CHAPTER XI. OF CORPORATIONS. I.-ROMAN LAW. corpora A CORPORATION consists of a number of individuals united Nature of by public authority in such a manner that they and their tions. successors constitute but one person in law, with rights and liabilities distinct from those of its individual members. Cities, colleges, hospitals, scientific and trading associations, and societies for other public purposes, may be so incorporated. Among the Romans every corporation was constituted by How cona law, by a decree of the senate, or by an imperial constitu- stituted. tion. Three members at least were necessary to form the corporation, but its existence might be continued by one; and it subsisted as an abstract legal person though all its original members were changed.1 powers and The powers and privileges of corporations vary according Corporate to the nature of their original constitution. They are gener- privileges. ally authorised to hold property, and to sue and be sued, in the corporate name; to choose syndics or other office-bearers to manage the business of the body; to elect new members from time to time; and to make by-laws for the administration of their own affairs, so far as not contrary to the law of the land or their own special constitution. There must always be some person authorised to represent the corporation in its external relations.2 1 D. 3. 4. D. 47. 22. D. 50. 16. 55. 2 Valuable information on corpo rations will be found in Savigny, Sys- Voting at corporate meetings. All corporate property and effects belong to the corporate body as a separate person in law, and not to the particular members of which it is composed; and the same principle applies to debts due to the corporation. On the other hand, the individual members are not answerable either in their persons or property for the corporate debts, so that if there are no corporate effects against which execution can be directed, the creditors of the corporation must go unpaid: "Si quid universitati debetur, singulis non debetur; nec quod debet universitas, singuli debent.”—D. 3. 4. 7. 1. The mode of voting at general meetings of the corporate body depends, in the first place, on the original constitution; and when it makes no provision regarding this matter, the will of the majority, at a corporate assembly duly constituted, is the will of the corporation, and binds the minority as well as those who are absent. Some writers on the Roman law are of opinion, that when the constitution lays down no rule, the decision of the majority is only binding when two-thirds of the members are present at the meeting; but the texts on which they rely refer only to the curice in the Roman municipia, and are not sufficient to establish any general rule applicable to all corporate bodies.1 The principle adopted in England, when the act of incorporation contains nothing to the contrary, is, "that a corporation acts by the majority, or that the will of the majority is the will of the corporation, and binds the minority. Hence the act of the major part of such corporators as are present at a meeting of the corporators corporately assembled, is, in general, the act of the whole corporation." But if the act of incorporation, or the special constitution, fix what shall be necessary to constitute a corporate assembly, whether as regards the number of members present or otherwise, this must be strictly attended to. Of this we have a good illustration in the English Municipal Corporations Act (5 & 6 Will. IV. c. 76, s. 69), which provides that all questions relating to general business shall be decided by a majority of the members present at any regular 2 Grant on Corporations, p. 68. Att. Gen. v. Davy, 2 Ak. 212. 1 Maynz, § 108. Mackeldey, § 148 and note. meeting, provided the whole number present be not less than one third part of the whole council. corporation may termi A corporation may come to an end by the expiry of the How a term fixed by the constitution, when it is established for a limited period; by the death of all the members, when it nate. has for its object the personal interests of the individuals composing it; and by any act of the legislature declaring it dissolved. What becomes of the property of a dissolved corporation, is a question which has led to some discussion. No positive rule can be laid down on this subject, and it may receive different solutions according to the object for which the corporation was established. Where it was instituted solely for the public benefit, such property is usually appropriated by the state.1 corporate Besides the corporations where several individuals are Special united into one body, and which in England are called cor- bodies. porations aggregate, the Romans recognised another class of artificial persons as capable of rights and obligations, bearing some resemblance to the corporation sole of the English law. Of this description were the state itself; the prince, in so far as he was regarded as the depositary of sovereign power; every public office, considered with reference to the rights and duties attached to it; the public treasury or fisc; and, finally, the inheritance of a deceased person (hæreditas jacens), so long as it was not taken up by any one as heir. treasury. The public treasury, as distinguished from the private for- The public tune of the prince, was called the fisc,2 and was always considered in law as an ideal person. To the fisc belonged not only all the ordinary and extraordinary revenues of the state, including all property and effects which had no owner (bona vacantia), but many other prerogatives and privileges which need not be enumerated here. In disputes between the subject and the fisc, it was a general rule, in all cases of doubt, to decide against the fisc.3 1 Mackeldey, § 148. 2 The treasury of the Roman people was called ærarium, that of the prince fiscus, which put an end to the first by absorbing it. 3 D. 49. 14. 10. Compare, however, N. 161, ch. 2, and Edict. Justin. 4, c. 2, s. 1. Aggregate or sole. Common seal. Corporation cannot sue II.-ENGLISH LAW. In England corporations may be created by Act of Parliament or royal charter, and some exist by prescription. By the law of England corporations are divided into aggregate and sole. Corporations aggregate consist of a number of persons united into one society, so as to keep up a perpetual succession of members-such as the mayor, aldermen, and burgesses for the local administration of a borough, the head and fellows of a college, and the dean and chapter of a cathedral church. Corporations sole consist of one person only, and his successors in some particular station, who are incorporated by law, so as to preserve the powers and rights which belong to the office in perpetuity; and of this the sovereign, a bishop, or a parson-each in his official capacity -may be taken as an example. The idea of a corporation sole has been claimed as peculiar to English law, but the novelty consists only in the name; and it has been justly remarked that, "as so little of the law of corporations in general applies to corporations sole, it might have been better to have given them some other denomination.2 All contracts of importance entered into by English corporations must be made under the common seal of the body corporate, and in the corporate name; but trifling matters of business, and ordinary contracts of constant recurrence, such as the hiring of servants and the like, are binding on the corporation without the employment of their common seal.3 By the common law of England the creditor of a corporacreditor tion can have no remedy except upon the funds or property individuals. of the corporation, there being no right under a judgment execution against the indiUnder the Acts of Parlia against a corporation to sue out ment incorporating railway companies, the capital stock and 1 Stephen's Com., 4th ed., vol. iii. p. 125. 2 Dr Wooddeson, Vin. Lect., vol. i. pp. 471, 472. 3 Addison on Contracts, 5th ed., 701-707. Smith's Compendium of Mercantile Law, 6th ed., p. 113. property of the corporation are alone liable for the debts and engagements of the company, the personal liability of the shareholders being limited to the amount of their shares not paid up. Companies may be incorporated for a variety of purposes under the Joint Stock Companies Act of 1862, either with or without limited liability. Where the liability of the members is unlimited, they are liable to the same extent as if the company had not been incorporated. But the liability of the members may be limited either to the amount, if any, unpaid on the shares respectively held by them, or to such amount as the members may respectively undertake to contribute to the assets of the company in the event of its being wound up.2 Trading corporations may be dissolved on their bankruptcy under the Joint Stock Companies Act. III-SCOTTISH LAW. The corporation law of Scotland has a general resemblance to that of England, both being originally derived from the civil law, and modified by rules to suit the form of government and state of society in each of these countries; but in some details and matters of form the law of Scotland has peculiarities which distinguish it from that of England. cause. In Scotland the charters of most royal burghs confer upon Seals of them a power of constituting subordinate corporations by a seal of cause; that is, a writ in the form of a charter issued under the burgh seal. A seal of cause so issued erects the grantees into a corporation, and gives them power to sue and be sued, with every other privilege necessarily incident to a corporate body, whether expressed in the grant or not; such as the power of electing officers, imposing fines, making bylaws and the like. Similar powers have been exercised by lords of regality and barony, who had authority under their rights from the crown to erect corporations within their 125 & 26 Vict. c. 89, s. 6. 2 Ibid. s. 7-10. Smith's Mercantile Law, 6th ed., p. 111. |