*9. It does not alter the character of a private corporation, that the state or the United States own a portion of the stock.8 can be said to have been at all remunerative, in Great Britain the whole amount of their loan and preference stock, secured virtually by way of mortgage, has produced, upon an average, more than five per cent, and the ordinary stock has produced an average dividend of more than three per cent; and in France railways have proved still more productive, making average dividends throughout the empire, for the year 1857, of nine per cent upon the whole investment, some as high as sixteen per cent, and one, the Lyons and Marseilles line, twenty-three per cent. It is difficult to account for the difference in results, without suspecting something wrong somewhere. Since the former edition of this work, considerable advance has been made in railway enterprise throughout the world. Railways have become so nearly a military necessity, in order to enable any nation of considerable power and prominence in relative national position to maintain its due weight and importance, that very extensive, and in some instances vast works of that kind have been accomplished, mainly upon that ground. The experience of the national government during the late civil war has removed all question of the right of that government to charter and construct, or aid in the construction of extensive and independent lines throughout the country for military and mail purposes alone. It is stated that the present length of railway line in the United States is about 32,000 miles, at an average cost of $ 40,000 per mile, equal to $1,280,000,000 in all, and there is every reason to believe the Atlantic and Pacific coasts will speedily be united by railway. The advance in Great Britain and Ireland has been very great since the first edition of this work, but probably not in the same proportion as here.

The number of miles of railway now in operation in France is about 8,000, at a cost of nearly $ 1,300,000,000, and producing, according to the late returns of the Minister of Public Works, a net income or dividend of nearly nine per cent. This is the same rate of income produced by the French railways in 1858, as stated above. The average income from railway investment in Great Britain and Ireland is probably not above half that sum; and in the United States it is perhaps even below that. But our country is so immensely extensive, and easy and rapid intercommunication between all portions of the empire so much a state necessity, that it might naturally be expected that for a long time considerable portions of the line should remain unproductive in a pecuniary point of light. There have been great changes in the policy of railway construction and management since this work first appeared, and mainly in the right direction. Reckless and destructive railway management is now, we trust, becoming the rare exception in this country, although there is still, no doubt, great room for improvement. There is probably no other country in the world where it is so difficult to bring the employees and others connected in various relations with railway management, to understand and appreciate the indispensable importance of bringing everything to the unbending control of a single will. This is not only indispensable for success, but equally for security.

8 Bank of the United States v. The Planters' Bank of Georgia, 9. Wheaton,

But a turnpike company or other corporation, managed exclusively by state officers, and at the expense and for the benefit of the state at large, is a public corporation.9

SECTION II.

How Corporations are created.

1. Corporations created by grant of the sovereignty. This may be proved, by implication or by presumption.

4. The corporate action of corporations restricted to state creating them.

5. It may act by its directors and agents in other states.

2. The sovereignty may establish corporations by general act, or delegation or procura- n. 10. But cannot properly transfer its entire tion. business to another state.

3. Different forms of defining a corpora- | 6. A college located at one place cannot establish a branch at another.

tion.

§ 17 a. 1. Strictly speaking, corporations can only be created by the authority of the sovereignty, either state or national.1 Hence, the ordinary mode of creating joint stock business corporations is by charter, by way of legislative act of the several states. But as, in some cases, the record of such charters may not have been preserved, and in other cases, the grant of corporate powers may have been by way of implication rather than express legislative act, the courts have allowed corporations to prove their corporate character and capacity, by evidence that such character and capacity is reasonably, or necessarily, im

904; Miners' Bank v. United States, 1 Greene (Iowa), 553; Turnpike Co. v. Wallace, 8 Watts, 316. Bardstown & Lou. Railway v. Metcalfe, 4 Met. (Ky.) 199.

9 Sayre v. North W. Turnpike Co., 10 Leigh, 454. But see Toledo Bank v. Bond, 1 Ohio State Reports, 622, 657. Opinion of Storrs, J. in Bradley v. New Y. & New H. R. 21 Conn. R. 294, 304, 305.

1 As the national sovereignty is limited to the subjects and powers enumerated in the Constitution, and such implied powers as are requisite to the successful exercise of those expressly granted; and as no general power to create corporations is expressly given, the construction of the court of last resort upon these questions, established at an early day, is, that Congress can charter only such corporations as are fairly to be esteemed necessary to the successful accomplishment of its delegated powers and functions. McCullough v. Maryland, 4 Wheaton, 316; Osborne v. Bank of United States, 9 Wheaton, 733.

plied from other legislative action; 2 or else, that its existence is fairly to be presumed from the long continuance of its unquestioned exercise.3

2. The legislature may create corporations by general acts of incorporation, as they are called, whereby a given number of persons, by forming an association in a prescribed form, shall become possessed of corporate powers, for certain defined objects and purposes. This is common, in many of the states, as to ecclesiastical and charitable, or benevolent associations, and not unfrequently as to banking, railway, and other business corporations. And although at one time questioned, it seems now conceded, that the sovereign authority may grant to any one the power to erect corporations to an indefinite extent, upon the maxim: Qui facit per alium facit per se. This power is given to the Chancellor of the University of Oxford, and exists in many other forms.

3. A corporation is defined by Lord Holt, Ch. J.,5 as an ens civile, a corpus politicum, a persona politica, a collegium, an universitas, a jus habendi et agendi. A corporation is well defined, as to the general sense of the term, by Chief Justice Marshall, as "an artificial being, invisible, intangible, and existing only in contemplation of law." It is, in fact, the mere creature or creation of the law. Endowed by its charter with the capacity of performing certain functions, and having no rights, and possessing no powers, except those conferred by the sovereignty by which it was created.

4. It is upon this ground, that it has been declared, upon the most unquestionable basis, both of principle and authority, that a corporation can have no legal existence out of the boundaries of the sovereignty by which it is created." "It exists

66

2 Conservators of the Tone v. Ash, 10 B. & Cr. 349.

3

Dillingham v. Snow, 5 Mass. 547; 2 Kent, Comm. 277; 1 Bl. Comm. 473. 4 Bl. Comm. 474.

5 Anonymous, 3 Salk. 102.

Dart. College v. Woodward, 4 Wheat. 518. The same learned judge, in another place, Providence Bank v. Billings, 4 Pet. U. S. 514, thus comments upon the purposes of acts of incorporation. "The great object of an incorporation is, to bestow the character and properties of individuality on a collective and changing body of men."

Taney, Ch. J. in Bank of Augusta v. Earle, 13 Pet. U. S. 519, 588.

only in contemplation of law, and by force of the law; and where that law ceases to operate, and is no longer obligatory, the corporation can have no existence. It must dwell in the place. of its creation, and cannot migrate to another sovereignty." And the same thing, substantially, is repeated in another case 8 by Mr. Justice Thompson.

9

5. There seems to be no question but the corporation may act, by its directors, agents, and servants, beyond the limits of the sovereignty by which it was created, but its first meeting, and all its subsequent meetings, in order to bind absent and dissenting members, should, it would seem, be held within the limits and jurisdiction of the sovereignty creating the corporation.10 But in a very recent case in New Jersey, Hilles v. Parrish, the general rule is reaffirmed, that a corporation can hold no meet

11

8 Runyan v Lessee of Coster, 14 Pet. 122, 131. The same doctrine is maintained in other American cases, Miller v. Ewer, 27 Me. R. 509; Farnum v. Blackstone Canal Co., 1 Sumner, 46; Day v. Newark India Rubber Co., 1 Blatchf. C. C. 628.

• McCall v. Byram Manuf. Co., 6 Conn. R. 428. It was held in this case, that the directors of a manufacturing corporation might legally hold a meeting, out of the state, for the purpose of making the appointment of secretary of the corporation, and the appointment would not be rendered invalid thereby, or by the fact that the person appointed had his permanent residence without the state.

10 Miller v. Ewer, 27 Me. R. 509. The law seems so entirely well settled, that corporations, created by one sovereignty, cannot so transfer their locality as legally to exist and act in their organic corporate capacity in another sovereignty, that it appears very singular that such multitudes of speculative jointstock corporations, deriving their charters from the legislature of a state, should attempt to transfer their entire local action to another sovereignty and jurisdiction. For there is no principle better settled than that the locality of a business corporation is determined by that of its principal business office. And there are, unquestionably, hundreds of business corporations chartered by the legislature of one state having their principal and only business office in other states. This is done doubtless by holding the stockholders' meetings in the states where the charter was obtained, and appointing a board of directors with full powers, and then carrying forward the business of the company through the agency of the board of directors, with a by-law for filling vacancies in the board by the action of the directors themselves. But that seems scarcely less than an evasion. And although it may be held binding upon the members of the company so long as acquiesced in by them, it might at any time be enjoined by proper proceedings in equity.

11 1 McCarter, 380.

ing and transact no corporate business, except within the state from which they derive their charter. And it was here further held, that a resolution of the directors, held out of the state where the corporation was created, for the purpose of transferring stock to some of their own number, was wholly inoperative. But the court declined to enjoin those holding under such title from voting at the election of corporate officers, until all parties could be heard upon the question of title.

6. But a college of learning, established in a particular place, has no power to establish a branch, for one of its departments. or faculties, at a different place. It was accordingly held, that Geneva College, at Geneva, N. Y., could not establish a medical school in the city of New York.12

1. Definitions of the different sense of the | 5. Any deviation from the name allowed, if term "constitution," as applied to cor

the substance and sense be preserved. Courts of equity will not restrain cor

porations from applying for enlarged

power.

7.

Change of constitution. Effect of change

of name.

8.

Courts of equity will enjoin a new corpo

ration from assuming the name of one of established credit.

§ 17 b. 1. The term "constitution," as applied to corporations, is susceptible of being used in very different senses. It may imply nothing more than the charter or formal grant of corporate organization and powers by the sovereignty, or it may be applied to certain fundamental principles, declared by the corporators themselves, as the unalterable basis of the organization of the body; or, if not wholly unalterable, not to be altered, except by the adoption and concurrence of certain formalities, not likely to occur, except in regard to changes of very obvious necessity; or the term may be used to signify the members or different bodies of which the corporation is composed.

12 People v. Trustees of Geneva College, 5 Wendell, 211.