Sidebilder
PDF
ePub

modern times, has, however, been to multiply civil corporations, especially in the United States, where they have increased in a rapid manner, and to a most astonishing extent. The demand for charters of incorporation is not merely for municipal purposes, but usually for the more private and special object of assisting individuals in their joint stock operations and enterprising efforts, directed to the business of commerce, manufactures, and the various details of internal improvement. This branch of jurisprudence becomes, therefore, an object of curious as well as of deeply interesting research. The multiplication of corporations, and the avidity with which they are sought, have arisen in consequence of the power which a large and consolidated capital gives them over business of every kind; and the facility which the incorporation gives to the management of that capital, and the security which it affords to the persons of the members, and to their property not vested in the corporate *stock. The convention of the people of New- *272 York, when they amended their constitution, in 1821, endeavoured to check the improvident increase of corporations, by requiring the assent of two thirds of the members elected to each branch of the legislature, to every bill, for creating, continuing, altering, or renewing: any body politic or corporate.a Even this provision

prenticeships and examinations, destroyed free competition and perfection in the mechanic arts. The policy still prevails in many parts of conti. nental Europe, and in considerable vigor in Sweden. Laing's Travels in Sweden, 1838. In England the Statute Concerning Monopolies of 21 J. 1. c. 3, which was a magna charta for British industry, was a declaratory act, and declared that all monopolies and all licenses, charters, grants, letters patents, &c., " to any persons or bodies politic for the sole buying, selling, making, working, or using of any thing within the realm,” were unlawful and void, with the exception of patents for 21 years for inventions, &c., and of vested corporate rights, relative to trade. This statute, said Mr. Hume, contained a noble principle, and secured to every subject, unlimited freedom of action, provided he did no injury to others, nor violated statute law.

• This provision it has been said only applied to private and did not ap

seems to have failed in its purpose, for in the session of 1823, being the first session of the legislature, under ope

ply to public or municipal corporations. Nelson, Ch. J., in the case of The People v. Morris, 13 Wendell, 325. Walworth, Ch., in Warner v. Beers, 23 Wend. Rep. 126. Purdy v. The People, 4 Hill'8 Rep. 391. But it was decided by the supreme court of New-York in De Bow v. The People, 1 Denio, 1, and by the court of errors in the case of Purdy v. The People that the constitutional check extended to all corporations whether public or private, and that to ascertain whether a bill requiring a vote of two-thirds of each house was properly passed, the courts may look beyond the printed sta. tute book, to the original certificates endorsed on the bill, and even to the journals kept by the two houses. The constitution of Michigan requires the assent of two-thirds of the members of each house of the legislature to every act of incorporation. The constitution of New-Jersey also requires threefifths of the members elected to each house to pass any charter for banks or moneyed corporations, and all such charters to be limited to a term pot exceeding 20 years. The Revised Constitution of New York in 1846, imposed further restraints upon the creation, and further responsibilities upon the duties of corporations. It declared that corporations might be formed under general laws but should not be created by special act, except for municipal purposes, and in cases where general laws would not enable them to attain their object. The term corporation in the article was to be construed to include all associations and joint stock companies, having any of the powers and privileges of corporations, not possessed by individuals or partnerships. No act was to be passed granting any special charter for banking purposes, but corporations may be formed for such purposes under general laws. The legislature may provide for the registry of all bills and notes issued as money and require ample security for the redemption of them in specie. The stockholders in every corporation and joint stock association for banking purposes, issuing notes of any kind to circulate as money, after the 1st of January 1850 are to be indivdually responsible to the amount of their respective shares therein, for all its debts and liabilities contracted after that day. In case of insolvency of any bank or banking association, the bill-holders to have preference over all other creditors. Constitution of N. Y. of 1846, art. 8. The Constitution makes it the duty of the legislature to provide for the organization of cities and incorporated villages, and to restrict their power of taxation, assessment, borrowing money, contracting debts and loaning their credit ; so as to prevent abuses thereof. So the legislature itself is prohibited from giving or loaning in any manner the credit of the state to, or in aid of any individual, association or corporation. Const. art. 7, sec. 9. There has been a constantly increasing prejudice in this country against civil and especially moneyed corporations, ever since President Jackson, during his administration, commenced and carried on an unrelenting hostility to the bank of the United

ration of this check, there were thirty-nine new private companies incorporated, besides numerous other acts,

States, and which terminated in the final extinction of that bank. The constitution of Wisconsin established in 1846 went to the utmost extreme in its hostility to all banking institutions. It declares that there shall be no bank of issue within that state; that the legislature shall not have power to authorize or incorporate any institution having any banking power or privilege, or confer any banking power or privilege on any institution or person ; that no corporation or person within that state under any pretence, shall make or issue any paper money, note, bill, certificate, or other evidence of debt, intended to circulate as money; that no corporation within that state, under any pretence, shall exercise the business of receive ing the deposits of money, making discounts, or buying or selling bills of exchange, or do any other banking business whatever ; that no bank or agency of any bank or banking institution in or without the United States, shall be established or maintained in that state; that it shall not be lawsul to circulate within the state after 1847, any paper money, note, bill, cer. tificate or other evidence of debt, less than the denomination of $10, and after 1849 less than $20, and the legislature is required forthwith to enact adequate penalties for the punishment of all violations and evasions of the provisions.

The construction of the restrictive clause, in the constitution of NewYork of 1821, received a learned discussion and great consideration, in the cases of Warner v. Beers, President of the North American Trust and Banking Company, and of Bolander v. Stevens, President of the Bank of Commerce in New York. 23 Wendell's Rep. 103. Those institutions were voluntary associations of individuals formed under the provisions of the act of New-York. of April 18th, 1838, entitled “ an Act to authorize the Business of Banking," and which act allowed the voluntary creation of an indefinite number of such associations, at the pleasure of any persons who might associate for the purpose upon the terms prescribed by the statute. The great question raised in those cases was, whether those institutions were corporations within the purview of the constitution, requiring the assent of two thirds of the members elected to each branch of the legislature, to every bill creating any body politic or corporate ; and the statute in that case did not appear to have been passed, and did not in fact pass by such an enlarged majority. The decision of the court of errors, on a writ of error from the supreme court, on the 7th of April, 1840, was that the banking act was constitutionally passed, though it did not receive the assent of two-thirds of the members elected to each branch of the legislature, and that the associations formed under the act were not bodies politic or corporate within the meaning of the constitution. It seemed to be admitted, in the opinions given, that the restrictive clause had not answered the policy which dictated it. It was considered that the spirit and mean

amending or altering charters. The various acts of incorporation of private companies, for banking, manufacturing, literary, charitable and insurance purposes; for turnpike and rail-roads and toll-bridges; and for many other objects, upon which private industry, skill and speculation, can be freely and advantageously employed, constitute a mighty mass of charters, which occupy a large part of the volumes of the statute law in almost every state. All these incorporations are contracts between the government and the company, which cannot ordinarily be affected by legislative interference; and it has accordingly been attempted to retain a control over these private incorporations, by a clause, now usually inserted in the acts of incorporation, that "it shall be lawful for the legislature, at any time thereafter, to alter,

ing of the restrictive clause, was to guard against the increase of joint stock corporations for banking and other purposes of trade and profit to the corporators, with exclusive privileges, not enjoyed by the citizens at large —that although those bauking associations had many of the distinguishing characteristics of corporations, they did not come within the true legal interpretations, and still less within the spirit and design of the restrictive clause. The statute conferred the power of free banking, and did not create any monopoly, nor secure to any association, privileges which might not be enjoyed in the same manner by all others, nor place them beyond the entire control of the legislature. This decision of the court of errors was received and confirmed on the principle of stare decises, in a subsequent writ of error from the supreme court to that court in December 1845, in the case of Gifford v. Livingston. 2 Denio R. 380. But though these associations are not corporations within the spirit and meaning of the te. strictive clause in the constitution, requiring the assent of two-thirds of the members of each branch of the legislature to pass a corporation, yet it is held that they are to all other intents and purposes corporations, and as such, liable to taxation on their capital, if deriving any income or profit from it, like other corporations. The People v. Assessors of Watertown, I Hill's N. Y. Rep. 616. The People v. The Supervisors of Niagara, 4 Hill's N. Y. Rep. 20. See also infra, vol. 3. p. 26, for a British statute founded on similar principles in the creation of joint stock companies. The above decision in 4 Hill was affirmed on error in the same case in 7 Hill, 504.

• The laws of Massachusetts give the greatest facility to the creation of bodies politic and corporate. “When any lands, wbarves, or other real

modify, or repeal the act."a With this general view of the rise and progress of corporations, I shall proceed to a more particular detail of the general principles of law applicable to the subject.b

estate, are held in common by five or more proprietors, they may form themselves into a corporation.” Revised Statutes of 1835, part 1. tit. 13. ch. 43. sec. 1. So, in New York, by statute in 1811, (and which is still in force,) manufacturing corporations may be created by the mere association of five or more persons filing a certificate designating their name, capital, object, and location. A similar law was passed in Michigan and in Connecticut in 183 The increase of corporations, in aid of private industry and enterprise, has kept pace in every part of onr country with the increase of wealth and improvement. The Massachusetts legislature, for instance, in the session of 1837, incorporated upwards of seventy manufacturing associations, and made perhaps forty other corporations relating to insurance, roads, bridges, academies, and religious objects. And in 1838, the legislature of Indiana authorized any twenty or more citizens of any county, on three weeks previous public notice, to organize themselves and become an agricultural society with corporate and politic powers; and the inhabitants of any and every town or village may incorporate themselves for the institution and management of a public library. In Pennsylvania, the courts of quarter sessions, with the concurrence of the grand jury of the county, may incorporate towns and villages. Purdon's Dig. 130, and literary, charitable or religious associations and fire companies, may be incorporated under the sanction of the supreme court. Ib. 168.172.

. In Massachusetts there is a standing statute provision, that every act of incorporation, which should be thereafter passed, shall at all times be subject to amendment, alteration, or repeal, at the pleasure of the legislature, unless there should be in the same act an express provision to the contrary. Act of 1830. Revised Statutes of 1835. In North Carolina, all bodies corporate are limited to thirty years, unless otherwise specially declared. Revised Statutes of North Carolina, 1837. In New-York it is held, and very correctly, that though a charter of incorporation cannot pass without the assent of two-thirds of the members of each house, it cannot bo altered without the like assent, notwithstanding the charter contains the reservation of a power in the legislature to alter, modify or repeal the charter at pleasure ; for that reservation conferred no new power, but was only to retain the power which the legislature then had over the subject. Com. Bank of Buffalo v. Sparren, 2 Denio R. 97.

b There has been a disposition in some of the states, to change, in an essential degree, the character of private incorporated companies, by making the members personally responsible in certain events, and to a qualified extent, for the debts of the company. This is intended as a check to improvident conduct and abuse, and to add to the general security of cre.

« ForrigeFortsett »