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ACTIONS BY AND AGAINST CORPORATIONS.
POWER TO SUE AND BE SUED.
ART. I. IN GENERAL. 88 7360–7375.
II. ACTIONS BY CORPORATIONS. 88 7380–7388.
ARTICLE I. IN GENERAL
SECTION 7360. Common-law power of corpora
tions 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 stat
ute and constitutional pro
visions. 7364. By what statutes. 7365. By what statutes not con
ferred. 7366. Corporations deemed
* persons" for remedial purposes. 7367, Suable in what manner.
SECTION 7368. Power how affected by want of
organization, 7869. De facto corporations. 7370. Power how affected by dissolu
tion. 7371. What if the State is a member. 7372. Sovereign States may sue as
corporations. 7373. Corporation cannot sue as a
common informer. 7374. Power to sue exercised by di
rectors. 7375. Corporation may maintain an
action against its own members.
8 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 cor. porate 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."
§ 7361. This Power to Sue Coextensive with the Power to Make Contracts. - It may be laid down, as a universal proposi. tion, 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
Ante, g 1, et seq.; Libbey u. Hodgdon, 9 N. H. 394, 396, opinion by Wilcox, J.; Breene v. Merchants' &c. Bank, 11 Colo. 97; 8. c. 20 Am. & Eng. Corp. Cas. 532; 17 Pac. Rep. 280: Grant County v. Lake County, 17 Or. 453; 8. 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; 8.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 corposation 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. 8.) (N. Y.) 352.
McLoud v. Selby, 10 Conn. 390; 8. C. 27 Am. Dec. 689.
Ward v. Hartford Co., 12 Conn. 404, 407.