MORRISON'S

CORPORATION LAW

CHAPTER 1.

INTRODUCTORY.

Definition.

A corporation is an artificial being, invisible, intangible, and existing only in contemplation of law; and it possesses only those properties and powers which are conferred upon it by its creator. Its existence depends upon a legislative act, to which it either mediately or immediately owes its vitality. It is a collection of individuals united into one body, having perpetual succession under the corporate name, and vested by the policy of the law with the capacity to transact certain kinds of business like a natural person; and such a union can only be effected under a grant of privileges from the sovereign power of the state.

Properties of a Corporation.

Among the properties conferred upon a corporation, in order to effect the object of its creation, the most important are immortality and individuality; properties, by means of which, a perpetual succession of many persons is considered as the same, and may act as a single individual. The immortality of a corporation means no more than a continued succession of members during the period allotted for the existence of the corporation.

Separate Existence of a Corporation.

The powers and franchises with which a corporation aggregate is endowed, are regarded as subsisting in the corporation itself, as distinctly as if it were a real personage. The members individually are lost in the corporate existence, and it is the legal being which acts and transacts business; and this legal being, or corporate body, is separate and distinct in its rights and obligations from the individuals who compose it. An individual corporator may sue his corporation, and the corporation may sue a corporator.

In What Sense Deemed "Persons."

In certain respects, and for certain purposes, corporations are deemed "persons." The general rule of construction is, that corporations are entitled to the rights or the remedies conferred by a statute upon "persons" if they fall within the general reason and design of the act. They are deemed "persons" not only for civil purposes, but also within the purview of penal statutes. A corporation cannot be deemed a moral agent, and, like a natural person, be subjected to personal suffering. Malice and willfulness cannot be predicated of a corporation, though they may be of its members.

Purpose and Use.

Corporations are created in order to gain the united aid of many persons for the successful promotion of some design for the public good. It is to accomplish this object, that the legislature bestows the charter and properties of individuality on a collective and changing body of men.

Public and Private Corporations Distinguished.

Public corporations are generally esteemed such as are created for political purposes only, with powers to be exercised for the public good. But strictly speaking, public corporations are such only as are founded by the government for public purposes, where the whole interests belong also to the government. Corporations not created for political purposes, or the whole interests in which do not belong to the government creating them, are private. A division of corporations into three classes, is as follows: 1. Public Municipal Corporations, the object of which is to promote the public interests; 2. Public Utility Corporations, technically private, but of a quasi public character, having in view some public enterprise in which the public interests are involved; and over which the public, the government, may to a certain extent regulate and control; and 3. Corporations strictly private.

Quasi Corporations.

There are many instances, in the law, of collective bodies of men, coming under one general description, endowed with corporate capacity in some particulars expressed, but who have, in no respect, the capacities incident to a corporation. These bodies are usually denominated quasi corporations.

Municipal Corporations.

At common law, a corporation aggregate for munici

pal purposes, is investing the people of a place with the local government thereof; instances of which are, incorporated villages, towns and cities. Generally speaking, municipal corporations are created in this country at the will of the legislature, for the purpose of aiding in the administration of the government of the state, but chiefly to administer the local affairs of the city, town or village, which is incorporated.

What Bodies Are Not Corporations.

Companies or societies not expressly sanctioned by the legislature, pursuant to some special or general law, are usually deemed nothing more than ordinary partnerships. Many associations are now operated as trust estates, commonly known as "Common as "Common Law Corporations, "Declarations of Trust," "Common Law Companies,'

Etc.

Power to Create Corporations.

The sovereign authority only is competent to create a corporation. Formerly, in England, both public and private corporations were created by royal prerogative, without the intervention of parliament; but the usual mode in which corporations are now called into being, is by authority of parliament; and, in the United States, they can only be created by authority of the legislature. A corporation cannot be constituted by agreement of parties.

Corporations by Royal Charter.

Most of the corporations that arose in England during the middle ages were created by Royal Charter, in the form of letters patent, under the great seal; and a few existing corporations in this country owe their origin to the English Crown under the colony administration.