This section is from the book "Science Of Legal Method", by Ernest Bruncken. Also available from Amazon: Science of Legal Method.
In private law, the discovery of the intention of parties plays an almost overshadowing part. The will or intention a party has had, as well as other psychological facts required to find the proper decision, are assumed, as a matter of principle, to form a part of the state of facts in each case. No doubt in by far the greater number of instances this is actually correct. For example, in a criminal trial the "objective" and "subjective" facts, the outward acts and the inner disposition of the defendant, e.g. his malicious intent, are equally subjects of proof.
On the other hand we have already taken occasion to show that, especially in civil actions, the discovery of mental facts, especially the intention of the party, seems to be considered by the Supreme Court in part as a question of law. We shall now venture a few observations on this point, which however will fall far short of exhausting this infinitely complicated matter.
157 Menger calls special attention to this in "Das burgerliche Recht und die besitzlosen Klassen."
158 Thus the general conscience did not support the refusal of Vienna courts to extend the employers' liabilty law to electric lines, because the statute speaks of "steam railroads" and the courts relied on the force of the above rule of interpretation. The courts found it all the easier to overrule themselves because they were themselves trying to get the practical effect of an extension of the statute by analogy in another and roundabout manner.
First, in regard to discovering the intention of the party, we shall find, upon close inspection, a phenomenon that might be taken as analogous, although in a much less degree, to one we observed in connection with the search for the "will of the legislator." There is remarkable uncertainty regarding the object of the inquiry.
From the beginning, two theories have been contending with each other and neither has been able to gain a foot of ground. One is the theory of expressed intention, placing most stress on the declarations the party has actually made and which therefore has an objective existence. The other theory is that of the real intention. It seeks to discover, behind the declaration, the actual psychological processes of which the declaration was the result.
Most peculiar, however, is the way in which legislation has acted with regard to this battle of theories. It would seem that the matter could have been decided by a single statutory provision; but instead of accepting one or the other of these views plainly and unambiguously, nothing at all is done in the matter, or, as in the Austrian Civil Code, there is a turning and twisting through a maze of provisos. For instance, section 278 of the Commercial Code accepts the theory of real intention; but the very next section, section 279, refers the judge, in order to ascertain the meaning of acts or omissions, to the meaning attaching to such acts or omissions by themselves in the light of existing customs and usages. This is a very important limitation on the provisions of the preceding section, and it is not easy to see the full consequences.
The new German Civil Code, in one place (section 133) provides: "In the interpretation of the intention of a party the real intention shall be ascertained instead of adhering to the literal sense of his declaration." However, in another place, section 157, the code provides that "contracts shall be interpreted so as to maintain good faith with due regard to the usages of business." This makes the objective meaning of the declaration the important thing, and certainly this objective meaning will not always be identical with the "real intention."
From this condition of both theory and legislation we may conclude that the process of ascertaining the intention of the party, like that of finding the legislative intent, although to a less degree, stands in need of some vagueness, some leeway, if it is to correspond to the requirements of real life.159 However, just because we do not confine ourselves to the discovery of the actual intention some private person has had, but go beyond that and try to ascertain the objective meaning of some act, declaration, or omission, just for that reason it is the same as in the case of the legislative intention. To interpret that meaning it is necessary to untangle the most varied mass of opinions, observations, and value judgments. That mental operation forms a part of the "finding of the law." It is therefore a part of juridical thinking, and subject to the same sort of influences as the discovery of the "intention of the legislator." It deals with the same sort of subject material as "projection." It is this so-called social side of the inquiry into the intention of the party, to which, evidently though imperfectly, those statutory provisions refer which, like the sections cited above, speak of usages, good faith, customs of business, trade habits and the like. In determining the meaning of a contract, we may see an evident inclination to assume as long as possible that both parties are honest people acting in accordance with good morals. Where one party, or both, have as a matter of fact attached some reserved meaning to a declaration, with a view to obtaining a more advantageous position, practising economic extortion, or the like, such actual intentions cannot be'utilized, even if they are proven, for the interpretation of the legal intention, the "manifest will of the party." As far as possible they will be ignored by the courts. At the same time, the judge will decide what constitutes deceit, overreaching, etc., in the light of the statute on the one hand, of his whole mental attitude towards the life of society on the other.
159 The reason for this must be sought in the denial that there is a transition zone between rules and facts, and in the formal representation for the whole process of juridical thinking as the subsumption of given facts under a given intention of the legislator. In truth, however, the transition zone thus eliminated from the account does exist just the same, and there is nothing left but to extend the two other categories to cover it.