Again, why punish the innocent members, criminally? If the policy of the law demands intent or guilty knowledge before a person is punished, how can the policy of the law at the same time demand that these innocent members be punished without the requisite intent or guilty knowledge 41 Generally, society does not become alarmed at an innocent act, especially if this act is an imputed

act.

Even though we agree with those German jurists who contend that a corporation is a social organism with a will2 and a soul of

41. "But public policy certainly does not demand that a person or association be punished by the state, through criminal proceedings, on the account of a wrong committed by another. Hence, it is held that where the commission of a crime involves the intention of the offender, this intention cannot be imputed by means of a fiction; actual intention is required" Morawetz "Private Corporations" (2nd ed.) II par. 732.

42. The two apparently contradictory axioms of jurisprudence, there cannot be a right without a subject, and man alone is the subject of rights, have for a long time puzzled jurists and philosophers for reconciliation in the instance of the corporation. There is a great flood of literature on this subject on the Continent. This contradiction, or apparent contradiction, has been, in the case of the corporation, explained on two chief grounds: namely, the corporation is a real person with a will and a soul although a different kind of a person from a natural person, and the corporation is a fiction and has in fact no rights, save by fiction, that the juridical person is the technical means of defining the jural relation between members and between member and non-member. Baron, Beseler, Bluntschli, Zitelmann, and Gierke are the chief proponents of the former view, and Puchta, Savigny, Unger, and Jhering are the supporters of the latter theory. See Miragalia "Comparative Legal Philosophy" (Lisle's translation) pp. 361-381. The adherents of the former or "reality" theory have not received a very warm reception in Anglo-American legal thought. Maitland in the introduction to his translation of Gierke's "Political Theories of the Middle Ages," lends a warm sympathy to the "will" theory. We find Pollock ("Jurisprudence" 123) referring to the controversy and taking a stand with the realists as holding the sounder view, without any reasons given. Aside from some_scattered expressions of sympathy for the social organism view (L. Q. R. XXII 178 and ILL. L. REV. III 446) this view has been entirely rejected for the "fiction" theory of Coke and Holt, and well formulated by Jhering in his "Geist d. rom. R." It is believed that the invisible influence of this theory has been largely responsible for the misguided view that a corporation can be guilty of crimes, at common law, involving a specific intent. Little "Punishment of a Corporation" (ILL. L. REV. III 446), puts the punishment squarely on this ground. Most of the Anglo-American writers that discuss the subject at all are unanimously opposed to the doctrine of the corporation having a will in anything more than a fictional sense. Gray ("Nature and Source of the Law" p. 50-2), says: "Neither the idiot, the horse, the steam tug, nor the corporation has a real will: the first three no more than the latter." And (at p. 53) he says: “"Assuming that a corporation is a real thing the questions whether it can have a real will depends upon whether there is such a thing as a general will. I do not believe that there is. There may be an agreeing will but not a collective will. A will belongs to an individual. To get rid of the fiction of an attributed will by saying that a corporation has a real general will is to drive out one fiction by another."

He also observes that the controversy is unnecessary, for granted that a corporation has a real will it does not necessarily follow that the law should take cognizance of this will and recognize is at it does the will of a natural

its own quite different and distinct from the wills and souls of its members, it does not necessarily follow that it will be, or should be, punished as such, especially in view of the fact that it cannot be punished without punishing innocent persons. If a corporation has a will, then so do the great business firms organized as partnerships, joint stock companies, and business trusts. Indeed, then, why has not the club, the class, the fraternity, and the mob a will and a soul? It has not been suggested that these associations should be punished as groups. The innocent, in general, are not made to suffer for the acts of the guilty. Take care of individual responsibility and the group will take care of itself. Certainly we need not resort to a fiction to punish innocent persons. If we will pierce the corporate veil to strike down the guilty persons back of the corporate entity, when justice requires, we will also disregard this corporate veil and treat the persons back of it as human beings, instead of blindly striking ostensibly at the fiction and letting the blows take effect where they will.43

person: "A corporation may have a real will of it's own as does a new-born baby, a deer, or a chipanzee or an idiot, but the law may not recognize these wills as subject to rights and duties": p. 29.

Machen "Corporate Personality" Harv. L. Rev. XXIV 253, 265, says: "As a corporate entity is not a rational being, is not capable of understanding the law's commands, and has no real will which can be affected by threats of punishment, it follows-if demonstration be needed to a self-evident factthat a corporation is not a real person if the word person be used in its ordinary sense. In addressing commands to a corporation the law can speak only to human beings who compose it or who manage or control it. In form punishment for the violation of these commands may be inflicted on the corporation, but in so doing the law is using the corporate entity as a mere means of reaching the human beings who act for the corporation. The law is using the corporate entity as a mere sight to direct its shots toward the human beings who are behind the entity. This is the truth epigrammatically expressed in American politics by the phrase, "guilt is personal." See also Salmond op. cit. (supra, note 2) p. 289. A late article in the Journal of the American Institute of Criminal Law and Criminology Vol. 14 p. 1, shows the extent of the confusion that follows by proceeding on the premise of the existence of a real corporate will.

43. In 29 Law Times 25, we have a report of a paper read by Mr. N. Lindley before the Juridical Society on March 23, 1857, that is as sound and as opportune as when it was read: “. . A corporation is usually said to be an ideal person composed of a number of individual persons, the collective whole being, juridically speaking, distinct from its component parts. It was, however, plain that the word 'person' was here used in a technical sense, and not in its ordinary signification. Physically and morally speaking, there was no resemblance between a corporation and a person in point of fact, a corporation was not capable of acting or forbearing to act, of assenting or dissenting, of willing either good or evil, of doing either right The wills and acts of a body corporate are nothing more or less, than the real unfictitious will and acts of some one or more individuals, imputed, however, on some intelligible principle, not to them as natural persons but as a body corporate, which was endowed with personality for the very purpose of being treated as if it had a will of its own,

or wrong.

6. The Members Consent to This Liability by Accepting the Charter. This is a question begging reason. They assented only if the law is that they are so liable. There is no express assent and, granted that there is, merely because one assents to criminal punishment, it does not follow that the punishment should be applied.

This reason also was borrowed from tort liability where it has often been fallaciously given. The principal is not bound because he consented, for he is bound in the absence of consent. It is no longer contended that the doctrine of respondeat superior rests on consent.44

7. The Difficulty of Proving the Guilt of the Guilty Parties Makes It Necessary to Hold the Corporation. This is a consideration that at once commands attention and respect. Since it is competent for the legislature to dispense with intent in certain prohibited acts, it is arguable that if difficulty of administration sufficiently demands, the courts may do the same thing in the case of corporations. Courts are continually weighing and balancing opposing considerations of public policy; so here, if this consideration of public policy outweighs the social desirability of requiring intent or guilty knowledge coupled with a prohibited act, then we will hold the principal responsible for the crimes of his agent by imputing the crime to the principal. On which side lies the balance of convenience? Without the facts, legal reasoning will not get us very far. No one man's "common sense" reaction here can be worth much more than a guess. A's limited experience in x locality commands that the corporation be punished. B's limited experience in y locality commands that an innocent man be not punished for acts of another. Both A and B have been prejudicially influenced by past habits of thought and recent influences of the forum and of the press. Nothing short of a scientific investigation than can find the facts will be of any assistance to us in deciding this question.45 Thus far, all and were capable of acting or not acting more or less after the fashion of mankind.

"With respect to crimes: Could a corporation be guilty of a crime? Some jurists say 'yes,' but it appeared to the reader that 'no' was the correct answer. No one was responsible for a crime who was not a party or privy to it, and it was only by a fiction that a corporation could be deemed guilty of a crime. The punishment of a fictitious person must also be imaginary, and, so as such, wholly useless. Those who contend that corporations can commit crimes were driven to make exceptions: for no jurists contended that adultery or bigamy, could on any principle or any analogy be imputed to bodies corporate."

44. Salmond op. cit. (supra, note 2) pp. 293 and 379.

45. Oliphant "The Relation of Current Economic and Social Problems to the Restatement of the Law," an address before the Academy of Political Science in New York, May 9 and 10, 1923. See also id. "Operation of Rules of Law," Am. Bar Assn. Jour. IX 497.

we have stated is the conclusion that "difficulty of proof" makes it necessary and desirable to punish the corporation. If it is a fact, as indicated by Mr. Justice Day, the facts would be illuminating.

The question of the difficulty of proof is a human weakness in our machinery of justice that we must generally face as a fact. When many persons act as a unit this difficulty is multiplied. We have not yet reached the point where we hold the innocent members of a labor union or a capital association responsible for the acts of its guilty members. Principals sometimes authorize or encourage their agents to commit crimes, but we do not hold the principal unless we can prove his guilt. Is there anything in the nature of a corporation that demands a different rule? Certainly the legal fiction cannot demand it. If it is socially desirable that innocent members of a corporation be punished for the imputed acts of the corporation, then it would seem that the same consideration of public policy would apply to large partnerships, joint stock companies, and business trusts. It is incongruous to let them escape and punish only the members of a corporation. The difficulty of proof is no greater in the one case than the other.

If public policy demands that the stockholders of a corporation be punished for the acts of the agents of the corporation, why stop with a fine? If the members of a corporation are responsible for larceny or murder, why not mete out to them the full punishment of a thief or a murderer? The punishment is unscientific and does not fit the crime. Furthermore, it is uncertain. Any stockholder can escape it by selling his stock. If punishment is to be an effective deterrent, it must be more certain than this. It must also be noticed that an entirely innocent purchaser of the stock may have the punishment shifted to his shoulders if the crime was committed before he bought the stock without notice of the crime. Is he punished for not "keeping his eyes open"? Suppose he used reasonable care? Our only refuge is in the comfortable doctrine of legal entity from which we were driven in the beginning.

CONCLUSION

When corporations failed to perform a public duty enjoined by the terms of the grant it was not illogical for the state to enforce compliance through the public prosecutor by means of an indictment. Nor was it illogical for the state to abate a nuisance, caused

46. As for neglect to keep roads in repair. The early cases are collected in 14A C. J. 871 n. 43 (a).

by the failure of the corporation to act, by indictment. If this is true, certainly a nuisance caused by a misfeasance could properly be abated by an indictment. The inaccuracy of calling these acts crimes coupled with a general tendency, for sound reasons, to broaden the liability of corporations in other fields, as in contracts and torts, has led to a mass of dicta and a very few scattered decisions to the effect that corporations are as responsible for crimes as are natural persons. The further mistake of failing to distinguish those acts absolutely prohibited by the legislature and those special statutory crimes imputed to the corporation from the ordinary crimes involving intent or guilty knowledge has added confusion to the conflicting dicta and decisions on the question. By the momentum of these facts the courts were often hard put to it for reasons to support their uncalled for conclusions. These reasons, for the most part, were unsound and have shown their counterfeit nature after a wide circulation. The trouble with most of the theories propounded to hold corporations to a criminal responsibility is that they fail to recognize the true nature of the corporation or the true purposes of criminal punishment. There is no escape from the conclusion that it is impossible to punish a corporation apart from its members. Punishment falls on the individual members alone. Such being the case, the punishment is awkward, unscientific, and uncertain.

It has been suggested that public policy demands that the corporation be punished. This may or may not be true. The demands of public policy would have to be very great to outweigh the policy of the law that demands that punishment for crimes shall only fall on those with guilty knowledge, and there just as heavy and no heavier than the case demands.47 In no other branch of the law is the principal responsible for the crime of the agent where the same demands of public policy are present. Certainly we cannot accept this conclusion until there has been a scientific investigation of the facts, unless the facts are of common and usual knowledge. In this age of regulations, inspections, reports, and "blue-sky" laws

47. Another practical evil tendency of indictment of corporations for crimes is that, for the moment, public indignation is hurled at the corporation, which is not much chagrined, and before the guilty parties back of the corporation are put to justice the public anger has become appeased by the sensational newspaper reports of the prosecution and fine of the cororation. The prosecutor has "vindicated the public rights," and incidentally his right to this office, or another; the guilty persons go unpunished setting aside another fine out of the loot they are again reaping. See Collier “Impolicy of Modern Decisions and Statutes Making Corporation Indictable, and the Confusion in Morals Thus Created," Cent. L. Jour. LXXI 421.