The Principle of Social Function of Property in Brazilian Law: Constitutional Principles and Their Application

Martins Rafael Dias, Postgraduate Student, Department of Civil and Labor Law, People’s Friendship University of Russia, Moscow, Russia

This paper analyzes both theoretical and practical aspects of the principle of the social function of property. It also deals with the constitutionalisation of civil law in its practical and theoretical aspects as well as its effects in case law. It briefly explains the nature of the institute of property in light of fundamental rights and freedoms enshrined in the Constitution of Brazil 1988.

Key words: Constitution alisation of civil law, principle of social function of property, nature of fundamental rights and freedoms.

The constitutional principle of social function of property in Brazil has a long history in Brazilian law. This idea was neither original nor new to Brazilian law system prior to the 1988 Constitution, but only after it was enacted did Brazilian scholars began to debate the principle more intensely and were able to refine its concept to an unthinkable extent. Since 1988, it has had a great impact on both court practice and science of law. The constitutional principle of the social function of property transforms the property without socializing it, as José Afonso da Silva, professor at São Paulo's University, have said[1].

This kind of profound change in the civil law is the result of a long development which Léon Duguit (1859-1928), professor at the University of Bordeaux, foresaw a century ago. At that time, he realized that it was becoming a reality, but initially with respect to public law. Nevertheless, Duguit recognized that such a change was largely related to the very foundations of private law. In his work "The General Transformations of Private Law after the Napoleonic Code", he shows that the boundaries of private and public law are increasingly blurred. In this context, a new theory of the content of the property right has emerged, although very contradictory from the point of view of the classical theories of property. In accordance with  his theory, property is not anymore a right, but, actually, a social function[2].

Duguit, referring to the judicial practice in France, claimed that ownership had lost its quality of subjective rights. It primarily embodied a duty to comply with its social function. Among the examples cited by the author, attention is drawn to the case dealing with the state, or rather, the company with a license given by the government to conduct electrical cables on top of private houses.

One would think that the right of the owner of a building extends not only to the surface of the land on which the building is located, but also on the space located above and below the surface. After all, according to the maxim of Roman law, "qui dominus est soli dominus est usque ad caelum et usque ad inferos", i.e. "whoever owns the soil, it is theirs all the way up to Heaven and down to Hell".

However, the example given by Duguit displays his concept of  property. In fact, the state (or the licensed company) had no right to conduct wires above the buildings, as they had no property on the land. Why then the state allowed itself to conduct those cables? If the owner appealed to the court for protection, would he succeed to protect his right? Or the owner had to refrain from going to court, even assuming that his right has being violated?

Duguit had the idea of social function when looking for answers to such questions. After developing his theory, he came to the conclusion that no one has rights, neither individuals nor all individuals as represented by the state, because they are all bonded by some social function. There is no subjective right and no autonomy of the will. All these metaphysical notions are inconsistent with the "positivism of our time", he wrote.

For Duguit, life in society is the only way to meet human needs, entailing the duty of every person to perform his social function. Resorting to sociological concepts such as division of labor, differences in the ability of people, etc., he argues that there is no freedom (autonomy of the will), because if there were real freedom and subjective rights, one would be entitled to do nothing. In fact, emphasized Duguit, no one has the right to idleness.

He called himself a realist, since he refuted legal formalism and, in particular, the metaphysical notions of right (subjective right, autonomy of the will); in his opinion, worthy of interest were only  facts taking place in the field of law practice. He acknowledged the fact that it is impossible not to have  legislation, but, from the beginning, the legislator would never guess the meaning it would acquire in judicial practice. Therefore, for Duguit, laws were not the object of the study of law; he admitted only social facts as such.

It should be noted that almost all legal scholars agree that the social function of property is not the only suitable concept to explain the limitations of rights, but there are others comparable with or equated to it.

For example, for the first time, the Weimar constitution enshrined the formula that is now contained in the Basic Law for the Federal Republic of Germany of 1949, «Eigentum verpflichtet», or "property obliges". This formula is very peculiar, as it equates a right to an obligation[3].

The Constitution of Mexico of 1917 also sets forth such a norm in its Article 27, which states: "The Nation shall at all times have the right to impose on private property such limitations as the public interest may demand, as well as the right to regulate the utilization of natural resources which are susceptible of appropriation, in order to conserve them and to ensure a more equitable distribution of public wealth. With this end in view, necessary measures shall be taken to divide up large landed estates; to develop small landed holdings in operation; to create new agricultural centers, with necessary lands and waters; to encourage agriculture in general and to prevent the destruction of natural resources, and to protect property from damage to the detriment of society. Centers of population which at present either have no lands or water or which do not possess them in sufficient quantities for the needs of their inhabitants, shall be entitled to grants thereof, which shall be taken from adjacent properties, the rights of small landed holdings in operation being respected at all times"[4].

In fact, the idea of social function of property is a rebellion against the strong liberal model of the 18^th  century in which rights were considered from the subjective  rather than from the social point of view [5]. Such contradictions have become even more apparent after the spread of communist movements.

In Brazil, the 1824 imperial constitution already placed certain restrictions of ownership; the constitution of 1934, as well as the Weimar Constitution established that property cannot be exercised at the expense of social or collective interests. The following Brazilian constitution, adopted in 1946, guaranteed the right of ownership due to social welfare. The constitutions of 1967, 1969 and the current one of 1988 establish a social function of property.

It should be noted that the question of limitations of subjective rights, including property, has interested Brazilian researchers for long time. Brazilian jurists began to address it already in the 19^th  century[6], but mainly and more consistently by the end of the 20^th  century, exactly after the promulgation of 1988 Constitution.

Despite the fact that Duguit was a researcher in the public law area, when arguing his position on the changes in  the content of civil institutions he stayed exclusively within a civil law framework, not public law[7]. In other words, the principle of the social function of property has been designed  primarily within the civil law science, not the science of constitutional law. It is important to keep that in mind, considering that  legal scholars in Brazil usually state that this principle is studied in the framework of constitutional law, which  is wrong as we have just confirmed.

The Basic Law for the Federal Republic of Germany of 1949 kept the Weimar's constitution's formula "Eigentum verpflichtet", but entrusted the lawmaker with establishing the content and restriction to property by a special act (Art. 14). It seems to be a very adequate solution, since property is an institution of civil law and, respectively, relations of property are governed by civil law and not constitutional law.

 Since the first theoretical works on the social function of property, the civil law science has not left the matter unattended, studying the social function of civil law institutions.

The tendency of restricting rights for the sake of social interests is not new in and of itself. Some lawyers insist that changes are being made to the inner structure of the right, so it is not a "property right" anymore, but a "property-function", while others defend the position that property is the classic property with some restrictions, and believe that property is a subjective right with a social function.

In other words, the problem which Brazilian civil law has been facing during the past decade is related to the question of the legal nature of constitutional norms and principles and their impact on civil relations, as well as the very structure of rights. Perceiving this matter requires recourse to civil and constitutional matters, and, above all, to the constitutionalization of civil law[8].

In the Brazilian legal literature, scholars usually argue that the Constitution of 1988  ensured the so-called constitutionalization of civil law[9]. The question of a constitutionalization cannot be considered as trivial, considering that in present-day Brazilian scholarship, the meaning thereof remains quite unclear. The interpretation of the concept of "constitutionalization" still remains within a doctrinal framework, and it was first made on the basis of a few decisions of the Supreme Federal Court of Brazil, which has the constitutional jurisdiction.

In general, constitutionalization means that chief provisions of the main institutions of civil law (such as property, family, etc.) are stipulated in the Constitution, despite the fact that there is no agreement among legal scholars on this issue. Unfortunately, in an article it is impossible to go deep into the subtle details of the topic, since it is a very broad matter. However, there are reasons to believe that the Brazilian judicial practice of the last decade has overestimated   constitutional principles in the name of the so-called constitutionalization of civil law. As a result, courts often contradict the current law provisions, thereby significantly reducing legal certainty. To explain the problem we need to give some examples of courts decisions.

The first example is about a case heard by the Court of the state of Rio Grande do Sul of Brazil. The court has issued a very interesting decision, but it is clearly contrary to the law currently in force. The decision was made on the basis of the constitutional principle of the social function of property. The case was about the abolition of the clause of restriction on sale of property. This provision prohibits the heir or donee to alienate the property received as a gift for compensation or without it. Since such a burden on the property is established in favor of the heir or donee, the Brazilian civil code provides that the abolition thereof is only possible in the case of hard economic situation of the heir or donee. The court of first instance came to a conclusion in accordance with  the law  in force, and one of the parties  decided to appeal against the decision. After the assessment of the case, the second instance court came to a different conclusion. His decision was based precisely on the principle of the social function of property, although the current legislation does not allow the abolition of the clause of restriction on sale of property on the basis of the principle of the social function of property[10].

This example illustrates the underprivileged situation with  positive law in Brazil on account of the constitutionalisation of civil law. The rapporteur (relator) of the case  sided with the decision of the first instance, but the other members of the court expressed divergent opinion, as we have mentioned  above. It shows that judges are divided when it comes to the constitutionalisation of civil law.

The second example is about the acquisition of movable property by acquisitive limitation (prescription). In the case in question, a party got a car a lease agreement, but did not comply  with all obligations under the contract. As a result, the party lost the legal basis of the possession and it became illegal. The circumstances of the case clearly pointed out that the acquisition of property by virtue of usucaption was impossible, since the possession became illegal. During the trial, it became clear that the debts were already prescript, and were not callable anymore. The matter went to the second instance court, and it ruled in favor of the owner. The draft decision prepared by the rapporteur considered the prescription of the debt, but noted that it could not serve as foundation for prescription. One of the judges expressed a different opinion, which later turned out to be supported by all other members of the court. He asserted that the illegal possession became legal by virtue of the long-term economic usage of the property with the intention to be its owner (animus domini), and he resorted to the principle of the social function of property to substantiate his assessment of the situation. Thus, continued economic exploitation of property was considered sufficient to change the quality of possession, transforming it from illegal to legal and recognizing prescription[11].

This example illustrates the full scope of the problem of inner structure of rights, though, perhaps, not plainly. Property right has a certain structure, it is a subjective right. The idea of social function is addressed to all the rights, including property rights. On the one hand, it is an incentive to the subject to use all the advantages of his rights, and, on the other hand, it is a threat to the right of the subject who does not use it. In this last case, the state may affect one's private legal sphere. Anyhow, it does not seem  to change its inner structure; in the end, a right is a right, even if it is limited by social, environmental or economic factors. Thus, rights, including property still remain   rights in the traditional sense.

The Brazilian national congress stuck to this notion of right when redacting the civil code. The very text of the civil code gives clear evidence of  that:

Art. 1.228. The owner has the right to use his thing, enjoy and dispose of it, and the right to reclaim it from the power of whoever illegally own or possess it.

§ 1. The property must be exercised in accordance with their economic and social purposes, as far as the flora, fauna, natural beauties, ecological balance, historical and artistic heritage are preserved and air and water pollution is avoided, in accordance with the provisions of special laws.

§ 2 Acts that do not bring the owner any comfort, or usefulness, and are encouraged by the intent to harm others are forbidden[12].

 Article 1228 establishes the right of property in its traditional form, and the text does not express any changes in the nature of property. In other words, the property continues to be a right, despite the imposition of limitations in the paragraphs of the article. The wording of paragraph 1 states that "The property right should be exercised...", that is, it plainly establishes the institution of property as a right.

In our opinion, as a rule, the principle of social function of property, as regards  real rights, should be applied according to the criteria established by the Civil Code. The real right to property is regulated by the Civil Code, and it regulates the constitutional principle of social function of property. Therein lies the so-called "external" theory of fundamental rights, which is also reflected in the aforementioned article of the Basic Law of Germany 1949.

The "internal" theory of fundamental rights and freedoms is based on the fact that such restrictions are immanent part of the rights, and thus change the rights in its inner structure. Practice also shows that if the law is applied from the point of view of the "internal" theory, the Civil Code’s limits to property by virtue of the social function are merely examples among other manifestations thereof. In such a case, it is impossible to respond to any law controversy not considering its social function, since property would not be a right anymore, or, at least, not only a right, but a right-function.

The "internal" theory is in full accordance with the Duguit's conclusions that property is not a right, but a function. Of course, it destroys the traditional idea of ownership. Of course, it is difficult to establish the roots of this trend; its origins go several centuries back in history. In close retrospect, however, it seems that the adoption of the 1988 Constitution exacerbated the situation.

The Civil Code of 1916 was in force until the promulgation of the Civil Code of 2002, that is, when the Constitution of 1988 came into force. The project of the Civil Code of 1916 was written in 1899 and it was heavily influenced by ideals of liberalism. Despite repeated attempts to full-scale reform the civil law, the basic concepts of the old Code remained intact until the adoption of the Constitution in 1988. There had been some gradual changes, which, however, did not attenuate the need for reform. Not only its provisions, but the system and the base of the Civil Code itself had been surpassed up to that time[13]. The uncertainty of a quick reform and the fear that the old-fashioned civil institutions enshrined in the 1916 Civil Code would be kept in force constrained the Federal Supreme Court of Brazil to declare the binding force of constitutional principles and the automatic abrogation of unconstitutional laws and provisions.

Indeed, not many laws in force at that time were compatible with the Constitution, so after the adoption thereof, they became inapplicable, including many provisions of the 1916 Civil Code. So, at that time, it was normal not to apply some provisions of the 1916 Civil Code, given its incompatibility with the Constitution. The judges began to rule against it, and against many other laws incompatible with the Constitution. One decade or so of intense legislative activity, to adapt  regulations to the new constitutional standard have created this culture that the law is not so important, and anytime in the name of a hallow constitutional principle we can rule against it. That is exactly what we see after the adoption of the 2002 Civil Code and other laws. The situation should be solved, since now there is the  Civil Code in Brazil assumed constitutional, but, actually, everything is getting worse .

The problem is related to the idea that the Constitution is an instrument of justice, as Civil Codes are blamed for spreading liberal and bourgeois values, and, thus, the very idea and nucleus of Civil Codes are surpassed[14]. Interestingly, Civil Codes and Constitutions, actually, emerged as a tool for establishment of bourgeois values, but over time this trend was reversed with respect to both.

In addition to this, as we have already mentioned,  constitutionalization is a doctrinal construction, built on the basis of a decision of the Federal Supreme Court that laid down the binding force of  constitutional principles. There is no uniform definition of constitutionalization in the doctrine, so the law does not define it either. The very idea that subconstitutional legislation must be compatible with the Constitution is not new at all. In the 19^th century, A. Teixeira de Freitas (1816-1883) did not include in his Consolidation of Civil Laws (1958) many laws in force at that time, because they were not compatible with  the Constitution of the Empire of Brazil[15].

It is also not possible to define constitutionalization,  considering the fact that  chief provisions of the main institutions of civil law were included in the Constitution, since the Constitution of the Empire (1824), as it has been said above, also had set forth property and limitation thereto. However, in the courts’ practice, constitutionalization is a living phenomenon that cannot be ignored. There are even some bold lawyers who refer to civil law as “civil constitutional law”, stating that there is no civil law anymore[16].

Indeed, in all its manifestations and justification, the constitutionalisation is a ruling paradigm of the Brazilian legal science, including the science of private law. Many researchers have asserted that the private law has lost its quality system due to several factors, but mainly to the emergence of the so-called "microsystems" of legal regulation, such as the Consumer Protection Code. Despite the fact that the relations of these "microsystems" are similar to those regulated by the Civil Code, they need a different model of regulation.

Contract of sale for consumers is slightly different compared to that in the Civil Code for example. The need for different kinds of regulations for issues provided by Civil Codes before would make them  no longer the centrali element of law regulation, but the Constitution would take this position, especially in its evaluative manifestations, that is, principles. They see the Constitution as a  perfect regulation because of its principles. Some say that a Civil Code is not necessary anymore in the face of the "riches" of the 1988 Brazilian Constitution. It seems that these are   hallow principles as  the "social function of property" can solve all law issues fairly, and, as some would say, in such case, why do we need legal certainty if we have justice?

By the way, although the Brazilian 2002 Civil Code established the unification of civil and commercial matters, since 2011 the Brazilian Congress has been considering a project of the new Commercial Code for Brazil. The project clearly reflects the idea of rejection of principles in favor of clear rules to ensure legal certainty. This is where lawyers are ready to separate commercial law from civil law for the sake of legal certainty, which definitely shows that principles are not enough to regulate complex relations of the modern world[17].

Anyway, constitutional principles in Brazil have enormous influence  on the judicial practice, whereby it does not  build, as some claim, but destroys the legal system, particularly of private law. In addition, this situation strikes not only at the system, but at the legal certainty, achievements of  modern legal science and practice, in which the Civil Codes played an important role.

Thus, the idea of "constitutionalisation " of civil law needs to have its essence clarified, otherwise it is impossible to subject it to more substantial criticism. However, it seems that the majority of Brazilian lawyers are in a "dogmatic sleep" for that matter. The Constitution is the supreme law for all legislation, but it does not mean that a simple value (such as the social function of property) can solve all the questions and give the courts the authority not to apply provisions of   laws currently in force. These principles should be applied in the case of absence of law regulating a constitutional right/principle or obligation, or when a law is not compatible with the Constitution. In the cases we have analyzed none of these situations is observed.

The principle of the social function of property should be interpreted in accordance with the provisions of the Civil Code (as regards to real rights). The legislator has set forth a number of restrictions on property, so there is no doubt about the nature of the social function. Despite this, the judicial practice generally follows another trend, sometimes even against  positive law, which raises very serious questions related to legal certainty. However, the above-mentioned cases show disagreement among the judges, which  gives us hope that things will change for the better, in favor of legal certainty.

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