JURISPRUDENCE (CODE :201 PERSONALITY

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1 JURISPRUDENCE (CODE :201 PERSONALITY PERSONALITY Status of Dead Person Legal Status of Lower Animals Legal Status of Unborn Person Legal Persons CORPORATE PERSONALITY Corporation: Sole and Aggregate Theories of Legal (Corporate) Personality A. Fiction Theory Savigny vis Salmond B. Concession Theory C. Bracket Theory (Symbolist Theory) R. Ihering D. Hohfeld's Theory E. Realist Theory F. Purpose Theory G. Kelson's Theory Conclusions Liabilities of Corporations The term person or personality has been used in different sense for different purposes. In moral sense, the term has been used to mean the rational substratum or quality of human being. In anthropological and biological sense, the term person has been used to mean as one of the species. In law the word person is given a wide meaning. Salmond says that so far as legal theory is concerned, a person is a being whom the law regards as capable of bearing rights and duties. Any being that is

2 so capable is a person whether a human being or not and no being that is not so capable is not a person, even though is a human being. Thus law recognises not only the human beings but also the associations as person. The term personality should be distinguished from humanity. Humanity means only human beings but personality includes inanimate objects also. Personality is wider than humanity. Sometimes personality and humanity coincide and sometimes not. There are human beings who are not persons in the legal sense such as outlaws and slaves (in early times) and also idiots, minors and lunatics. In the same way there are legal persons who are not human beings, such as an idol or a corporation. Legal persons means an entity which is capable of suing or being sued. In the same way there are legal persons who are not human beings, such as an idol or a corporation. Broadly speaking the word Person can be divided into two types; 1. Natural Person 2. Legal Person Natural Person: Natural Persons are those which are born as humans and it is therefore that the role of legal governance formulated certain code of conduct to safeguard their rights and for the welfare as well as for the development of the society. Legal Person: Legal Person is created by Law only. Without the knowledge of law, no legal personality can be created. Since it was felt by the dynamic society that the natural persons by themselves can not take the responsibility of all their activities therefore it was thought necessary to confer legal personality to not only living entities rather non living ones also. Position of Slaves: In the olden times slaves were not treated as person in its true meaning. They had been given a chance to work and get food but no right to demand, as they were purely being governed by their masters. It means that the legal system.does not provide any guidelines in which the old society could recognize the rights & obligations of the slave. They were treated as movable property. But now the situation has completely changed. The position of slaves during the British period was very bad. The one important saying of Duguit is the only right which a man has to do is to do his

3 duty, i.e., only obligations for an individual without exercising his abilities, but this is not so in the present era. This clearly shows that the slaves were merely the obeying and not the commanding personality. But after Independence, our constitution makers have clearly prohibited untouchability, slavery as well as any other form of forced labour derogatory to the personality and well being of an individual. This is the only way through which the real objective of equality can be achieved. Status of Dead Person Dead person in general have no rights because they have no interests. Their legal personality is extinguished by death. It is said that the legal personality is created from birth & ends with death but sometimes desire of a dead person is protected by law. Basically the dead person gets three types of rights: 1. Relating to his body (burial) 2. Relating to reputation 3. Related to his estate The legal system recognises decent burial of dead person. As far as reputation is concerned, the legal system protects the reputation of the dead person to some extent. This is mainly true in, cases of defamation-it is said that even a dead person has a right to safeguard his reputation. Any defamatory statement which affects the reputation of the family of dead person or the dead person himself is protected by the legal system under the civil as well as criminal liability. By way of testamentary succession, a man can after his death, may continue to regulate and determine the disposition and enjoyment of his property which he owed while living. Legal Status of Lower Animals In the present day context, the animals are deemed incapable of possessing legal rights & duties. They are merely things, often the objects of legal rights and duties but they are never subjects of them. For example:-

4 A beast has no legal personality. Anything done to the animals may be a wrong to its owner or to the society but it is no wrong to the beast. But the animals have two rights to be protected. 1. Cruelty to animals is made a criminal offence. 2. A trust for benefit for a particular class of animals as opposed to one for individual animal is valid and enforceable as a public and charitable one. Personality of animals. Legal Status of Unborn Person Generally an unborn person has no legal standing in the eyes of law. However it has to be distinguished from the one who is living but not yet born, i.e., a child in womb of its mother-in utero and an unborn child in the sense of future generations. A child in the uterus is regarded as a person in law in accordance with the maxim Nascitures Pro Ham Nato Habetur i.e. One who is to be born is deemed to have been born. The rights of an unborn person, whether personal or proprietary, are all contingent on his birth as a living human being. Right in the inherent property can be given to such a child if the child is born alive. A posthumous child may inherit, but if he dies in the womb, or still born, his inheritance fails to take effect and no one can claim through him. But if the child is born alive even for seconds, his heirs may claim his share through inheritance. Legal Persons Legal persons, being the arbitrary creations of the law, may be of as many kind as the law pleases. The important ones are:- 1) Corporations, Companies, etc. 2) Institutions e.g., a church, a hospital, a university, a library, etc. 3) Registered trade unions, friendly societies, etc. 4) Charitable fund, trust estate (e.g. property of a dead man). 5) The State.

5 The unincorporated associations e.g. a club, are not a legal person. The rights and duties of a club are nothing more that the rights and duties of its members. A partnership or firm is not a legal person, but yet resembles one in certain ways. It can sue and be sued in its own name, and its property is separate from the property of its members. But the rights of partnership are in fact the rights of the partners, as are its liabilities; for the partners, are in general fully liable personally for the debts of the firm. In contrast, a company or a corporation, is in law a distinct person from its members; the members are not liable personally for the debts of the company. The corporation is not a mere aggregate of shareholders (Salolllon v. Salomon & Co., 1897 A.C.) CORPORATE PERSONALITY Corporation: Sole and Aggregate Corporation are persons incorporated or politique created by the policy of man. Corporation are of two types, viz. either sole or aggregate of many. A corporation aggregate is an incorporated group of co-existing persons, and a corporation sole is an incorporated series of successive persons. The former is that which has several members at a time, while the latter is that which has only one member at a time. Corporations aggregate are by far the more numerous and important. Examples are a registered company consisting of all the shareholders, and a municipal corporation, consisting of the inhabitants of the borough. Corporations sole are found only when the successive holders of some public office are incorporated so as to constitute a single, permanent, and legal person. The sovereign or king for example, is said to be a corporation of this kind at common law, while the post master-general, the solicitor to the Treasury, the Secretary of State, the Minister, have been endowed by statute with the same nature. In England, the chief manifestation of Corporate sole is also seen in the proclamation that is made on the death of reigning monarch. The proclamation says The king is dead, Long Live the King. It thus refers to with, to the individual who has died and the Corporation Sole that survives.

6 The purposes of the corporation sole are analogous to those of the corporation aggregate. The object of this device is to avoid the difficulties which are involved in the transmission from each officer to his successor of the property, liabilities, and contracts held, incurred or made by him in his official capacity. Such property, liabilities and contracts are imputed by the law to the permanent corporations which never dies or retires from office, as compared to individual holders of the office for the time being. Theories of Legal (Corporate) Personality When the law grants legal personality to a group, what is the nature of the entity which is thus recognised? Most of the theories of legal personality suffer from the common defect that they have attempted to answer this question. It is impossible to discover a common essence which unifies all the entities on which legal personality is conferred. However, the study of theories of legal personality is desirable, because of the two reasons, firstly philosophical views as to the nature of groups (or corporations) have been put forward as justification for working rules of flaw. Thus, the fiction theory was used by some to restrict the power of corporations, and the realist theory for widening their powers. A second reason for the study of theories that have been developed to answer the question posed is that many of the purely legal problems arising in connection with groups and associations cannot be fully understood without some acquaintance with the nature of the entities which have enjoyed legal personality. It is important to note that all theories of legal personality have practical consequences for life in society. However, with a little skill, one can reach almost any practical result from any particular theory. Both the fiction and the realist theories have been uphold for the same purpose and each for opposed ends. Duff suggests that Saloman v. Salomon & Co. case can be reconciled with any theory, but is authority for none. A. Fiction Theory Savigny vis Salmond Its principal supporters are Savigny and Salmond. As per this theory, Juritsic persons are also treated as if they are persons i.e. human beings. In other words, the

7 theory presupposes that only human beings are properly called person of its own. The Corporation not being a real person, it has no will, no mind, no ability to act. It can have only so much as the law imputes to it by a fiction as if it were a real person. Salmond said that a group has 'reality' or existence, but it has no real personality in the philosophical sense. Savigny said that only a man is capable of rights and the original concept of personality must coincide with the idea of man. However, this has led to a great diversity among the different supporters of the fiction theory as to its precise formulation and the practical results that should be drawn from it. One deduction drawn from the fictional nature of a corporation was that, as a corporation has only a fictional will imputed by the law, it could only will lawful things. By definition, therefore it could not make itself liable for certain kinds of legal wrongs; certainly it could not commit a crime involving any mental element (Most rules of law are expressed with human beings in mind and they contain words like wilfully, intentionally, doing, acting, fraudulently, etc.). Thus some regarded the doctrine of ultravires as a deduction from the fiction theory, because a corporation cannot go outside its Memorandum of Association (Constitution or Charter of the Corporation). Many of the practical effects of this theory which were at one time accepted have been avoided by various devices. M. Wolff highlighted some of the defects of this theory. It has been said to (a) being incompatible with the conception of subjective right; (b) leading to dangerous political results e.g. confiscation of the property of these personae factae (Le. persons of fiction); (c) being opposed to the doctrine of free association. B. Concession Theory This is allied to the fiction theory and, in fact, supporters of the one tend also to support the other. Its main feature is that it regards the dignity of being a juristic person as having to be conceded by the State i.e., the law. The identification of 'law' with State is necessary for this theory, but not for the fiction theory. A logical consequence of this theory would be that a company incorporated in America would not be recognised as a legal person unless it is specifically granted concession by Indian law.

8 It is a product of the era of power of the national State, which superseded the Holy Roman Empire and in which the supremacy of the State was emphasised. It follows, therefore, that the concession theory has been used for political purposes to strengthen the State and to suppress autonomous bodies within it. No such body (i.e., corporation) has any claim to recognition as a 'person '. It is a matter of discretion for the State. So far as this theory maintains that the law is the only source from which legal personality may flow, it states a truism. Whatever we may think the law should do, few would maintain the legal personality can be secured otherwise than by compliance with the conditions laid down by the legal order. The right to associate should be distinguished from the question of the grant of legal personality to such association as they exist. The law may prohibit all associations for any purposes. The law may give wide liberty to association for lawful ends, but refuse legal personality. The law may grant liberty of association and grant legal personality to some groups and not to others. Legal personality may be regarded as a matter of fact to be achieved by a certain degree of inner unity and organization. Even in this sense it is granted by the law, since the law lays down the conditions which create legal personality. But, if we regard this theory as laying down the sociological truth that all group life (apart from the mere grant of legal personality) is created by the State, then it is clearly both mischievous and erroneous. C. Bracket Theory (Symbolist Theory) R. Ihering This theory, put forward by R. Ihering, rests on the proposition that only human beings can have interests and rights (and thus the word person is confined to them), and that a corporation is only a legal device of formula which will enable very complex jural relations to be understood more easily. Juristic person is but a symbol to help in effectuating the purpose of the group, it amounts to putting a bracket round the members in order to treat them as a unit. A, B and C from a company and as it is inconvenient to refer always to all of them, a bracket is placed around them to which a name is given but, in order to understand the real position or real state of affairs we must remove the bracket.

9 This theory is criticised as a limited company is not just the same thing as its member and statements about the former are not just abbreviations for statements about the latter. To say that Smith & Co. Ltd. owes me 100 pounds is not an abbreviated way of saying that every member of the company owes me a debt. A court can pierce the veil (i.e., mask) of a corporation only under certain conditions. Had this theory been accepted, there would have been no need of generalising the conditions under which a court may lift the veil of corporation. The theory analyses a corporation out of existence. It is true that most groups exist to further the interests of individual men, but while we may regard legal personality as merely a device of the law, it is to deny the law itself when we say that the legal relations which are fixed and certain are those which are discovered by removing the brackets of corporation and analysing the relations of all the human beings involved. New and separate entities are recognised as units in the legal system by the system itself and such recognition makes possible a clear distinction between the property, rights and duties of the legal person, on the one hand, and the individual human beings which may be involved in the make-up of that legal person, on the other hand. Further, one can hardly make a contract with a bracket (unless that bracket has been recognised by the legal system as a legal person). It is socially and economically false, as well as legally untrue, to say that only individual man can be the bearers of legal rights. The deductions drawn from this theory have been rejected repeatedly by courts. D. Hohfeld's Theory Hohfeld drew a distinction between human beings and juristic persons. The latter, he said, are the creation of arbitrary rules of procedure. Only human beings have claims, duties, powers and liabilities. The 'corporate person; is merely a procedural form, which is used to work out in a convenient way a mass of jural relations of a large number of individuals, and to postpone the detailed working out of these relations among the individuals inter se for a later and more appropriate occasion. The theory closely resembles the bracket theory.

10 E. Realist Theory According to this theory, a corporation is like a living organism, like a natural human being, which also possesses natural rights. A corporation is not the creation of a State, or fiction. The modem realist theory builds on an analysis of human personality and regards group personality as in essence possessing the same characteristics. Gierke speaks of the group as having a real will, and real power of action. A corporation is real but mysterious entity with a special type of existence. If the power of the reason to organize experience and to direct action is emphasised as the sole essential mark of personality. we may plausibly argue that a group is a person". The same reason, which directs our individual lives, may be seen in the life of the group working in the service of those ends which the group desires. In the human personality, there is a feeling of individuality, of self-consciousness, an experience centre which organizes experience. Attempts have been made to discover a collective consciousness or experience centre for the group; but they have not been successful (though one does find in the group a sense of the warmth and intimacy which belong to self-consciousness). The theory fails to prove that the innerunity of the group exists otherwise than in the minds of the members who compose it. Also, it is difficult to prove that there is a psychological continuity (of experiences) in the group mind similar to that of the individual. The realist theory may be more easily applied to certain groups than to others. There may be very real analogies to human personality in the life of a nation, a group or a university, but a one-man company or a foundation seems far removed. F. Purpose Theory The theory originally perpounded by Britz and developed by Baker, is based on the assumption that person is applicable only to human beings. The so called juristic persons are no person at all. Since juristic persons are treated as distinct from their human substratum, if any, and since jural relations commonly vests in human beings, they should be regarded simply as subjectless properties designed for certain purposes. The theory was designed mainly to explain the foundation of German law and also explain the vacant inheritance of Roman law.

11 G. Kelson's Theory Kelson makes an analytical and formal approach to the concept of personality. He rejected, for purposes oflaw, any contrast between human beings as natural persons and Juristic Persons. He also rejected the definition of person as an entity which has claims and duties. According to him the totality of claims and duties is the person in law; there is no entity distinct from them. Turning to corporations, he pointed out that it is the conduct of human beings that is the subject matter of claims and duties. Conclusions No single theory takes account of all aspects of the problem, and criticism becomes easy. There is no essence underlying the various uses of persons. Its application to things other than human beings is purely a matter of legal convenience. The theories are philosophical, political or analytical, but are not so much concerned with finding solutions to practical problems as with trying to explain the meaning of the word person. Courts, faced with problems of solving a case before it, have proceeded according to policy, not logic. Thus, courts haven't adopted any particular theory of corporate personality. The way in which the idea of 'person' has been extended to corporation is no longer suited to modem commerce. Here, it is not flexible enough. For instance, the separate person of a corporation fails to cope with the problems of parent and subsidiary companies. The courts have evolved ways of dealing with the group activities without resorting to the device of persons. Thus, it seems that the legal concept of person is not efficient in today s society. Liabilities of Corporations From the above discussion, it is amply clear that the corporation has no physical existence. Therefore, its interests are only those which are attributed to it. So, the acts of the corporation are those of its shareholders. The representatives of the corporation are distinct from the members of the corporation.

12 OWNERSHIP OWNERSHIP Meaning and element Incidents Definitions of Ownership (a) Indefinite User Unrestricted disposition Unlimited duration Holland's definition: Salmond s definition: Other definitions: Kinds of Ownership Vested and Contingent Ownership Sole and Co-ownership Corporeal and Incorporeal Ownership Legal and Equitable Ownership Modes of Acquiring Ownership-Ancient and Modern Law Ancient Hindu modes of acquisition of ownership Ancient Western Law Modern Law POINTS TO REMEMBER The institution of property has been of tremendous significance in human affairs. The two important rights over or in relation to property are the rights of ownership and that of possession. These two concepts have certain similarities yet in their legal connotation and incidents they differ vitally. In primitive societies the only concept known to human mind was that of possession. It was much later that the concept of ownership was adopted. So long as men were huntsmen or herdsmen they were nomadic in character and had no settled habitation, had no sense of ownership. Gradually with the planting of trees and the

13 cultivation of land and the settlement of a local home, the notion of ownership began to grow. This synchronised with the change from a nomadic to settled life. This transition from a pastoral to an agricultural economy facilitated the development of the idea of individual right to property which is the basis of the concept of ownership in a relatively developed society. Meaning and element The literal meaning of the term 'own' is to have or hold a thing. The one who holds a thing as his own is said to be the owner and has the right of ownership over it. Thus in the non-legal sense ownership may be defined as the right of exclusive control over and disposal of a thing at will. In the legal sense the term ownership carries the connotation of right over a thing to the exclusion of all other persons. This implies non-interference by others in the exercise of this right and must be distinguished from mere holding of a thing in one's possession. Ownership implies two elements, one is formal element, namely, will, power, capacity, faculty, etc. Another is the material element i.e., the thing owned. For example if A has Rs. 100-it (Rs.100) constitutes the material element of his ownership, while his power under the law to spend it, to gift it or to will it is the formal element of his ownership. Incidents Normally ownership implies, (a) the right to possess; (b) the right to use; (c) the right to manage; (d) the right to the capital; (e) the right to the income. The owner of a thing has the right to possess it, to the exclusion of all others i.e., the owner has exclusive physical control of a thing or such control as the nature of the thing admits. Generally speaking, one who owns also possess a thing but this is not necessarily and always so. Thus to cite only a few examples, the owner may have been wrongfully deprived of it or may have voluntarily divested himself of it. If A's watch is stolen by B, the latter has possession but the former remains the owner with an immediate right to possess. In case of lease and mortgage, the owner (i.e., the

14 lessor and the mortgagor) owns the property without possessing it, the possession lies, with the lessee and the mortgagee. The owner has the right to use the subject-matter of ownership according to his own discretion. Here use means personal use and enjoyment of the thing by the owner. This right of enjoyment or use is not absolute; it can be and is in fact, limited by law. This does not mean that an owner cannot use the thing in a way he likes, but he cannot thereby disturb the rights of others. Suppose A owns a transistor, he can tune it at any time for listening to music, for news or for commentary, but in doing so he is to take care that he does not disturb the right of others. Thus he cannot tune it at a high pitch and at an odd time so as to disturb the sleep of others. The owner has the right to manage i.e., he has the right to decide how and by whom the thing owned shall be used. The owner has the power of contracting, the power to admit others to one's land, to permit others to use one's things, to define the limits of such permission, to create a right of easement over his land in favour of a third person, etc. etc. One who owns a thing has also the right to alienate the same or to waste, destroy or to consume the whole or part of it. The right to consume and destroy are straightforward liberties. The right to alienate i.e., the right to transfer his rights over object to another involves the existence of a power. Almost all legal systems provide for alienation and prescribed the mode in which it can be done. Thus in India and in most of other legal systems alienation takes place by way of sale, mortgage, lease, exchange, will, gift, etc. In India the Transfer of Property Act prescribes the rules or procedure for alienation. The right of alienation is the exclusive right of the owner. A non-owner may have the possession of a thing but he cannot transfer the right of ownership of such thing to another e.g., in case of a lease, a lessee may have the possession of the leased property but he cannot transfer it because that is the exclusive right of the lessor who only can do so. The owner of a thing has not only the right to possess the thing but also the right to the fruits and income of the thing within the limits, if any, laid down by the law. Suppose A has a land, he has not only the right to possess that land but he can enjoy benefits resulting therefrom e.g., produce, fruits, crops, etc. etc. Sometimes the

15 use or the occupation of a thing may be regarded as the simplest way of deriving an income from it and of enjoying it. Definitions of Ownership Different writers have defined ownership in different ways. Austin defined ownership as a right indefinite in point of user, unrestricted in point of disposition and unlimited in point of duration. Austin s definition thus implies three attributes viz., a) indefinite user; b) unrestricted disposition; and c) unlimited duration. (a) Indefinite User By right of indefinite user Austin means that the owner of the thing is free to use or misuse the thing in a way he likes. The owner of a land may use it for walking, for building a house or for gardening and so forth. However, Austin was cautious enough to use the term indefinite. He did not use the term absolute or unlimited. The owner thus is not absolutely free to use the thing owned in any way he likes. His use of the thing is conditioned by requirements or restrictions imposed by the law. The owner must not use the thing owned as to injure the rights of others. This principle is the foundation of the well known maxim Sie utere tero ut alierum non laedas : the meaning of this maxim being that use your own property as not to injure your neighbour's right. Again, the use of property may be restricted voluntarily e.g., when a person gives his land or a house to a tenant. The use may also be restricted by law in the interest of the community e.g., Town Planning Act, Slum Clearance Act, 1955 etc. etc. Unrestricted disposition What Austin implies by unrestricted disposition is that the power of disposition of the owner is unhampered by law meaning thereby that he is absolutely free to dispose it to anyone.

16 This is incorrect. In case of lease of a thousand years, servitudes and restrictive covenants, plenary control of a property is not possible. Moreover, in the law of some of the western countries there is a rule of re legitima portis which means that a person cannot dispose of his entire property. He has to keep a certain portion of the property for the members of his family. Under Mohammedan Law a similar rule prevails, namely, a person cannot dispose of by will etc. more than 1/3 of his property to a stranger. In England, as well as in India a transfer of property made with the intention of defeating and delaying creditors would be set aside. Wherever the law of pre-emption prevails the right of disposition is restricted. So much so the law can impose any restriction on the power of disposition. As under Hindu law a Hindu governed by the Mitakshara law cannot alienate ancestral immovable property without the consent of other coparceners except for legal necessity. Unlimited duration What Austin implies by this is that ownership of a person cannot be cut short and the owner can continue to be the owner as long as he likes. This is also incorrect since almost under every legal system the state possesses the power to take over the property of any person in public interest. The abolition of Zamindari System in India, the abolition of Privy Purses, Nationalisation of Banks etc. are some examples of the fact that ownership can be cut short by the state for public purpose and its duration is not unlimited. Austin's. definition of ownership might have been more, if not wholly, correct when the doctrine of laissez-faire prevailed. It is absolutely unacceptable under the modern law. Holland's definition: Austin's definition of ownership has been followed by Holland. He defines ownership as plenary control over an object. According to him an owner has three rights on the subject owned - 1) Possession 2) Enjoyment 3) Disposition

17 Plenary control over an object implies complete control unrestricted by any law or fact. Thus, the criticism levelled against Austin's definition would apply to that given by Holland in so far as the implication of the term plenary control goes. Salmond s definition: Salmond says 'Ownership in most comprehensive significance denotes the relation between a person and any right that is vested in him'. That which a man owns, according to him, is in all cases a right. Ownership in this wider sense, extends to all classes of rights, whether proprietary or personal, in rem or in personam, in re-propria or in re-aliena. He adds, that it applies not only to rights in the strict sense but also to liberties, powers and immunities. Thus, according to Salmond ownership vests in the owner a complex of rights which he exercises to the exclusion of all others. For Salmond what constitutes ownership-a bundle of rights which inhere in an individual. Salmond's definition thus points out two attributes of ownership - (a) ownership is a relation between a person and rights that is vested in him; (b) ownership is incorporeal (immaterial, having no material body or form). For Salmond a man may own a copyright, or a right of way in the same way as he owns a piece of land because in all these cases he owns only a right and not a thing. Salmond's definition does not indicate the content of ownership. It does not indicate the rights, powers etc. which are implied in the concept of ownership. Again, it is not wholly correct to say that ownership is a relation between a person and any rights that are vested in him as the most popular and common idea of ownership is a relationship between a person and a thing. Duguit says the thing is what is owned and not the right which does not really exist. There is an element of truth in Salmond's definition. Salmond has rightly pointed out that the subject-matters of ownership can be not only material things e.g., land, watch etc. but also incorporeal and immaterial objects e.g., copyrights or patents. In either case there is a bundle of rights, claims and power etc. which go to constitute ownership.

18 Other definitions: Hohfield expresses a similar view (like that of Salmond)when he says ownership is not a right but a bundle of rights, privileges, powers etc. However, the distinction made by Hohfield is one without a difference. Since it is like calling a bucket of water as not a bucket of water but a bucket of millions of drops of water. Hohfield adds that this collection of privileges, rights, powers etc. are frequently found to reside either for a limited period or perpetually in a person other than the owner. Fredrick Pollock improves upon the other definitions when he defines ownership as the entirety of the power of use and disposal allowed by law. Prof. Keeton expresses a similar view when he observes that ownership is the ultimate right to the enjoyment of a thing, as fully as the state permits when all prior rights in the thing vested in persons other than the one entitled to the ultimate use are exhausted. These two definitions give relatively a more proper connotation of the term ownership. They bring out the most important fact that ownership is always subject to limitations imposed by the law; it is the ultimate right to the enjoyment of a thing subject to the condition or restriction imposed by the law as to the use of the thing owned. Keeton has added another obvious dimension to the definition of ownership when he speaks of ultimate use after all rights vested in persons other than the one entitled to the ultimate use are exhausted". Thus, the owner may mortgage his house, give it to a tenant etc. etc. yet he is the person who is entitled to the ultimate use of the thing after the rights of the mortgagee or tenant are exhausted. We may in conclusion say thata) Ownership is a right which comprises of powers, claims, privileges, etc. b) Ownership is in respect of a thing which may be corporeal or c) The rights relating to or in connection with ownership are subject to state regulation i.e., can be limited or restricted by law. d) Owner is he who is entitled to the residue of rights with respect to an object left after the limitation resulting from the voluntary acts of the owner (mortgage, lease or hire) or those imposed by law are exhausted, e) Ownership does not imply or indicate absolute or unlimited rights either regarding use, disposal or duration.

19 Kinds of Ownership Ownership may be of various kinds. Broadly, it may be classified under the following heads- (1) Vested and Contingent ownership. (2) Sole and Co-ownership. (3) Corporeal and Incorporeal ownership. (4) Legal and Equitable ownership. (5) Trust and Beneficial ownership. (6) Absolute & Limited ownership. Vested and Contingent Ownership Ownership is either vested or contingent. It is vested when all the events essential to vest property in the owner have happened and the owner's title is already perfect. Thus if A sells a house to B for a price settled, the other formalities prescribed by law e.g., registration etc. are complied with, B becomes a vested owner of the house. A vested ownership does not depend upon the fulfillment of any condition but creates an immediate right though its enjoyment may be postponed to a future date, e.g., suppose there is a transfer of property to A for life then to B, here B's interest is vested one because B need not fulfill any condition precedent and his title is perfect, he is entitled to take possession the moment A dies. Thus, the aforesaid transfer only postpones his right to his enjoyment to a future date. Again, suppose A makes a transfer in favour of B Rs. 10,000 to be paid to him upon his attaining the age of 18. Here B's interest is vested, he would be getting the money as soon as he attains the age of 18. Section 19 of the Transfer of Property Act, 1882 lays down the rules regarding vested interests. According to this section where on a transfer of property an interest therein is created in favour of a person without specifying the time when it is to take effect, or in terms specifying that it is to take effect forthwith or on the happening of an event which must happen such interest is vested, unless a contrary intention appears from the terms of the transfer.

20 Contingent ownership is conditional. In this case the transfer of interest in property is subjected to certain condition or conditions. The vesting of the right in such cases depends upon the happening of such event or fulfillment of such condition. Thus, if property is transferred to A for life then to B, if B marries C, B's interest is such that it cannot take place as soon as A dies, because there is a condition which B is to fulfill viz., that he must marry C. Until B fulfils this condition his interest is contingent depending upon the fulfillment of the condition. Again, an estate is bequeathed to A if he shall pay Rs. 500 to B-here As interest in the bequest is contingent until he has paid Rs. 500 to B. The condition on which ownership depends may be either a condition precedent or condition subsequent. A condition precedent is one by the fulfillment of which a title is completed, a condition subsequent is one on the fulfillment of which a title already completed is extinguished. In the former case one acquires absolutely what he has already acquired conditionally. In the latter case one looses absolutely what he has already lost conditionally. Section 21 of Transfer of Property Act provides rules of contingent interest. According to this Section, where on a transfer of property, an interest therein is created in favour of a person to take effect only on the happening of a specified uncertain event or if a specified uncertain event shall not happen, such person thereby acquires a contingent interest in the property. Sole and Co-ownership When the right of ownership is exclusively vested in one person it is called sole ownership. When property is jointly held by several persons at the same time it is called co-ownership. The property held by the partners in a firm is an example of coownership. According to English Law co-ownership is further sub-divided into joint tenancy and tenancy-in-common. It may be in the form of joint tenant when interest in property is considered as single unit. These type of tenancy arose wherever land was conveyed in favour of more than one person by a single instrument without words of severance, i.e., without indicating or apportioning the extent of interest of each person in the property or indicates the portion to which one of them severally would be entitled. Since in joint tenancy interest is considered as single unit, a joint tenant cannot maintain an action for trespass against the other joint tenant but he can

21 maintain an action of trespass, against a third person. The most important characteristic of joint tenancy is the right of survivorship. Thus, if A and B are joint tenants and A dies first his interest in property pass to B by survivorship. The typical example of joint tenancy in India is that in case of a mitakshara coparcenary where the interest in property is held jointly by coparceners and they have the right of survivorship. After the death of one or more of the coparceners the property goes to surviving coparceners, by virtue of survivorship. Nowhere else is the principle of joint tenancy applied in Hindu Law. Under English law a joint tenancy may be severed and converted into a tenancy-in-common by one of the joint tenants disposing of or contracting to sell his interest or by mutual agreement or by a course of dealing of all the joint tenants sufficient to indicate a severence. A tenancy-in-common may arise by operation of equity e.g., when more than one person jointly purchase a house contributing equal amounts and take conveyance in joint name, they become tenants-in-common in proportion to their contribution to the share of purchase money. A tenant-in-common is entitled to joint possession and if excluded from such possession, may sue for a declaration of his right. If there is no exclusion or denial of his right as a tenant-incommon but one of the tenants gives up joint possession he has no right to sue for his share of the joint profit. There is no right of survivorship in case of tenancy-incommon so on the death of a tenant-in-common his share goes to his legal representative. Thus, tenancy-in-common implies only unity of possession but not of title whereas joint tenancy implied both unity of possession and title. Corporeal and Incorporeal Ownership Corporeal ownership is the ownership of material or tangible things or objects. It is the ownership of those things which we can see and touch. That is to say corporeal ownership relates to corporeal property, immovable, or movable. Immovable property includes land and buildings and things attached to the land. Whatever is planted to the land goes to the land. Thus, if A builds a house on his land with B s materials, A becomes the legal owner also of the building. It has been laid down- Quia omne quod solo inacdifioatur solo cedit i.e., by whatever means it be,

22 what is affixed to the land becomes eroded to it. Movable property means and includes things not attached to the land, and personal effects. When what is attached to the land becomes a movable property when separated from the land. Incorporeal ownership is the ownership of intangible object-object which cannot be perceived and felt by touch i.e., the ownership of a right, for example, a debt, a patent, goodwill, trademark etc. etc. Incorporeal ownership, according to Salmond, is an ownership in the sense of the term i.e., ownership of all kinds of rights. Legal and Equitable Ownership This classification of ownership is recognized in England. This difference between the two of the ownerships has its origin in the rules of common law and equity. In England, the original law was the common law-the law based on the common custom of the country which was developed and administered by the common law courts. But in the course of time the common law became a definite body of rules which was not capable of growth in various directions and even caused hardship and injustice in particular cases owing to the inflexibility of its procedure and modes of redress. Rules of Equity were developed by the chancellors who sat in the Chancery as the Keeper of the King s Conscience, to give relief in cases of hardship by the application of the principles of morality or conscience. Thus, in England before the passage of Judicature Acts of 1873 and 1875, two types of courts with two distinct jurisdictions were functioning. The two courts were known as the Court of Common Law and the Court of Equity. The right recognised and protected by the common law courts were known as the common law right whereas the right recognized and protected by the Equity Courts were known as the equity rights. Judicature Acts of 1873 and 1875, amalgamated two courts but still today equitable ownership is recognised in England as it gets recognition by the Equity Bench of Common Law Courts. Originally legal ownership meant that which had its origin in the rules of the common law, while equitable ownership meant that which resulted from the rules of equity divergent from the common law. The courts of common law refused to recognize equitable ownership and denied that the equitable owner was an owner at all. On the other hand, the Court of Chancery adopted a very different attitude. Here the legal owner was recognised no less than the equitable but the former

23 was treated as a trustee for the latter. The Court of Chancery vindicated the principles of equity, not by denying the existence of the legal owner but by taking from him the beneficial enjoyment of his property. Thus, in England legal owner is one whom the common law would designate as the owner whereas the equitable owner is the person whose ownership is protected by the Chancery Bench. So when property is given by A to B for the benefit of C - B becomes the legal owner and C -the equitable owner. The Bench of Equity protects C's interest, even though legal ownership remains in B. Both law and equity consider D as the legal owner. The Equity Bench, however, prevents the legal owner from dealing with the property in derogation of the beneficiary s interest. In India, the distinction between legal and equitable ownership is not recognized. It was observed in Tagore v. Tagore,1 that in India, under the Indian Trust Act a beneficiary s interest is not an interest in the trust property but an interest by way of a right against the trustee who are regarded as the legal owners of trust property. The trustees are, subject to the law relating to trust and trustees, bound to carry out the trust according to the dictates of the maker of the trust. If the trustees fail to do so, the beneficiaries can have their rights enforced against the trustees as a matter of right. Modes of Acquiring Ownership-Ancient and Modern Law The acquisition of ownership may take place either in respect of a thing which had no previous owner or in respect of a thing which had a previous owner. If the thing had not a previous owner, then the ownership of one person is transferred to another. If it had a previous owner, then a new ownership is created. Thus, a bird in the air would belong to one who shoots it and takes possession of it. However, in case of a house owned by A, the ownership can be transferred to B in accordance with the provisions of the law. Ancient Hindu modes of acquisition of ownership Ancient Hindu jurists have said much about the means of acquiring ownership. Manu declared that, there are seven virtuous means of acquisition of wealth, viz., inheritance, gain, purchase, conquest, application (of wealth), employment of work of

24 and acceptance of gifts from proper persons. Gautma gives almost the same seven ways of acquiring ownership but he put some modifications to the list given by Manu. For him ownership arises from succession, purchase, partition, occupation of inappropriate property and finding of hidden treasures or the like, to which may be added acceptance of gifts in the case of Brahmans, conquest in the case of Vaisyas and wages of labour in the case of Sudras. Narada enters into a little more details and says that there are twelve different modes of acquiring wealth of which three are general (i.e., open to all castes) and the rest are peculiar to several castes. These specific modes of acquiring wealth are proper for several castes and any contravention is reprehensible unless forced by' pressing necessity. Ancient Western Law Following were the modes of acquisition of ownership under ancient Western law:- (a) Occupation.- Under Roman Law the term occupacio connoted that for the acquisition of ownership of or hunted animals, it was immaterial to see whether a man took wild beast or birds upon his own ground or that of another. But English law did not ascribe ownership to a trespasser who killed game on another persons land. Under Hindu law the term occupacio was known as parigraha which means appropriation and is explained in the Viramitrodya as signifying the appropriation of previously unappointed property such as straw, water, logs of wood, etc. from a forest which is open to the public as not being under the ownership of any particular individual. (b) Finding of Treasure trover.- Under Roman law, if any treasure was found by the owner of the land where it lay concealed, he could keep the whole of it, if it is found by another person then the finder and the owner of the land take it with equal distribution. Under English law, neither the finder, nor the owner of the land had any interest in it but it belonged entirely to the Crown. Non-disclosure of it was regarded as an offence. The Hindu Law relating to treasure trover has been described by Yajnavalkya. He said that if the King discovers the treasure trover, then he will take half and distribute the other half among Brahmans, if a learned Brahman finds it, then

25 he may keep the whole himself in other cases the King will give one-sixth to the finder and take the rest himself but if the finder does not bring the fact to the notice of the King then he will, on coming to know of it extract the whole and also punish the finder. To this Mitakshara adds, on the authority of Manu, that even in such a case if the real owner comes forward and establishes his title, the King will restore the treasure to him after retaining one-sixth or one-twelfth for himself, or according to Nilakantha one-fourth for himself and one-twelfth for the finder. (c) Conquest by War.- According to Roman and English law the property of the enemy was regarded as res nullius so the victorious party could deal with it in any way they liked. Even the property of private individuals in the conquered country could be freely disposed of by the conquering state and no 'private rights can be set up against it. Hindu Law did not recognise this rule. Under Hindu Law conquest is an. independent. source of acquisition of ownership. According to it conquest did not take away all private rights the only effect was to invest the victorious Kings with all the rights which defeated King had-so the former might claim full ownership of the property of the latter but his right so far property of the subjects were concerned did not extend to anything more than to collect revenue from them. (d) Accession.-Accession or application of already existing property was a mode of acquiring ownership, which was known both under Roman and English law. Thus, if a field produces crops or a domestic animal bears offspring, the produce in each case belongs to the owner of the field or the animal unless there has been some previous agreement modifying the general rule. This rule was known as Proyago under Hindu law. Thus, according to Hindu law, if a river which flows between two villages and forms the boundary between them encroaches upon one bank and attaches newly formed land to another then the owner of the bank on which the formation takes place becomes entitled to it as an accretion to his property. Modern Law Under modern law there are the following modes of acquiring ownership which may be broadly classed under two heads, viz.,-