Corporation sole

“ The only artificial persons are corporations. Corporations are either aggregate or sole.
This, I take it, would be an orthodox beginning for a chapter on the English Law of Persons, and such it would have been at any time since the days of Sir Edward Coke. [1] It makes use, however, of one very odd term which seems to approach self-contradiction, namely, the term "corporation sole", and the question may be raised, and indeed has been raised, whether our corporation sole is a person, and whether we do well in endeavouring to co-ordinate it with the corporation aggregate and the individual man. ”

“ In England we are within a measurable distance of the statement that the only persons known to our law are men and certain organized groups of men which are known as corporations aggregate. Could we make that statement, then we might discuss the question whether the organized group of men has not a will of its own-a real, not a fictitious, will of its own-which is really distinct from the several wills of its members. As it is, however, the corporation sole stops, or seems to stop, the way. It prejudices us in favour of the Fiction Theory. ”

“ If our corporation sole really were an artificial person created by the policy of man we ought to marvel at its incompetence. Unless custom or statute aids it, it cannot (so we are told) own a chattel, not even a chattel real. [64] A different and an equally inelegant device was adopted to provide an owning "subject" for the ornaments of the church and the minister thereof-adopted at the end of the Middle Ages by lawyers who held themselves debarred by the theory of corporations from frankly saying that the body of parishioners is a corporation aggregate. ”

“ 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. ”

“ It cannot even hold its glebe tenaciously enough to prevent the freehold falling into abeyance whenever a parson dies.
When we turn from this mere ghost of a fiction to a true corporation, a corporation aggregate, surely the main phenomenon that requires explanation, that sets us talking of personality and, it may be, of fictitious personality, is this, that we can conceive and do conceive that legal transactions, or acts in the law, can take place and do often take place between the corporation of the one part and some or all of the corporators of the other part. ”

“ Its creation (except where the corporation is sole) is the investing of two or more persons with the capacity to act as a single individual, with a common name, and the privilege of succession in its members without dissolution, and with a limited individual liability. The right and privilege, or the franchise, as it may be termed, of being a corporation, is of great value to its members, and is considered as property separate and distinct from the property which the corporation itself may acquire. ”

“ It cannot escape notice, that this rule, if it be one, would apply to almost all corporations aggregate, and would abolish the distinction which has been taken between those which act by an individual, and those which act by an aggregate of persons. The first partakes of the qualities of a sole corporation, the last of a corporation aggregate. ”

“ 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. ”

“ When General Ward had finished reading, he lifted up his glasses and said: "Well, that's it, boys; John has come to his turn of the road. Here's the rest. It says: 'The corporation in question is practically controlled by one man, the man who has placed the information above mentioned in the hands of the government. It is a corporation owning no physical property whatever, and is organized as a rebate hopper, if one may so style it. ”

“ In America there are very few corporations which have private visitors, and, in the absence of such, the state is the visitor of all corporations.'
In no case or authority that we have been able to find has there been a definition of this right which would include the private right of the shareholder to have an examination of the business in which he is interested, and the right of discovery of the methods and means by which the agents of the corporation are conducting its affairs. ”

“ It is not denied that in the language of Savigny, cited by the learned counsel, 'a corporation consists of the whole formed of its members,' but it is not always true that the will of a bare numerical majority of the members is the will of the corporation, and has the disposal of, and is invested with all the rights of the corporation. ”

“ The stock of the company may be appropriated to objects animate or inanimate. A slave, an alien, an enemy, or even a dead man, might be a shareholder; or the shares might be dedicated to the repairs of a house, to the improvement of land, or to the use of persons unborn. But it would be a frivolous objection to a suit against the corporation that some of its shares belonged to nobody. When shares in one corporation are held by another corporation, they belong to the government of the corporation which is the shareholder, a trustee for the corporate uses. ”

“ The language is general, so general that it includes everything, not excepting good will, dividend-earning power, and the like, for they are 'capable of private ownership.' They belong to the corporation. There is no good will in a share of stock over and above the good will which belongs to the corporation, and, if the corporation sells and conveys all that it possesses 'capable of private ownership,' it sells and conveys its good will, and there is nothing left of good will or anything else belonging to the stockholders. ”

“ So, with respect to the present bank, suits brought by or against it are not understood to be brought by or against the United States. The government, by becoming a corporator, lays down its sovereignty, so far as respects the transactions of the corporation; and exercises no power or privilege, which is not derived from the charter. [189] The reasoning admits of further illustration. A corporation is itself, in legal contemplation, an artificial person, having a distinct and independent existence from that of the persons composing it. ”

“ But it is said, that if the doctrine contended for be not true, then every grant to a corporation becomes, ipso facto, a monopoly or exclusive privilege. The grant of a bank, or of an insurance company, or of a manufacturing company, becomes a monopoly, and excludes all injurious competition. ”

“ We hear much about quasi-public corporations, and public opinion has gone a long way in taking away from the owner of public-service corporations the right to manage his own property, to name his own rates or prices, to decide about his methods, and has imposed on him the responsibility of providing safe and adequate public service from his private means, but so far has exerted little influence upon the men who have to make the quasi-public corporation of use to the public. ”

“ A corporation without shareholders, without officers to manage its business, without property with which to do business, and without the right lawfully to do business, is dissolved by the operation of the law which brings this condition into existence. ”

“ An artificial person of this sort is now recognized under most systems of law. It can be formed, as a rule, only with the consent of the sovereign power, and is described as a 'societe,' or 'compagnie,' 'anonyme,' an 'Actiengesellschaft,' or 'joint-stock company limited.' A less pure form of such a corporation is a company the shareholders in which incur an unlimited personal liability. ”

“ 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. ”

“ The great carrying trade by land is governed by substantially the same principle; being in the hands of corporate associations, whose members are not personally liable for acts of the employees, but risk only the amount of their capital stock in the corporation. ”

“ When a business corporation, instituted for the purposes of gain or private interest, is dissolved, the modern doctrine is that its property, after payment of its debts, equitably belongs to its stockholders. ”

“ 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. ”

“ Corporations no less than individuals of course have rights which should be scrupulously respected by both our Federal and State legislators. But one defect in corporation legislation by Congress, as well as the States, has often been that it failed to make a sufficient distinction between what may be called private and public corporations. ”

“ 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 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. ”

“ Business of all sorts is now to a great extent carried on in the name of corporations, in order that the proprietors may escape personal responsibility. How can the individual, who is personally responsible for his contracts, successfully compete with a corporation run by persons who incur no such responsibility? ”

“ That the vast and increasing proportion of the active business of modern life which is done by corporations should call into exercise the beneficent powers and flexible methods of courts of equity, is neither to be wondered at nor regretted; and this is especially true of controversies growing out of the relations between the stockholder and the corporation of which he is a member. ”

“ 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. ”

“ By those who affirm this doctrine it is indispensable that they should show as inherent in, and consistent with, the constitution of such corporations, the attributes and qualities to which proceedings like the present are calculated to apply, and with which they can, by any rational or logical comprehension, be made applicable. The metamorphosis which would transmute an aggregate corporation into a natural person, must necessarily transfuse into this new creation the capabilities and qualities of the being into which it is changed. ”

“ To make such a company a corporation of another state, the language used must imply creation, or adoption in such form as to confer the power usually exercised over corporations by the state, or by the legislature, and such allegiance as a state corporation owes to its creator. ”

“ Again, all these government corporations differ from incorporated business companies. In forming a town or city, many persons are brought into the corporation against their wishes or consent; because, in governments, all who live within certain prescribed bounds must come under the same laws; but of an incorporated business association, as of a common business partnership, none become members but by their own act or choice. ”

“ That gives us a right to take over these corporations through state action. The only preliminary is to elect state administrations which will represent us, instead of representing the corporations. Also, most state constitutions contain the provision that "no corporation shall issue its stocks or bonds, except for money, labor, or property actually received." ”