Sidebilder
PDF
ePub

*II. Of the various kinds of corporations, and how created.

Corporations are divided into aggregate and sole. A

ditors; and the policy has been pursued to a moderate and reasonable degree only, in Rhode-Island, New-York, Maryland, and South Carolina. But in Massachusetts, by a series of statutes, passed in 1808, 1818, 1821, and 1827, an unlimited personal responsibility was imposed upon the mombers of manufacturing corporations, equally as in the case of commercial partnerships. The wisdom of the policy has been strongly questioned ; (Amer. Jurist, vol. ii. p. 92, art. 6. Ibid. vol. iv. p. 307 ;) and, on the other hand, it has been supported by high authority ; (Parker, Ch. J., 17 Mass. Rep. 334;) and whether it be well or ill founded, it is admirably well calculated to cure all undue avidity for charters of incorporation. This unlimited personal responsibility was restrained by statute in 1828 and 1830, and the responsibility applied only in the case of banks to the stock. holders at the time of loss, by mismanagement of the directors, or for outstanding bills at the time the charter expires. They are made liable in their individual capacities, only to the extent of the stock they may hold in the bank at the time of the abuse, or at the time of the expiration of the charter. This provision was continued by the Massachusetts Revised Statutes of 1835, p. 312, sect. 30, 31, and it has been essentially adopted by statute in New-Hampshire in 1837, in respect to manufacturing corporations. Persons holding stock in corporations as trustees for others, are especially exempted from personal responsibility. Act of Mass., 1838. The personal liability of the stockholders does not enable the creditors to sue them. It is the business and duty of the corporation, enforced by bill in equity in its name, to compel payments from individual stockholders. Baker v. Atlas Bank, 3 Metcalf, 182. In Percy v. Millauder, 20 Martin's Rep. 68, directors of a bank were held personally responsible to the stockholders for gross negligence, or wanton disregard of duty. The statutes of Michigan in 1837, 1838, go further, and make the directors liable for the amount of indebtedness of an insolvent bank, and stockholders are made liable secondarily in proportion to the amount of their stocks. See Angell f. Ames on Corporations, p. 546—564, 3d edit. relative to the personal responsibility of corporators under state statutes.

In Eugland, the statute of 4 and 5 William IV., ch.94, reciting 6 Geo. IV., ch. 91, by which the king was enabled to render the members of any corpo. ration thereafter created, individually liable for its contracts, enacted that the king, after three months' notice in the gazette of his intention, might, by letters patent, grant to any company, or association, for any trading, charitable, literary, or other purpose, corporate powers, subject to such conditions for the prevention of abuses in the management of their affairs,

a Co. Litt. 8. b. 250. a.

corporation sole consists of a single person, who is made a body corporate and politic, in order to give him some legal capacities and advantages, and especially that of perpetuity, which, as a natural person, he can not have. A bishop, dean, parson and vicar, are given in the English books as instances of sole corporations; and they and their successors in perpetuity take the corporate property and privileges; and the word successors is generally as necessary for the succession of property in a corporation sole, as the word heirs is to create an estate of inheritance in a private individual.a A fee will pass to a corporation aggregate, without the word successors

the security of creditors, and the protection of the public, as the king may seu fit to impose ; but no execution upon any judgment or decree to issue without special leave of the court, after notice of the persons to be charged, nor after the expiration of three years after such person shall have ceased to have been a member of the company. See, also, Infra, vol. 3. p. 27, note. By the statutes of 8 and 9 Victoria, for consolidating in one act the provisions respecting the constitution of incorporated companies, ch. 16, 17, 18, shareholders are liable individually to the amount of their shares, and no further. In New-York, not only manufacturing incorporations under the general act of March 220, 1811, ch. 67, but in several of the charters of fire insurance companies, there is a provision, that in respect to the debts of the company contracted before the corporation expires, the persons composing the corporation at the time of its dissolution, shall be individually responsible to the extent of their respective shares in the funds of the company. By this means a stockholder, according to some recent decisions, incurs the risk, not only of losing the amount of stock subscribed, but to be liable for an equal sum, provided the debts due at the time of the dissolution require it. See, Briggs v. Penniman, 1 Hopkins' Rep. 300. S. C. 8 Cowen's Rep. 387; and see infra, p. 312. The tendency of legislation and of judicial decisions in the several states, is to increase the personal responsibility of stockholders in the various private corporate institutions, and to give them more and more the character of partnerships, with some of the powers and privileges of corporations. In Angell f. Ames on Corporations, ch. 17, 3d edit. the extent of the personal liability of the members of a private corporation for the debts of the company, is fully examined.

a Ibid. 8. b. 9. a. There are instances in this country of ininisters of a parish seized of parsonage lands in the right of his parish, being sole corporations, and of county and town officers created sole corporations by statute. Angell f Ames on Corporations, 3d edit. 25.

in the grant, because it is a body, which, in its nature, is perpetual; but, as a general rule, a fee will not pass to a corporation sole, without the word successors, and it will continue for the life only of the individual clothed with the corporate character.a There are very few points of corporation law applicable to a corporation sole. They cannot, according to the English law, take personal property in succession, and their corporate capacity, in

that respect, is confined to real property.b The *274 corporations generally in *use with us, are aggre

gate, or the union of two or more individuals in one body politic, with a capacity of succession and perpetuity. Besides the proper aggregate corporations, the inhabitants of any district, as counties, towns, and school districts, incorporated by statute, with only particular powers, are sometimes called quasi corporations. No private action for neglect of corporate duty, unless given by statute, lies against them, as such a corporation. Having no corporate fund, each inhabitant is said to be liable to satisfy the judgment, if the statute gives a suit against such a community.c

Another division of corporations, by the English law, is into ecclesiastical and lay. The former are those of

Co. Litt. 94. b., and notes 46 and 47, to Co. Litt. lib. 1. Viner, tit. Estate, L.

bi Kyd on Corp. 76, 77. Co. Litt. 46. b. But, by statute, a corporation sole may be enabled to take personal as well as real property by succession ; and a treasurer or collector, for instance, is sometimes created a corporation sole, or quasi corporation, for the purpose of taking bonds and other personal property to him in his official character, and of transmitting the same to his successors.

• Russel v. The Men of Devon, 2 Term Rep. 667. Riddle v. Proprielors of Locks, &c., on Merrimack River, î Mass. Rep. 187, Parsons, Ch. J. Merchants’ Bank v. Cook, 4 Pick. Rep. 414. Adams v. Wiscasset Bank, 1 Greenleaf's Rep. 361. Chase v. Merrimack Bank, 19 Pick. 569. In the case of the Attorney General v. Corporation of Exeter, (2 Russel's Rep. 63,) Lord Eldon held, that if a fee-farm rent was chargeable on the whole of a city, it might be demanded of any one who holds property in it, and he would be left to obtain contribution from the other inhabitants.

which the members are spiritual persons, and the object of the institution is also spiritual. With us, they are called religious corporations. This is the description given to them in the statutes of New York, Ohio, and other states, providing generally for the incorporation of religious societies, in an easy and popular manner, and for the purpose of managing, with more facility and advantage, the temporalities belonging to the church or congregation. Lay corporations are again divided into eleemosynary and civil. An eleemosynary corporation is a private charity, constituted for the perpetual distribution of the alms and bounty of the founder. In this class are ranked hospitals for the relief of poor, sick, and impotent persons, and colleges and academies established for the promotion of learning and piety, and endowed with property, by public and private donations.b Civil corporations are established for a *275 variety of purposes, and they are either public or private. Public corporations are such as are created by the government for political purposes, as counties, cities, towns and villages; they are invested with subordinate legislative powers to be exercised for local purposes connected with the public good, and such powers are subject to the control of the legislature of the state.c

Act of New-Y.ork, April 5th, 1813, ch. 60; of Ohio, February 5th, 1819.

Black's Com. 471. 1 Kyd on Corp. 25--27. i Lord Raym. 6. 8. 1 Ves. 537. 9 Ves. jr. 405. 1 Burr. Rep. 200. Lord Holt, in Philips v. Bury, cited in 2 Term Rep. 353. Dartmouth v. Woodward, 4 Wheaton, 681.

· The People v. Morris, 13 Wendell, 325. They are common in every state. One of the first acts of the general assembly of Connecticut, 1639, was the incorporation of all the towns in the colony, with town privileges for local purposes, such as choosing officers and magistrates for holding local courts, and to provide for durable keeping a registry of deeds and mortgages, and for the maintenance of schools and public worship. The establishment of towns with corporate powers, as local republics, was the original policy throughout New-England, and it had a durable and benign

They may also be empowered to take or hold private property for municipal uses, and such property is invested with the security of other private rights. So, corporate franchises attached to public corporations are legal estates coupled with an interest, and are protected as private property. If the foundation be private, the corporation is private, however extensive the uses may be to which it is devoted by the founder, or by the nature of the institution. A bank, created by the government, for its own uses, and where the stock is exclusively owned by the government, is a public corporation. So, a hospital created and endowed by the government, for general purposes, is a public, and not a private charity. But a bank, whose stock is owned by private persons, is a private corporation, though its object and operations partake of a public nature, and though the government may have become a partner in the association by sharing with the corporators in the stock.b The same thing may be said of insurance, canal, bridge, turnpike, and railroad companies. The uses may, in a certain sense, be called public, but the corporations are private, equally as if the franchises were vested in a single person. A hospital founded by a private benefactor, is, in point of law, a private corporation, though dedicated by its char

effect upon the institutions, and moral and social character of the people. M. De Tocqueville, in his De la Democratie en Amerique, tom. 1. 64.96, appears to have been very much struck with the institution of New-England towns. He considered them as small independent republics, in all matters of local concern, and as forming the principle of the life of American liberty, existing at this day. .

* Angell 4. Ames on Corporations, 3d. edit. 30. These local corporations, as cities and towns, can sue and be sued, and the judicial reports in this country, and especially in the New-England states, abound with cases of suits against towns, in their corporate capacity, for debts and breaches of duty for which they were responsible.

b Marshall, Ch. J., U. S. Bank v. Planters' Bank, 9 Wheaton, 907. It has even been held, that a state bank may be considered a private corporation, though owned entirely by the state. Bank of South Carolina v. Gibbs, 3 M'Cord's Rep. 377.

• Bailey v. Mayor of New-York, 3 Hills Rep. 531.

« ForrigeFortsett »