INTRODUCTION. CONTENTS. 9 PART IV, DIVISION I, CIVIL CODE. TITLE I. General Provisions applicable to all Corporations.. 35 ERRATA. On page 12, 2d line from foot, instead of "powers," read "persons." On page 27, 6th line from foot, instead of "beyond," read "to." On page 29, instead of "Benjamin B.," read "Benjamin R." INTRODUCTION. HISTORY OF PRIVATE CORPORATIONS. THE extension of corporate effort in all directions, the immense results achieved by the combination of effort and capital, and the facility of acquiring corporate privileges and immunities, are conspicuous features of modern life. To the observer of the present and the historian of the future, who would fully understand and estimate the influences that act upon, and the forces that direct society at the present day, the part played by corporate enterprise must be considered as a very important element in our modern social and business life. The growth and ramification of corporate effort in the United States are truly marvelous; nothing is too trifling for its object, nor anything too vast for its undertaking. From the manufacture and sale of a simple attachment to a lock-spring to the mighty enterprise of uniting the waters of two oceans, men are ready to combine their efforts and capital, under the protection and powers of a corporation. Interests and privileges, that were formerly confined to a select limited number, are now so generally extended, that there are but few business men who are not in some way interested in a corporate undertaking, and among whose assets may not be found some kind of an interest in a corporation, solid or chimerical. It is obvious, therefore, how necessary it is to have the existence and operations of these corporate bodies controlled and limited by specific laws defining their rights, duties and liabilities, and adapted to the intimate relations which they have to the general public, and the enlarged scope of their efforts. And it is equally obvious how important such a branch of the law must be in order to meet these requirements, and provide for the new relations and exigencies arising from the great increase of corporate privileges. It is on this account that the law of private corporations has, of late, taken a conspicuous place in our statutes and decisions. The weightiest matters that come before our tribunals are mostly connected in some way or another with corporate rights or relations. Our courts are continually invoked to .apply the preventive or remedial measures of the law, as between the stockholders and the corporation, and between the latter and the public. It is only in modern times that corporations for individual profit have come into prominence. There must have been combinations of persons uniting their skill and capital for their common advantage, in every country where there were any commercial transactions or enterprise; but obviously to a very limited extent, when compared with the prodigious activity of the combined effort everywhere visible at the present day. It cannot, however, be maintained that such bodies were generally invested with the powers and privileges of a corporation, in the true sense. They were more like trading associations in the nature of partnerships-societates, as the Romans termed them. That there were bodies possessed of the attributes of corporations, to a considerable extent, in Greek and Roman times, must be admitted. It is easy to understand that a civilized society would very soon discover the advantages and facilities to be obtained by conferring the powers of a corporation upon a number of individuals. In fact, the constitution of archaic society, founded as it was on the community system, would naturally suggest the idea and the model. But the interposition and sanction of law were needed to enable individuals voluntarily to form these artificial bodies, and to acquire rights and powers that could be exercised in common, and transmitted intact, without reference to the changes among the individuals composing the body. Accordingly, we find the existence of such bodies noticed early in the history of Rome, and provisions made regarding them in Roman law, which manifestly gave to our early English law its principles in reference to the powers, capac ities, and incapacities of corporations. It is supposed that such bodies were known in the time of the Twelve Tables, as that early code allowed private companies to make their own by-laws, provided they were not inconsistent with the public law." But it is not certain that these were really corporations; it is probable that they were merely trading or commercial companies. Under the Roman system, corporate rights were not easily acquired or freely conferred; they were looked upon as concessions or privileges, bestowed by the sovereign power, gratia specialis. Every corporation that was not ordained by a decree of the senate or of the emperor was illicit.(2) Such as were regularly and duly organized were termed collegia licita, and if they abused their privileges, or deviated from the purpose expressed in their charter, they were deemed illicita, and considered dangerous to the welfare of the State. From the period of the Twelve Tables down to imperial times, many laws were passed against all illicit or unauthorized companies.(3) The Roman mind was easily led to a conception of a corporation as an entity, as a distinct existence, separate and apart from the individuals composing it. The idea attached to the word persona, in their admirable legal classification, enabled them readily to include a corporation under the term. A late writer says: "Whoever or whatever was capable of having, and being subject to, rights was a persona........ The law clothed certain abstract conceptions with an existence, and attached to them the capability of having and being subject to rights. The law, for instance, spoke of the State as a persona. It was treated as being capable of having rights, and of being subject to them.... ....So a corporation or an ecclesiastical institution, was a persona, quite apart from the individual persona, who formed the one and administered the other." (4) The true idea of a corporation was derived from the municipia established by the Romans, which was a charac (1) 1 Kent, 268. (3) Taylor's Elem. Civ. Law, 567. | (2) Dig. 47, 22–3 (4) Sandars' Introd. to Insts. p. 26. The word corpus denotes any corporation which is governed by particular laws given thereunto; but a community is a more general term, and may comprehend the whole State of the country, as well as of a city, town, or ville. Ayliffe, 197. |