Corporate lawyer

“ It is true that these stockholders are corporators, and represented by this 'juridical person,' and come under the shadow of its name. But for all the purposes of acting, contracting, and judicial remedy, they can speak, act, and plead, only through their representatives or curators. For the purposes of a suit or controversy, the persons represented by a corporate name can appear only by attorney, appointed by its constitutional organs. ”

“ Once a demand has been made, the decision to block or to terminate the litigation rests solely on the business judgment of the directors. See ibid. Thus, by taking away the shareholder's right to withhold demand under the circumstances where demand is deemed to be futile under state law, a universal-demand rule, in direct contravention of the teachings of Burks, would enlarge the power of directors to control corporate litigation. See 441 U.S., at 478-479, 99 S.Ct., at 1837-1838. ”

“ Surely if any thing is settled beyond all controversy, it is that an individual member of a corporation, or any number of members less than the whole united under the corporate name, and in the corporate character, cannot be sued on a contract of the corporation. ”

“ For although the representatives of a corporation are in form and legal theory the agents of that fictitious person, yet in substance and fact they are the agents of the beneficiaries. A company is justly held liable for the acts of its directors, because in truth the directors are the servants of the shareholders.
A more serious difficulty in imposing liability upon bodies corporate arises from the following consideration. The wrongful acts so attributed by the law to fictitious persons are in reality the acts of their agents. ”

“ It may be admitted that the courts of law could not give any relief to the shareholders of a corporation disfranchised by a judicial sentence in respect to a corporate right. Their modes of proceeding do not provide for the case as they have not for many others. ”

“ I will say, in justice to myself, though it is also in excuse, that if I had known him intimately a few years earlier, I should have found it all but impossible to fool myself. For he had not long been in a position where he could keep wholly detached from the crimes committed for his benefit and by his order, and where he could disclaim responsibility and even knowledge. The great lawyers of the country have been most ingenious in developing corporate law in the direction of making the corporation a complete and secure shield between the beneficiary of a crime and its consequences ”

“ Liability for failure to monitor: The second class of cases in which director liability for inattention is theoretically possible entail circumstances in which a loss eventuates not from a decision but, from unconsidered inaction. Most of the decisions that a corporation, acting through its human agents, makes are, of course, not the subject of director attention. Legally, the board itself will be required only to authorize the most significant corporate acts or transactions: mergers, changes in capital structure, fundamental changes in business, appointment and compensation of the CEO, etc. ”

“ Although named a defendant, it is the real party in interest, the stockholder being at best the nominal plaintiff. The proceeds of the action belong to the corporation and it is bound by the result of the suit. [11] The heart of the action is the corporate claim. If it presents a legal issue, one entitling the corporation to a jury trial under the Seventh Amendment, the right to a jury is not forfeited merely because the stockholder's right to sue must first be adjudicated as an equitable issue triable to the court. ”

“ Thus, unlike two competing cash transactions or transaction in which widely traded securities are offered, the alternatives that plaintiff poses are rich with legitimate, indeed unavoidable, occasions for the exercise of good faith business judgment. Where judgment is inescapably required, all that the law may sensibly ask of corporate directors is that they exercise independent, good faith and attentive judgment, both with respect to the quantum of information necessary or appropriate in the circumstances and with respect to the substantive decision to be made. ”

“ If the act done was within the power of the corporation, it must fall within the law of ratification and confirmation so universally applied to the conduct of those who maintain towards each other the relation of principal and agent. This law should apply with quite as much force to corporate bodies as to natural beings, because, in respect to the latter, the principal may and often does act without the intervention of an agent, and, in case of doubt, recourse may be had to the prinpal himself. ”

“ A corporation having such a controversy, which it is foreseen must end in litigation, and preferring for any reason whatever that this litigation shall take place in a Federal court, in which it can neither sue its real antagonist nor be sued by it, has recourse to a holder of one of its shares, who is a citizen of another State. This stockholder is called into consultation, and is told that his corporation has rights which the directors refuse to enforce or to protect. ”

“ In the case of an executor or trustee, he alone is the legal party-he has the whole legal interest, as is said by this court in the case of The Bank of the United States v. Deveaux. But in the case of a corporation, the legal interest is in the body corporate-the artificial person, which this court for the purposes of this question regards as a common name and description of the natural persons composing the corporation ”

“ The truth is that, with the great increase in corporations in very recent times, and in their extension to nearly all the business transactions of life, it has been found necessary to hold them responsible for acts not strictly within their corporate powers, but done in their corporate name, and by corporation officers who were competent to exercise all the corporate powers. When such acts are not founded on contract, but are arbitrary exercises of power in the nature of torts, or are quasi criminal, the corporation may be held to a pecuniary responsibility for them to the party injured. ”

“ A corporation sues and defends suits by attorney. He is the natural person by whom the personal acts of suing and defending are done, yet nobody ever imagined that he is the party to the suit. The official members are concerned in the suit in their corporate character as well as the private members, and it is as much confounding the distinction between the natural and corporate character, to call the official members parties to the suit, as it is to call the private members parties. ”

“ The subscriber to corporate stock, whose subscription is payable on call of the directors, as required for corporate purposes, is bound by the action of the board in making the call as he is bound by a valid decree of a court against the corporation, although made in his absence, which directs performance of the corporate duty to make the call. ”

“ The complainant's right to follow the corporate funds in the hands of the defendants depends upon its having a valid claim for damages against the vendor corporations. That demand is not only legal in character, but can be settled and determined and the amount thereof ascertained by some appropriate proceeding to which the corporations against which it is made are parties and have an opportunity to be heard. Stockholders cannot be required to represent their corporations in litigation involving such questions and issues. ”

“ In the building up of our civilization we have complicated matters to such an extent that the lawyer is indispensable, almost omnipotent.
Does the layman know anything about his own rights as a citizen? Very little. Upon the simplest things only is he informed. At every turn he finds himself under the necessity of getting help from the lawyer. Great is the corporation—the [100] bank, the railroad, the trust—but the corporation dares not move a step without a lawyer in the pilot-house. ”

“ Every issue of ultra vires or proof of officers' authority in a contract action involves inquiry into internal affairs, but that inquiry is not one which must be relegated to home jurisdiction. The contracts of a corporation may make its liabilities turn on such events as realization of net earnings which submit its internal affairs to scrutiny in order to determine liability and which any court with jurisdiction may adjudicate. ”

“ The historical rule preventing a court of law from entertaining a shareholder's suit on behalf of the corporation is obsolete; it is no longer tenable for a district court, administering both law and equity in the same action, to deny legal remedies to a corporation, merely because the corporation's spokesmen are its shareholders rather than its directors. ”

“ In all the diversity of opinion in the courts of the different states, upon the question how far a liability, imposed upon stockholders in a corporation by the law of the state which creates it, can be pursued in a court held beyond the limits of that state, no case has been found, in which such a liability has been enforced by any court, without a compliance with the conditions applicable to it under the legislative acts and judicial decisions of the state which creates the corporation and imposes the liability. ”

“ The corporate body consists of all the stockholders, and acts by a name comprehending all the stockholders. These stockholders reside all over the United States, but being in their corporate capacity, in which alone they act, a mere legal entity, invisible, inaudible, incorporeal, they act by agents. It may well be doubted, and is doubted, whether the residence of those agents can fix the residence of the corporation,' and the statute of limitations prevailed against the bank. ”

“ Accident Insurance Companies have enormous legal plants as efficiently organized as factories for handling damage suits and against whom is opposed the inexperienced lawyer of the individual citizen.
Furthermore, the corporation, though composed, in reality, of individuals, is less personal than any one of its members. It is a client without keen emotions, without too distracting hopes, fears, or suspicions. Law is an exacting science, arduous and complex. The lawyer, to do his best, should work quietly, disturbed as little as possible by the human interests at stake. ”

“ It is well settled that, when it is in the interest of the administration of justice to do so, courts may and will ignore the fiction that a corporation is a legal being apart from the stockholders, and will consider its acts as the acts of its constituent members ”

“ Said the chief justice: 'The individual members of a corporation, whether they should all join or each act severally, have no right or power to intermeddle with the property or concerns of the bank, or call any officer, agent, or servant to account, or discharge them from any liability. Should all the stockholders join in a power of attorney to any one, he could not take possession of any real or personal estate, any security or chose in action ”

“ This is one case where a partnership has an advantage over a corporation. A group of lawyers may form a partnership and do business under a partnership name. But a group of lawyers seldom or never form corporations to practice law. The reason for this is that the corporation is a separate entity, and the corporation as such cannot pass a bar examination and be admitted to the bar. In fact, in a few States, there are statutes prohibiting a corporation from practicing law. ”

“ Unsurprisingly, these advocates’ corporate clients benefit from their success. The past few decades are replete with examples of the Court granting review to corporate-friendly petitions that it would have likely passed over if not for an expert advocate’s name on the industry-side brief.
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These elite lawyers’ “capture” of the Supreme Court docket, as Professor Lazarus has put it, has real consequences for workers, consumers, and other plaintiffs who have been hurt by corporations, as well as for criminal defendants. ”

“ A corporation, like an individual, may refrain from embarking in litigation to enforce even a clear right of action, if litigation is deemed inadvisable; and it is immaterial, in this respect, whether the right of action arises at common law or under a statute or under a constitutional provision. Nor do I know of any reason why the disadvantages which may flow from 'antagonizing public officials' may not properly be considered by directors and managing officers of a corporation in determining whether to embark in litigation. ”

“ Oakland, 104 U.S. 461, in speaking of this perfunctory effort to induce the trustees of the corporation to act, it is said: 'He (the plaintiff) must make an earnest, not a simulated, effort with the managing body of the corporation to induce remedial action on their part, and this must be made apparent to the court. If time permits or has permitted, he must show, if he fails with the directors, that he has made an honest effort to obtain action by the stockholders, as a body, in the matter of which he complains. ”

“ That is why a power of attorney is generally given; not that the law requires it, but that the agent may have evidence of his agency which will satisfy third persons that he is really the agent. A corporation would not transfer stock without a written power presented to it ”

“ Where a shareholder of a corporation is called upon to respond to a liability as such, and where a party has contracted with a corporation, and is sued upon the contract, neither is permitted to deny the existence or the legal validity of such corporation. ”