TITLE EIGHTEEN. ACTIONS BY AND AGAINST CORPORATIONS. CHAPTER CLXXVII. POWER TO SUE AND BE SUED. ART. I. IN GENERAL. §§ 7360-7375. II. ACTIONS BY CORPORATIONS. 88 7380-7388. SECTION 7415. ARTICLE I. IN GENERAL. 7360. Common-law power of corporations to sue and be sued. 7361. Power to sue coextensive with the power to make contracts. 7362. Exception as to liability for breach of corporate duties. 7363. This power conferred by statute and constitutional provisions. 7364. By what statutes. 7365. By what statutes not conferred. SECTION 7368. Power how affected by want of 7369. De facto corporations. 7371. What if the State is a member. 7373. Corporation cannot sue as a 7366. Corporations deemed "per- 7375. Corporation may maintain an sons" for remedial purposes. action against its own members. 7367. Suable in what manner. § 7360. Common-law Power of Corporations to Sue and be Sued. The creation by the legislature of a body corporate, for any purpose, impliedly confers upon it the power to sue and be sued, so far as may be necessary to maintain its corporate rights and to enforce its corporate duties. In general, it may be said that the power to sue and be sued is, by the principles of the common law, an incident of every corporation.1 § 7361. This Power to Sue Coextensive with the Power to Make Contracts. It may be laid down, as a universal proposition, that the capacity of a corporation to sue and be sued is coextensive with its capacity to make and take contracts; since the power to make a contract, whereby an obligation might accrue to it, would be nugatory, unless it could apply the ordinary legal remedies to enforce that obligation; and "it surely would be a flagrant departure from all principle to hold that such contracts could not be enforced against them." It is upon these grounds that counties are held liable in actions ex contractu, though in many States they cannot be sued ex delicto. It follows, as a necessary consequence, that where the power is conferred upon any collective body of men to make and take contracts in their aggregate capacity, they have the 1 Ante, § 1, et seq.; Libbey v. Hodgdon, 9 N. H. 394, 396, opinion by Wilcox, J.; Breene v. Merchants' &c. Bank, 11 Colo. 97; s. c. 20 Am. & Eng. Corp. Cas. 532; 17 Pac. Rep. 280: Grant County v. Lake County, 17 Or. 453; s. c. 21 Pac. Rep. 447; Planters' &c. Bank v. Andrews, 8 Port. (Ala.) 404, 425. See, also, Berford v. New York Iron Mine, 56 N. Y. Super. 236. Compare ante, § 5. It is scarcely necessary to cite precedents of cases where this power has been ascribed to railroad companies - Baltimore &c. R. Co. v. Gallahue, 12 Gratt. (Va.) 655; s. c. 65 Am. Dec. 254-to turnpike companies-Dunningtons v. North Western Turnp. Road, 6 Gratt. (Va.) 160- or indeed to any particular kind of corporation; because we shall see, from an examination of each case, that the question was whether the party suing or being sued as a corporation was indeed a body corporate. This, for instance, was the question where an action had been brought against the State Sinking Fund of Kentucky, and where the court held that it was liable to be sued, because it was a body corporate, although in its interests and functions closely connected with the State, against which no action could be brought. Sinking Fund Commissioners v. Northern Bank, 1 Met. (Ky.) 174. Such, also, was the question where the right to bring an action for an injury resulting from negligence against the Metropolitan Fire Department of New York, was challenged, the court holding it liable to be sued as a corporation. Clarissy v. Metropolitan Fire Department, 7 Abb. Pr. (N. s.) (N. Y.) 352. McLoud v. Selby, 10 Conn. 390; 8. c. 27 Am. Dec. 689. Ward v. Hartford Co., 12 Conn. 404, 407. |