Corporation law

“ In corporations existing at the common law and by charter, there are great diversities both of powers and organization. In some corporations the whole powers rest in a select body, or in select bodies, with powers to perpetuate their own corporate existence, by filling up vacancies in their own body; and such body or bodies constitute the corporation itself, and the meetings and acts done thereat are the meetings and acts of the corporation itself. In short, they constitute the corporation, so far as it has life or organization exclusively. ”

“ If the conscience of one state became enlightened and a strict corporation law was enacted, the result was simply to drive the irregular concerns into some other state which was willing to sell its privileges for the small fee of incorporation, and ask no questions. As might have been expected, every variety of practice existed in the forty-eight jurisdictions in which corporations might be located. ”

“ If they act as a corporate body, then the whole law applies to them as to other corporate bodies. If they act as individuals, then we have a corporation which never acts in its corporate character, except in the instances of electing its directors, or instructing them. The corporation possesses many important powers, and is, as a corporation, to perform many important acts, scarcely one of which is to be performed in a corporate character. They are all to be performed by agents, acting as individuals, under general powers conferred by the charter. ”

“ A corporation is the creature of the law, and none of its powers are original. They are precisely what the incorporating act has made them, and can only be exerted in the manner which that act authorizes. ”

“ That corporations created by statute must depend for their powers and the mode of exercising them, upon the true construction of the statute. A corporation can have no legal existence out of the sovereignty by which it is created; as it exists only in contemplation of law, and by force of the law: and that when that law ceases to operate, and is no longer obligatory, the corporation can have no existence. ”

“ THEORY OF LEGISLATION RECOMMENDED The history of corporations, as well as the logic of the case, shows that there are possible two general theories as to the State's duty in creating corporations: first, the old theory that, being creatures of the State, they should be guaranteed by it to the public in all particulars of responsibility and management; and the modern quite opposite theory that, in the absence of fraud in its organization or government, an ordinary business corporation should be allowed to do anything that an individual may do. ”

“ The general rule is that corporations have only such powers as are granted, and the powers incidental thereto; and, in arriving at a conclusion as to the powers of this corporation, the applicable provisions of the title under which it was organized must be considered,-legislation which will be found to be in harmony with the common law. ”

“ And it is established by the decisions of this court that, within the meaning of this act, a corporation cannot be considered a citizen, an inhabitant, or a resident of a state in which it has not been incorporated; and, consequently, that a corporation incorporated in a state of the Union cannot be compelled to answer to a civil suit, at law, or in equity, in a circuit court of the United States, held in another state, even if the corporation has a usual place of business in that state. ”

“ In what way the transfer of the stock of a corporation shall be made and evidenced is a matter entirely within the govermental power of the state that creates the corporation, the state taking care that such power be not so exerted as to violate any right secured by the supreme law of the land. ”

“ Fifty years ago, the great majority of business operations were conducted either by individuals or by partnerships. To-day, especially in conducting large business [Pg 122] enterprises, corporations have replaced individuals and partnerships. Although (as we shall see later in the chapter on corporations) in law a corporation is deemed a separate, legal entity, distinct from the stockholders, in actual practice we know that there is no such distinct physical being as a corporation. It follows, therefore, that every act performed by a corporation must be performed through an agent. ”

“ From the nature of things, the artificial person called a corporation, must be created, before it can be capable of taking anything. When, therefore, a charter is granted, and it brings the corporation into existence, without any act of the natural persons who compose it, and gives such corporation any privileges, franchises or property, the law deems the corporation to be first brought into existence, and then clothes it with the granted liberties and property. ”

“ I see no reason to distinguish one Clause of the Eighth Amendment from another for purposes of incorporation, and would hold that the Excessive Fines Clause also applies to the States.
In the words of Chief Justice Marshall, a corporation is "an artificial being, nvisible, intangible, and existing only in contemplation of law." ”

“ Corporations created by the several states are necessary to the conduct of the business of the country; and it is a startling proposition that a state may permit a corporation to do business within its limits, and by that act acquire the right to subject the corporation to regulations that may be inconsistent with the supreme law of the land. ”

“ The argument that the corporation, being the creature of the partners, was not a bona fide purchaser, and must be considered as having taken the property subject to all partnership equities against it, is not a sound one. The constitution of the corporation, and the transfer to it of the property, were authorized by law, and were intended to settle and extinguish these equities, and to place the concern on a new footing; and the very parties entitled to equities were the ones who organized the corporation, and made the conveyance to it. ”

“ It may not be easy in all such cases to distinguish between the purpose to create a new corporation, which shall owe its existence to the law or statute under consideration, and the intent to enable the corporation already in existence, under laws of another state, to exercise its functions in the state where it is so received. ”

“ The profits of a solvent going corporation, whether current profits or those reinvested in the business, are owned absolutely by the owners of the corporation and are subject to their disposition and control, except where the law imposes restrictions. Oftentimes, the stockholders themselves impose restrictions by incorporating restrictive provisions in the charter or by-laws of the corporation. ”

“ The shareholders of the corporation, including, if there is one, its parent corporation, are not responsible This is a conscious decision made by the law of every state to encourage business in the corporate form. ”

“ One might almost say that they are a device under which parties make their own corporation code. Business concerns so organized have come to occupy a large field in industry and in finance. At least two substantial text-books have been written on the law concerning such organizations and dealing with their advantages for general business purposes. ”

“ Inanimate objects are sometimes parties in litigation. A ship has a legal personality, a fiction found useful for maritime purposes. [2] The corporation sole — a creature of ecclesiastical law — is an acceptable adversary, and large fortunes ride on its cases. [3] The ordinary corporation is a "person" for purposes of the adjudicatory processes, [p743] whether it represents proprietary, spiritual, aesthetic, or charitable causes. [4]
So it should be as respects valleys, alpine meadows, rivers, lakes, estuaries, beaches, ridges, groves of trees, swampland, or even air that feels the destructive pressures of modern technology and modern life. ”

“ Again-it is said that corporations aggregate in this country are without the capacity of contracting, except through guardians, trustees, or curators, and that in this respect they are like minors and lunatics; yet nothing is more certain than that in all the corporations with which we are acquainted in this country, the ultimate power of making by-laws for the government of the corporation, and of otherwise controlling the action of the official members, resides in the body of the members, and is frequently exercised by them ”

“ But as the powers of corporations, created by legislative act, are limited to such as the act expressly confers, and the enumeration of these implies the exclusion of all others, it follows that unless express permission be given to do so, it is not within the general powers of a corporation to purchase the stock of other corporations for the purpose of controlling their management. ”

“ The differences relied upon to justify the classification are, for that purpose, without substance. The provision for paying a portion of the profits to members or, if so determined, to nonmembers, based upon the amounts of their sales to or purchases from the corporation, is a device which, without special statutory authority, may be and often is resorted to by ordinary corporations for the purpose of securing business. ”

“ The legislature shall pass general laws whereby any number of persons associated for mining, manufacturing, insuring, or other purpose useful to the public, excepting banks of circulation and the construction of works of internal improvement, may become a corporation, on complying with the terms and conditions thereby prescribed; and no special act incorporating or granting peculiar privileges to any joint-stock company or association, not having in view the issuing of bills to circulate as money or the construction of some work of internal improvement, shall be passed. ”

“ Ct. 403, the right of a state to tax the franchise or privilege of being a corporation as personal property his been repeatedly recognized by this court, and this whether the corporation be domestic or a foreign corporation doing business by its permission within the state. But a state cannot exclude from its limits a corporation engaged in interstate or foreign commerce, or a corporation in the employment of the general government, either directly in terms or indirectly by the imposition of inadmissible conditions. ”

“ To permit every lawless capitalist, every law-defying corporation, to take any action, no matter how iniquitous, in the effort to secure an improper profit and to build up privilege, would be ruinous to the Republic and would mark the abandonment of the effort to secure in the industrial world the spirit of democratic fair dealing. ”

“ Equally implied, in our judgment, is the condition that the corporation shall be subject to such reasonable regulations, in respect to the general conduct of its affairs, as the legislature may, from time to time, prescribe, which do not materially interfere with or obstruct the substantial enjoyment of the privileges the state has granted, and serve only to secure the ends for which the corporation was created. ”

“ There is nothing in the nature of the corporations or associations exempted in the present act, or in their method of doing business, which can be claimed to be of a public or benevolent nature. They differ in no essential characteristic in their business from 'all other corporations, companies, or associations doing business for profit in the United States.' Section 32, Law of 1894. ”

“ Article 575 provided that every private corporation, as such, has power 'to enter into any obligation or contract essential to the transaction of its authorized business,' and article 589, that 'no corporation created under the provisions of this title shall employ its stock, means, assets, or other property, directly or indirectly, for any other purpose whatever than to accomplish the legitimate objects of its creation.' Sayles' Civil St. ”

“ Within the latter denomination all corporations are included, which do not strictly belong to the former. There is no doubt, as to public corporations, which exist only for public purposes, that the legislature may change, modify, enlarge, and restrain them; with this limitation, however, that property, held by such corporation, shall still be secured for the use of those, for whom, and at whose expense it has been acquired. ”

“ The object of the act appeals most strongly to the sympathies of all; but in providing the means for effectuating that object, it enacts provisions which, in my judgment, are unwarranted by the Constitution. Without affirming that the act creates a perfect corporation, there can be no doubt that it confers upon the board of managers of the institution which it is intended to found corporate powers and franchises of a well-defined character, which constitute them what is known as a quasi corporation. ”

“ I have no doubt, whatsoever, that in a legal and technical sense, a corporation is a person; and that under that denomination, it may be included within the provisions of a statute, where the language and provisions and objects of the statute equally apply to corporations and to private persons. ”