Simulatio

(a) Roman law

Simulatio brings us back from the lofty heights of State affairs to the dealings of more ordinary human beings: of purchasers and vendors of land, for instance, who wish to save taxes and notarial fees and hence record a lower purchase price in their notarial deed than the one they really intend to charge and pay.

The Roman lawyers had to battle with very similar problems. Thus, for instance, contracts of sale sometimes appear to have been concluded

¹³ Cf. Can. 1678-80 Codex Juris Canomd.

¹⁵⁴ Cf. e.g. Hans Thieme. "Die Ehescheidung Heinrichs VIII als europäischer Rechtsfall". in: Syntagma Friburgense, Historische Studien jiir Hermann Aubin (1956), pp. 257 sqq.

¹⁵³ For details, see e.g. Joseph Schnitzer, Katholisches Eherecht (1898), pp. 646 sqq. Napoleon and Josephine had contracted a civil marriage in 1796, but the Catholic marriage ceremony had taken place only on 1. 12. 1804, the eve of Napoleon's coronation as Emperor: Pope Pius VII had refused to crown a "concubine". Before the ecclesiastical court a variety of witnesses (inter alia Talleyrand) testified that Napoleon had not intended to enter into a marriage according to the rules of canon law. The civil marriage had already been dissolved beforehand, in accordance with art. 233 code civil. As is well known, Napoleon had taken a strong interest in the codification of French law, and left many marks upon the substance of the Code. The emphasis in the code civil on divorce "par consentement mutuel" is one example of this.

⁰⁵ For details, see Holzhauer, Festschrift Gmiir, pp. 128 sqq. There are situations in which a person may feel (morally) obliged or may even be forced to conceal the truth and thus to commit what appears to be perjury. If, under these circumstances, he formulates his oath sufficiently ambiguously, he will not be liable (at least in foro conscientiae) for perjury, even though he intentionally deceives the (human) addressees of the oath. For to God "all hearts are open, all desires known, and from him no secrets are hid", and one will therefore be able to rely on the fact that he will realize the real (but hidden) intention behind the words.

¹³⁷ «313 BGB.

without any intention on the part of the vendor to exact the purchase price. They were designed to disguise donations which the parties may have been unable to conclude: be it because of the provisions of the lex Cincia, or in view of the prohibition of donationes inter virum et uxorem. It is entirely in line with the flexibility with which the question of interpretation was approached in classical law that such simulated^[3340] transactions were, as a rule, not accepted at their face value: "Cum in venditione quis pretium rei ponit donationis causa non exacturus, non videtur vendere."^[3341] Originally, of course, transactions had been regarded as valid when and because all formalities had been complied with. The invalidity of the simulated transaction must have been unthinkable in the archaic days of Roman law. But this kind of rigorism had long been left behind.^{[3342] [3343] [3344] With the rise of the consensual contracts, the will had become a key factor in the determination of id quod actum est, and the parties who merely pretend to conclude a sale do not, after all, really want to be bound by it.}

(b) Ins commune; simulatio andfraus legis

Fourteenth-century Italy again saw a proliferation of simulated transactions;¹⁷⁰ trade and commerce were flourishing, and simulation appears to have been a popular technique to get around cumbrous local statutes and inconvenient ecclesiastical decrees, particularly the vexed prohibition against usury. So, incidentally, was the conclusion of transactions in fraudem legis: transactions which, although complying with the words of a specific law, had nevertheless specifically been designed to defeat its purpose and were therefore contrary to the spirit of the law ("[f]raus enim legi fit, ubi quod fieri noluit, fieri autem non vetuit, id fit").¹⁷¹ In actual practice it is often difficult to see whether a transaction has merely been simulated or is in fraudem legis, and it is hardly surprising that both doctrines have become intertwined and entangled in the course of the history of the ius commune. The term "simulation" was often used to cover all those situations where the parties had intended to circumvent a law.¹⁷² The way for this development had been paved by the commentators who had developed the same criteria for both legal doctrines and had summed up their analysis in the sentence "tot modis committitur simulatio quot modis

^B Mod. D. 44, 7, 54.

For an overview cf. M.D. Blecher, "Simulated Transactions in the Later Civil Law", (1974) 91 SAU 359 sqq.

® C4, 22, 2.

¹⁸ C. 4, 22, 3.

Cf. supra, pp. 483 sq.

^ro Blecher, (1974) 91 SAU 365.

^a Ulp. D. 1, 3, 30.

^m Cf, in particular, Savigny, System vol. I, PP· 324 sqq.jJan Schroder, Gesetzesauslegung utid Gesetzesumgehung (1985), pp. 15 sqq. committitur fraus".^[3347] Nevertheless, at least in theory, they had still emphasized the crucial distinction between the two: in the case of simulation, a legal transaction is made only in pretence; the parties do not really intend the transaction which they appear to conclude.

Over the centuries, many refined distinctions were developed concerning simulatio.^[3351] The canon lawyers, for instance, moralized the issue and recognized that simulation may be a legitimate way of achieving a noble end;^[3352] after all, even the Lord himself had simulated a sinner:.. simulationem peccatricis carnis assumpserit, ut,

condemnans in carne peccatum, nos in se faceret iustitiam Dei."^[3353] Reprehensible and to be rejected was a simulatio ex inhonesta causa. In practice, however, the law changed very little: id praevalere debet quod agitur, ei, quod simulatur, as Grotius put the basic principle in one of his opinions.^[3354] As a consequence, the simulated transaction was void. If the simulation had served to conceal another act,^[3355] it was usually acknowledged that the latter could be valid.^[3356]

In the course of the 19th century, the protection of third parties relying on the validity of the simulated transaction received attention. It was argued that the contract should not be treated as invalid with regard to them.¹⁸³ The BGB rejected this opinion,¹⁸⁴ but it ultimately found its way into § 916 II ABGB: evidence, again, of the relatively greater influence of the natural lawyers and their specific concern for a balance between subjective and objective elements in the concept of contract on the Austrian Code.'⁸⁵' ^me

^ls Cf.

¹⁸¹ "Motive", in: Mugdan, vol. I. p. 459: "Protokolle". in: Mugdan, vol. I. pp. 711 sq. For modern attempts in German law to provide protection to third parties cf. e.g. Flume, AT, § 20, 2 c (the simulated transaction is, with regard to third parties, to be treated as reservatio mentalisl); but see Kramer, op. cit., note 138, § 117, nn. 17 sq.

¹⁸⁵ Cf. generally Klaus Luig, "Franz v. Zeiller und die Irrtumsregelung des ABGB", in: Forsdtungsband Franz von Zeiller (1751-1828) (1980), pp. 153 sqq. and, more specifically, Wesener, Festschrift Hubner, p. 355.

¹⁸⁵ South African courts refuse to enforce simulated transactions. They give effect to the true intention of the parties rather than to what they purport to have done. In Zandberg v. Van Zyl 1910 AD 302 at 309, Innes CJ said: "Not infrequently,... the parties to a transaction endeavour to conceal its real character. They call it by a name, or give it a shape, intended not to express but to disguise its true nature. And when a court is asked to decide any right under such agreement, it can only do so by giving effect to what the transaction really is; not what in form it purports to be." If the parties have decided to record their contract in writing, this principle even prevails over the parol evidence rule (which, if strictly applied, could lead to severe inequities in cases of simulated transactions); cf. Christie, Contract, pp. 162 sqq.

CHAPTER 21