

1. Where Is a Corporation?

Let us begin our survey by observing an exceptionally able court as it deals with a typical problem in legal procedure. In the case of Tauza v. Susquehanna Coal Company,2 a corporation which had been

'VON IM IN SCIIERZ UND ERNST

JHERING, JURISTISCHEN BEGRIFFSHIMMEL,

IN DERJURISPRUDENZ th ed. 1912) 245.

(1 2220 N.Y. 259, 115 N.E. 915 (1917).

810 COLUMBIA LAW REVIEW chartered by the State of Pennsylvania was sued in New York. Summons and complaint were served upon an officer of the corporation in New York in the manner prescribed by New York law. The corporation raised the objection that it could not be sued in New York. The New York Court of Appeals disagreed with this contention and held that the corporation could be sued in that State. What is of interest for our purposes is not the particular decision of the court but the mode of reasoning by which this decision was reached.

The problem which the Court of Appeals faced was a thoroughly practical one. If a competent legislature had considered the problem of when a corporation incorporated in another State should be subject to suit, it would probably have made some factual inquiry into the practice of modern corporations in choosing their sovereigns3 and into the actual significance of the relationship between a corporation and the state of its incorporation. It might have considered the difficulties that injured plaintiffs may encounter if they have to bring suit against corporate defendants in the state of incorporation. It might have balanced, against such difficulties, the possible hardship to corporations of having to defend actions in many states, considering the legal facilities available to corporate defendants. On the basis of facts revealed by such an inquiry, and on the basis of certain political or ethical value judgments as to the propriety of putting financial burdens upon corporations, a competent legislature would have attempted to formulate some rule as to when a foreign corporation should be subject to suit.

The Court of Appeals reached its decision without avowedly considering any of these matters. It does not appear that scientific evidence on any of these issues was offered to the court. Instead of addressing itself to such economic, sociological, political, or ethical questions as a competent legislature might have faced, the court addressed itself to the question, "Where is a corporation?" Was this corporation really in Pennsylvania or in New York, or could it be in two places at once ?

Clearly the question of where a corporation is, when it incorporates in one state and has agents transacting corporate business in another state, is not a question that can be answered by empirical observation.

Nor is it a question that demands for its solution any analysis of political considerations or social ideals. It is, in fact, a question identical in metaphysical status with the question which scholastic theologians are supposed to have argued at great length, "How many angels can stand on the point of a needle?" Now it is extremely doubtful whether any of the scholastics ever actually discussed this question.4 Yet the quesSee Berle, Investors and the Revised Delaware CorporationAct (1929) 29 LAW REV. 563; RIPLEY,MAIN STREET COLUMBIA AND WALL STREET(1927).





4 Several students of scholastic philosophy inform me that they have never found any evidence of such discussion more reliable than the hearsay testimony of Rabelais.

TRANSCENDENTAL 811 NONSENSE tion has become, for us, a symbol of an age in which thought without roots in reality was an object of high esteem.

Will future historians deal more charitably with such legal questions as "Where is a corporation?" Nobody has ever seen a corporation.

What right have we to believe in corporations if we don't believe in angels? To be sure, some of us have seen corporate funds, corporate transactions, etc. (just as some of us have seen angelic deeds, angelic countenances, etc.). But this does not give us the right to hypostatize, to "thingify," the corporation, and to assume that it travels about from State to State as mortal men travel. Surely we are qualifying as inmates of Von Jhering's heaven of legal concepts when we approach a legal problem in these essentially supernatural terms.

Yet it is exactly in these terms of transcendental nonsense that the Court of Appeals approached the question of whether the Susquehanna Coal Company could be sued in New York State. "The essential thing," said Judge Cardozo, writing for a unanimous court, "is that the corporation shall have come into the State."5 Why this journey is essential, or how it is possible, we are not informed. The opinion notes that the corporation has an office in the State, with eight salesmen and eleven desks, and concludes that the corporation is really "in" New York State. From this inference it easily follows that since a person who is in New York can be sued here, and since a corporation is a person, the Susquehanna Coal Company is subject to suit in a New York court.

The same manner of reasoning can be used by the same court to show that the Dodge Bros. Motor Corporation "cannot" be sued in New York because the corporation (as distinguished from its corps of New York employees and dealers) is not "in" New York.6 Strange as this manner of argument will seem to laymen, lawyers trained by long practice in believing what is impossible,7 will accept this reasoning as relevant, material, and competent. Indeed, even the great protagonist of sociological jurisprudence, Mr. Justice Brandeis, has invoked this supernatural approach to the problem of actions against foreign corporations, without betraying any doubt as to the factual reference of the question, "Where is a corporation?" Thus, in the leading case of Bank of America v. Whitney Central National Bank,8 the 5 See 220 N. Y. at 268, 115 N. E. at 918.

'Holzer v. Dodge Bros. Motor Corp.,233 N. Y. 216, 135 N. E. 268 (1922).

"I can't believe that !" said Alice.

"Can't you?" the Queen said, in a pitying tone. "Try again: draw a long breath, and shut your eyes."

Alice laughed. "There's no use trying," she said; "one can't believe impossible things."

"I dare say you haven't had much practice,"said the Queen. "When I was your age I always did it for half an hour a day. Why, sometimes I've believed as many as six impossible things before breakfast." (Lewis Carroll, Through the Looking Glass, c. 5.) 171 (1923).

261 U.S.

812 COLUMBIA LAW REVIEW United States Supreme Court faced the question of whether a banking corporation incorporated in Louisiana could be sued in New York, where it carried on numerous financial transactions and where its president had been served, but where it did not own any desks. The Supreme Court held that although the defendant "had what would popularly be called a large New York business," the action could not be maintained, and offered, per Brandeis, J., the following justification of

this curious conclusion:9

–  –  –

Of course, it would be captious to criticize courts for delivering their opinions in the language of transcendental nonsense. Logicians sometimes talk as if the only function of language were to convey ideas. But anthropologists know better and assure us that "language is primarily a pre-rational function."'0 Certain words and phrases are useful for the purpose of releasing pent-up emotions, or putting babies to sleep, or inducing certain emotions and attitudes in a political or a judicial audience. The law is not a science but a practical activity, and myths may impress the imagination and memory where more exact discourse would leave minds cold.

Valuable as is the language of transcendental nonsense for many practical legal purposes, it is entirely useless when we come to study, describe, predict, and criticize legal phenomena. And although judges and lawyers need not be legal scientists, it is of some practical importance that they should recognize that the traditional language of argument and opinion neither explains nor justifies court decisions.

When the vivid fictions and metaphors of traditional jurisprudence are thought of as reasons for decisions, rather than poetical or mnemonic devices for formulating decisions reached on other grounds, then the author, as well as the reader, of the opinion or argument, is apt to forget the social forces which mold the law and the social ideals by which the law is to be judged. Thus it is that the most intelligent judges in America can deal with a concrete practical problem of procedural law and corporate responsibility without any appreciation of the economic, social, and ethical issues which it involves.

Id., at 173.

10SAPIR, LANGUAGE (1921) 14.

TRANSCENDENTAL 813 NONSENSE

2. When is a Corporation?

The field of corporation law offers many illuminating examples of the traditional supernatural approach to practical legal problems. In the famous Coronado case,1"the question was presented to the United States Supreme Court, whether employers whose business had been injured in the course of a strike could recover a judgment against a labor union which had "encouraged" the strike, or whether suit could be brought only against particular individuals charged with committing or inducing the injury. So far as appears from the printed record, counsel for the union defendants did not attempt to show that labor unions would be seriously handicapped by the imposition of financial responsibility for damage done in strikes, that it would be impossible for labor unions to control agents provocateurs, and that labor unions served a very important function in modern industrial society which would be seriously endangered by the type of liability in question. Instead of offering any such argument to support the claim of the labor union to legal immunity for the torts of its members, counsel for the union advanced the metaphysical argument that a labor union, being an unincorporated association, is not a person and, therefore, cannot be subject to tort liability. This is a very ancient and respectable argument in procedural law. Pope Innocent IV used it in the middle of the Thirteenth Century to prove that the treasuries of religious bodies could not be subject to tort liability.12 Unfortunately, the argument that a labor union is not a person is one of those arguments that remain true only so long as they are believed.13 When the court rejected the argument and held the union liable, the union became a person-to the extent of being suable as a legal entity-and the argument ceased to be true.

The Supreme Court argued, "A labor union can be sued because it is, in essential aspects, a person, a quasi-corporation." The realist will say, "A labor union is a person or quasi-corporation because it can be sued; to call something a person in law, is merely to state, in metaphorical language, that it can be sued."

"1United Mine Workers of America v. Coronado Coal Co., 259 U.S. 344 (1922). The British prototype of this case, Taff-Vale Ry. Co. v. Amalg. Soc. of Railway Servants, [1901] A. C. 426, reached a similar decision, professedly upon similar transcendental grounds, but this was soon upset by special legislation. See WEBB, HISTORY TRADEUNIONISM (Rev. ed. 1920) 600 ff.

OF Cf. DEWEY, "Corporate Personality" in PHILOSOPHYAND CIVILIZATION (1931), 154; and see 3'GIERKE, DAS DEUTSCHE GENOSSENSCHAFTRECHT 279-285;

HISTORY ENGLISHLAW (3d ed. 1923) 470-474.

OF cf. 3 HOLDSWORTH, a flower found on certain islands of the 13 Compare the case of Wild Modesty, South Seas, which is really white but turns red when any one looks at it (reported in Traprock's "The Cruise of the Kawa" [1921] 10).

COLUMBIA LAW REVIEW

There is a significant difference between these two ways of describing the situation. If we say that a court acts in a certain way "because a labor union is a person," we appear to justify the court's action, and to justify that action, moreover, in transcendental terms, by asserting something that sounds like a proposition but which can not be confirmed or refuted by positive evidence or by ethical argumenlt.



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