CHAPTER II.

IN WHAT MANNER AND BY WHOM PRIVATE CORPORATIONS MAY BE

CREATED.

By the Civil Law no corporation could be created without the express approbation of the sovereign, after a satisfactory representation of their usefulness and tendency to promote the public good. By that law a license is required, in the words of Domat," to establish corporations and communities, ecclesiastical or temporal, regular or secular, and of all other kinds whatsoever; and it is only the sovereign, he adds, who can grant this leave, and approve the communities and corporations to whom the right of assembling themselves together may be granted." It has, however, been laid down, as the reader will probably recollect, by Blackstone, that corporations seem to have been erected by the Civil Law by the mere act and voluntary association of the members, provided such convention was not contrary to law; and it does not appear, he says, that the prince's consent was necessary. Blackstone is doubtless correct as to temporary societies, or mercantile partnerships, formed for the interests of particular persons, and to continue during their lives; but as to corporate commu

1 2 Domat, Civil Law, 298, 9. Mandatis principalibus præcipitur præsidibus provinciarum, ne patiuntur esse (collegia, sodalitia) neve milites collegia in castris habeant, l. 1, ff. de colleg. and corp. Neque societas, neque collegium, neque hujusmodi corpus passim omnibus habere conceditur. Nam et legibus et senatusconsultis, et principalibus constitutionibus ea res coercetur. Paucis admodum in causis concessa sunt hujusmodi corpora; ut ecce vectigalium publicarum sociis permissum est corpus habere; vel auri fodinarum, vel argenti fodinarum, et salinarum. Item collegia Romæ certa sunt quorum corpus senatusconsultis atque constitutionibus principalibus confirmatum est; veluti pistorum et quorundam aliorum et naviculariorum, l. 1, ff. quod cuj. un. nom. And see also Civil Code of Louisiana, Tit. Corporations.

nities, intended to be permanent like the corporations of the present day, the rule of the Civil Law was, that they could not exist unless confirmed by the sovereign power.1

$2. In England, it is true, during the latter part of the Saxon period, and for some time after the conquest, the power of conferring corporate privileges was exercised by the nobles, within their respective demesnes. And there are many instances of towns within the territorial limits of the feudal barons, which had enjoyed such privileges by charters from their immediate lords; which privileges, having come to the crown by escheat, were confirmed. That the king, however, very soon after the conquest, was understood to possess the exclusive prerogative of creating guilds, appears from the circumstance, that many companies of a commercial character were suppressed about that period, as adulterine guilds; that is, corporations set up without the royal or government warrant and authority. In the time of Bracton, who lived in the reign of Henry III. and Edward I., the king's prerogative as to the exclusive privilege of granting liberties and franchises in general, seems to have been fully established; and the absolute necessity of the king's assent to the institution of any corporation was held, in the reign of Edward III. to have been previously settled as clear law. The method by which the king's assent is expressly given is either by act of parliament (of which the royal assent is a necessary ingredient) or by charter. The pope was never competent to create a corporation in England. At the time of the reformation, in consequence of the statute 1 Edw. VI. which gave the colleges, therein described, to the king, it generally became a question whether the house claimed was a lawful college; the determination of which depended upon the authority by which it

1 See Brown's Civil Law, 101, 102; The Digest, 47, Lib. 22, 23, says expressly, that every corporation is illegal, nisi ea vel Senatus Consulti auctoritate vel Cæsaris coierit.

21 Kyd, 42; Miller on Eng. Gov. 149. 3 1 Kyd, 44.

Bract. 1, 2, ch. 24, f. 55, 56.

5 Bro. Corpor. 15; 10 R. 33.

was established. In the case of Greystock college, it appeared that Pope Urban, at the request of Ralph, baron of Greystock, founded a college of a master and six priests, resident at Greystock, and assigned to each of the priests five marks per annum, besides their bed and chamber, and to the master forty pounds per annum; and it was certified in the book of the first fruits and tenths, that this college was in being within five years before the making of the statute; and it was resolved by the justices, that this reputative college was not given to the king by that statute, because it wanted a lawful beginning, and the countenance also of a lawful commencement, for that the pope could not found or incorporate a college within the realm, nor assign nor license others to assign temporal living to it; but that it ought to be done by the king himself, and by no others."

In England the king alone, when a corporation is intended with privileges, which, by the principles of the English Law, may be granted by the king, is qualified to create a corporation by his sole charter. When, on the other hand, it is intended to establish a corporation vested with powers which the king cannot of himself grant, recourse must be had to an act of parliament; as if it be intended, for example, to grant the power of imprisonment, as in the case of the College of Physicians; or to confer a monopoly, as in the case of the East India Company; or when a court is erected, with a

1 1 1 Kyd, 44.

3

2

Dyer, 81, pl. 64; 4 R. 107. Mr. Burke, in his speech on the India bill in considering that objection, which was made to the bill on the ground of its being an attack on "the chartered rights of men," observed, that that phrase was unusual in the discussion of privileges conferred by a charter like that of the East India Company. If the natural rights of men, he said, are clearly defined by express covenants, and secured against power and chicane, it is a formal recognition, by the sovereign power of an original right in the subject; and that the charters, which by distinction are called great, are public instruments of this nature, as, for instance, the charters of king John and king Henry III. But there may be, and are charters of a different nature. Magna Charta is a charter to restrain power; but the East India charter and other charters which have been granted are to create power. Burke's Speech on the India Bill.

power to proceed in a manner contrary to the rules of the common law.1 Until late years, most of the parliamentary acts creating corporations, confirm such as were before created by the king alone without authority, as in the case of the College of Physicians constituted by Henry VIII.2

The assent of government may be given constructively or presumptively, as well as expressly. In a case in England, where it manifestly appeared, from the different clauses of several local legislative acts, that conservators of a river navigation should take land by succession, and not by inheritance, although they were not created a corporation by express words, they were so by implication; and that being so, they were entitled to sue in their corporate name for an injury done to their real property."

The corporations, which are said in the English books to have been created by the common law and by prescription, all imply the sanction of government. The corporations, existing in England by virtue of the common law, are supposed to have been warranted by the concurrence of former governments; common law being, in fact, nothing more than custom arising from an universal assent. The tenure of the king, and of all bishops, parsons, &c. to their respective offices, is founded on the principle just stated. So also in the case of corporations, which are said to exist by prescription, such for example as the corporation of the city of London, and others which have enjoyed and exercised corporate privileges, from time immemorial, they are in the eye of the law well founded; for though no legal charter can be shown, yet the legal presumption is, there once was a charter, which, owing to the accidents of time, is lost or destroyed. A corporation by prescription is a corporation, which has existed from time immemorial, and of which it is impossible to show the commence

11 Kyd, 61; Cro. Car. 73, 87.

2 8 R. 114.

Tone Conservators v. Ash, 10 Barn. & Cresw. 349.

1 Black. Comm. 472; 1 Kyd, 39; Town of Pawlet v. Clark, 9 Cranch (U.S.) R. 292.

ment by any particular charter or act of parliament, the law presuming that such charter or act of parliament once existed, but that it has been lost by such accidents as length of time may produce.1

$3. There is no doubt, says Kent, that corporations, as well as other private rights and franchises may exist in this country by prescription. In this country, the common law, so far as it relates to churches in this country, of the episcopal persuasion, the right to present to such churches, and the corporate capacity of the parsons thereof to take in succession, has been expressly recognized by the highest authority." The church entitled must be a church recognized in law for this particular purpose. Whenever, therefore, previous to the revolution, an episcopal church was duly erected by the crown, the parson thereof regularly inducted, had a right to the glebe in perpetual succession. Where no such church was duly erected by the crown, the glebe remained as an hæreditas jacens, and the state which succeeded to the rights of the crown might, with the assent of the town, aliene or encumber it; or might erect an episcopal church therein, and collate either directly, or through the vote of the town, indirectly, its parson, who would thereby become seized of the glebe jure ecclesiæ, and be a corporation capable of transmitting the inheritance. Such were the rights and privileges of the episcopal churches of New Hampshire, and the legal principles applicable to the glebes reserved in the various townships of that State previous to the revolution. Without indeed an adoption of some of the common law, it seems difficult to support the royal grants and commissions, or to uphold that ecclesiastical policy, which the crown had a right to patronize, and to which it so explicitly avowed its attachment.*

It may be considered well settled that a corporation may exist in this country by presumptive evidence. In Massachusetts,

1 1 1 Kyd, 41.

22 Kent's Com. 277.

3 Town of Pawlet v. Clark et al. 9 Cranch, 294.

4 Ib. See also Terrett et al v. Taylor et al. 9 Cranch, 43.