CHAPTER II. CREATION OF CORPORATIONS. § 13. Power to create, generally. § 14. Corporations at common law. § 17. Corporations by royal charter. § 18. Creation by act of incorporation. § 19. Creation by delegated power. § 20. Restrictions on legislative power to create. § 21. Incorporation under general acts. § 22. Words of incorporation. § 23. Acceptance of grant. § 24. Acceptance, when not required. § 25. Construction of incorporating acts. § 13. Power to create, generally.-The sovereign authority only is competent to create a corporation.1 Formerly, in England, both public and private corporations were created by royal prerogative, without the intervention of parliament; 2 but the usual mode in which corporations are now called into being, is by authority of parliament. And, in the United States, they can only be created by authority of the legislature.4 A corporation cannot be constituted by agreement of parties.5 1 M'Culloch v. State of Maryland, 4 Wheat. 316, 424. 2 See Robinson v. Jones, 14 Florida, 255; Bushwell v. Insurance Co. 15 Serg. & R. 176; Railroad Co. v. Dalby, 19 Ill. 353. 3 See Reg. v. Boucher, 3 Q. B. 654; Rutter v. Chapman, 8 Mees. & W. 1. 4 Franklin Bridge Co. v. Wood, 14 Ga. 80; Atkinson v. Marietta etc. R. R. Co. 15 Ohio St. 21; Mayor of Mobile v. Moog, 53 Ala. 561; McPherson v. Foster, 43 Iowa, 48; S. C. 22 Ain. R. 215. 5 Stowe v. Flagg, 72 Ill. 397. § 14. Corporations at common law.-Corporations existing by virtue of the common law are supposed to have been warranted by the universal assent of the community BOONE CORP.-2. from the most remote period. The tenure of the king, of all bishops, parsons, vicars, deans, etc., to their respective offices, is based upon this principle.1 1 Town of Pawlet v. Clark, 9 Cranch, 292; Terrett v. Taylor, 9 id. 43. § 15. Corporations by prescription.- Corporations by prescription presuppose a grant by charter or act of parliament, which has been lost by such accidents as length of time may produce.1 But this origin must be clearly proved.2 Corporations may exist in this country by prescription; and if no charter or act of incorporation can be found, incorporation may be proved by reputation, or by user of the corporate powers.5 Where no act of incorporation could be found of a parish, which had existed more than forty years, evidence was admitted to prove its incorporation by reputation. So, parol proof, tending to show the existence of an act incorporating a town with the ordinary powers and privileges, was deemed admissible at the expiration of thirty years. To establish the existence of a corporation de facto, the acts relied upon to show user must in their nature be corporate acts, or such as would be corporate acts if the attempted incorporation had been perfected, and they must be unequivocally such.9 1 Jenkins v. Harvey, 2 Cromp. M. & R. 339; Town of Pawlet v. Clark, 9 Cranch, 292. 2 Reg. v. Durham, 10 Mod. 146. 3 Robie v. Sedgwick, 35 Barb. 319. 4 Barnes v. Barnes, 6 Vt. 388; Bow v. Allenstown, 34 N. H. 351; State v. Fitzsimmons, 30 Mo. 236. 5 Buffalo etc. R. R. Co. v. Cary, 26 N. Y. 75; Way v. Billings, 2 Mich. 397; and see People v. Frank, 28 Cal. 507. 6 Dillingham v. Snow, 5 Mass. 547. 7 Stockbridge v. West Stockbridge, 12 Mass. 400. 8 Greene v. Dennis, 6 Conn. 232. 9 DeWitt v. Hastings, 8 Jones & S. 463; affirmed, 69 N. Y. 518. § 16. Corporations implied.-If a body of men, lawfully constituted, cannot carry into effect the purposes intended, except when acting in a corporate capacity, a corporation is created by implication.1 An act requiring the supervisors of a county to erect a portion of a county into a levee district, to exercise corporate powers, makes such district so organized by the supervisors a corporation, although the act does not in terms declare it a corporation.2 A statute annexing other territory "to the town of A" must, by implication, make it a town, if it was not a town before. Where representation in certain cases is confined to towns, a grant to a place within the constitutional designation, of the power to send a representative, makes the place a town by implication.4 An act authorizing the judges of a particular court to take bonds to themselves in their official capacity, confers on them, as to such bonds, a corporate character.5 An act incorporating a bank, in which no persons were named as corporators, but the fund was placed under the management of directors to be elected by the legislature, and upon whom the usual banking powers were conferred, creates a corporation by necessary implication from the language of the act. A conveyance of land by sovereign authority, to a body of men with their associates and successors, to be held for public purposes of a municipal nature, creates a quasi corporation. A legislative act, which by necessary implication recognizes a corporation as an existing one, is, as far as individuals are concerned, conclusive evidence of its being a valid corporation.8 A defect in the certificate of incorporation under a general statute is cured by a legislative recognition of the corporation.9 But, if the creation of corporations except by general laws is forbidden, the mere recognition of a corporate body, as an existing corporation, in acts of the Legislature, cannot operate to give the organization validity.10 1 Conservators of River Tone v. Ash, 10 B. & Cr. 349; Jefferys v. Gurr, 2 Barn. & Adol. 833; Co. v. Westchester R. R. 3 Grant Cas. 200; Thomas v. Dakin, 22 Wend. 994; Stebbins v. Jennings, 10 Pick. 172. But see Neil v. Board of Trustees, 31 Ohio St. 15. 2 Dean v. Davis, 51 Cal. 406. 3 Bow v. Allenstown, 34 N. H. 35. 4 Bow v. Allenstown, 34 N. H. 35. 5 Justices etc. v. Armstrong, 3 Dev. (N. C.) 284. 6 Mahoney v. State Bank, 4 Ark. 620; and see Murphy v. State Bank, 7 id. 57. 7 People v. Schermerhorn, 19 Barb. 540; Comin'rs v. Boyd, 1 Ired. L. 194. 8 Soc. for Prop. of Gospel v. Town of Pawlet, 4 Peters, 480; People v. Farnham, 35 Ill. 562; People v. Kingston etc. Turnp. Co. 23 Wend. 193. 9 Basshor v. Dressel, 34 Md. 503; and see Kanawha Coal Co. v. Kanawha etc. Coal Co. 7 Blatclif. 391; St. Louis R. R. Co. v. Northern etc. Railway Co. 2 Mo. App. 69. 10 Oroville etc. R. R. Co. v. Supervisors, 37 Cal. 354. § 17. Corporations by royal charter.-Most of the corporations that arose in England during the middle ages were created by royal charter, in the form of letters patent, under the great seal; and a few existing corporations in this country, of different kinds, owe their origin to the English crown under the colony administration.2 The city of Annapolis, in Maryland, was incorporated by a charter from Queene Anue, when she held the government of the province. The granting of charters being a branch of the royal prerogative, it was formerly asserted that the act of incorporation must be the immediate act of the sovereign; but the law has since been unquestioned, that the crown may not only grant a license to a subject to erect a particular corporation, but may confer a general power by charter to create corporate bodies indefinitely. The king cannot, however, incorporate a body of men without their consent, and until his charter has been accepted, it is inoperative.6 It must be accepted by those to whom it is addressed; 7 and it must be accepted or rejected in toto; a charter cannot be accepted in part without the assent of the crown. The English Municipal Corporations Act 10 empowers the crown to incorporate any town, in accordance with its provisions, on the pres entation of a petition by its inhabitants.11 1 Bl. Com. 272, 473. 2 See Stockbridge v. West Stockbridge, 12 Mass. 400; Town of Paw. let v. Clark. 9 Cranch, 292. 3 3 Bland, 416, note. 410 Co. Rep. 27. 5 Fazakerly v. Wiltshire, 1 Strob. 462; 1 Bl. Com. 473; McKim . Odom, 3 Bland, 416. 6 Bagg's Case, 1 Rolle, 224; Rex v. Vice-Chancellor, 3 Burr. 1647; and see Ellis v. Marshall, 2 Mass. 269. 7 Lincoln v. Kennebec Bank, 1 Me. 79. 8 Ewre v. Strickland, Cro. Jac. 240; Rex v. Passmore, 3 Term R. 575. 9 Rex v. Westwood, 2 Dowl. 21; S. C. 7 Bing. 1, 90. 10 Stat. of 5 & 6 Will. 4, ch. 76. 11 See Reg. v. Boucher, 3 Q. B. 654; Rutter v. Chapman, 8 Mees. & W. 1. § 18. Creation by acts of incorporation.--In England, corporations are now created either by special act of parliament, or individuals in a manner incorporate themselves under the provisions of general statutes enacted for that purpose. And in this country, all corporations, public and private, exist and can only exist by virtue of legislative sanction.2 Even in the rare and exceptional instances of prescriptive corporations, a legisla tive grant is supposed.3 The power of Congress to create or authorize the creation of corporations is conclusively settled; although the power of creating a corporation is not included in the enumerated powers of the national government, the great fiscal powers which are enumerated give the implied power to create a corporation, if the existence of such a being is essential to those powers.5 So, a state may grant acts of incorporation for the attainment of those objects which are essential to the existence of society. So, also, a territorial legislature, vested with general legislative powers, may create a corporation," which is not affected by the subsequent adoption of a state constitution. And in the case of a territory which is about to become a state, until the territorial government ceases to exist, by the admission of the new state into the Union, the power to create corporations rests wholly in the territorial government, and not in the newly formed state legislature." 1 See § 13. ante. 2 Stowe v. Flagg, 72 Ill. 397; Atkinson v. Marietta etc. R. R. Co. 15 Ohio St. 21. 3 See § 15, ante. |