General Principles. according to its own judgment, unrestrained by | attach to it. There is no difference between the any limitation of its power imposed by the con- case of a grant of land or of franchises to an exstitution of the United States. Dartmouth Col-isting corporation, and a grant to a corporation lege v. Woodward, 4 Wheat. 518; 4 Cond. Rep. 539. 11. The power of establishing a corporation is not a distinct sovereign power, or end of government; but only the means of carrying into effect other powers which are sovereign. Whenever it becomes an appropriate means of exercising any of the powers given by the constitution to the government, it may be exercised by that government. M-Culloch v. The State of Maryland, 4 Wheat. 316; 4 Cond. Rep. 466. brought into life for the very purpose of receiving the grant. As soon as it is in esse, and the franchises and property become vested and executed in it, it is as much an executed contract, as if its prior existence had been established for a century. Ibid. 15. The books of a corporation are the best evidence of their acts, and ought to be admitted in evidence whenever those acts are to be proved. Owings v. Speed, 5 Wheat. 420; 4 Cond. Rep. 716. 16. A corporation cannot make a contract which will abridge the legislative power with which it is invested by its charter. Goszler v. The Corporation of Georgetown, 6 Wheat. 593; 17. It is a sound principle, that when a go pany, it divests itself, so far as concerns the transactions of that company, of its sovereign character, and takes that of a private citizen. Instead of communicating to it its privileges and its prerogatives, it descends to a level with those with whom it associates itself, and takes the character which belongs to its associates, and to the business which is to be transacted. Thus many states who have an interest in banks are not suable in their own courts; yet they never exempt the corporation from being sued. Bank of the United States v. Planters' Bank of Georgia, 9 Wheat. 904; 5 Cond. Rep. 794. 12. A corporation is an artificial being, intangible, invisible, and existing only in contemplation of law. Being the mere creature of the law, it possesses only those properties which the charter of its creation confers upon it, either ex-5 Cond. Rep. 196. pressly or as incidental to its very existence. These are such as are supposed best calculated vernment becomes a partner in any trading comto effect the object for which it was created. Among the most important are, immortality, and if the expression may be allowed, individuality; properties by which a perpetual succession of many persons are considered the same persons, and may act as a single individual. They enable a corporation to manage its own affairs, and to hold property, without the perplexing intricacies, the hazards and endless necessity of perpetual conveyances, for the purpose of transmitting it from hand to hand. It is chiefly for the purpose of clothing bodies of men, in succession, with those qualities and capacities, that corporations were invented, and are in use. By these means, a perpetual succession of individuals are capable of acting for the promotion of the particular object, like our immortal being. Dartmouth College v. Woodward, 4 Wheat. 518; 4 Cond. Rep. 543. 13. There are two kinds of corporations ag. gregate, such as are for public government, and such as are for private charity. Public corporations are those for the government of a town, city, or the like, and are governed by the law of the land they have no particular founder, and consequently no particular visitor. They are founded by the government for public purposes, and the whole interest belongs to the government. Private and particular corporations for charity are subject to the private government of those who create them, and are to be visited by them or their heirs, or such other persons as they may appoint. The only rules for their government are the laws and constitutions assigned by the founder. Ibid. 14. When a charter is granted, and it brings the corporation into existence, without any act of the natural persons who compose it, and gives such corporation any privileges, franchises, or property, the law deems the corporation to be first brought into existence, and then clothes it with the granted liberties and property. When, on the other hand, the corporation is to be brought into existence by some future acts of the corporators, the franchises remain in abeyance until such acts are done, and when the corporation is brought into life, the franchises instantaneously 18. As a member of a corporation, a government never exercises its sovereignty. It acts merely as a corporator, and exercises no other power in the management of the affairs of the corporation, than are expressly given by the incorporating act. Ibid. 19. The great object of an incorporation is tc bestow the character and properties of individuality on a collected and changing body of men. Any privileges which may exempt it from the burdens common to individuals, do not flow necessarily from the charter, but must be expressed in it, or they do not exist. Providence Bank v. Billings & Pittman, 4 Peters, 514. 20. That a corporation is strictly limited to the exercise of those powers which are specifically conferred on it, will not be denied. The exercise of the corporate franchise, being restrictive of individual rights, cannot be extended beyond the letter and spirit of the act of incorporation. Beatty v. Knowler, 4 Peters, 152. 21. In respect to public corporations which exist only for public purposes, as counties, towns, cities, &c., the legislature may, under proper limitations, have a right to change, modify, enlarge, or restrain them; securing, however, the property for the use of those for whom, at whose expense, it was originally purchased. But the legislature cannot repeal statutes erecting private corpora tions, or confirming to them property already acquired under the faith of previous laws; and by such repeal, vest the property exclusively in the state, or dispose of the same to such pur General Principles. poses as they may please, without the consent or default of the corporators. Terret et al. v. Taylor et al., 9 Cranch, 43; 3 Cond. Rep. 254. 22. By the supreme court:-The court find no case in which the principle is affirmed, that a municipal corporation, established for the general purposes of government, with limited legislative powers, has been considered liable for losses consequent on its having misconstrued the extent of its powers, in granting a license which it had no authority to grant, without taking that security for the conduct of the person obtaining the license, which its own ordinances had been supposed to require, and which might protect those who transact business with the persons acting under the clause. Fowle v. The Common Council of Alexandria, 3 Peters, 409. 23. That corporations are bound by their contracts is admitted. That money corporations, or those carrying on business for themselves, are liable for torts, is well settled. But that a legislative corporation, established as a part of the government of the country, is liable for losses sustained by a nonfeasance, by an omission of the corporate body to observe a law of its own, in which no penalty is provided, is a principle for which the court can find no precedent. Ibid. 24. Municipal corporations, acting within the limits of the powers conferred upon them by the legislature, in the exercise of a special franchise granted to them, and the performance of a special duty imposed upon them, are responsible for the acts and contracts of their agents, duly appointed and authorized, within the scope of the authority of such agents; in the same manner as other corporations and private individuals are responsible on their promises, express and implied. Clarke v. The Corporation of Washington, 12 Wheat. 40; 6 Cond. Rep. 425. 25. Where a new bank was incorporated with the same name as an old bank, whose charter was expiring, the new bank is not responsible for the notes of the old bank, although the major part of the stockholders may be the same in each bank. Bellows v. Hallowell and Augusta Bank, 2 Mason's C. C. R. 31. 26. Whether a charter be a continuation of an old corporation, or the creation of a new corporation, must be decided, not by the persons who are stockholders, but by the legislative intent in the act of incorporation. The charter granted by the Massachusetts act of the 23d of June, 1812. ch. 47, to the Hallowell and Augusta Bank, is not a continuance of the old corporation of that name. Ibid. and by a forfeiture of them for wilful misuser and nonuser. Every creditor must be presumed to understand the nature and incidents of such a body politic, and to contract with reference to them. And it would be a doctrine new in the law, that the existence of a private contract of the corporation should force upon it a perpetuity of existence, contrary to public policy, and the nature and objects of its charter. Mumma v. The Potomac Company, 8 Peters, 281. 30. There is no pretence to say, that a scire facias to revive a judgment, can be maintained, and a judgment had thereon, against a dead corporation, any more than against a dead man. Ibid. 31. In a suit brought by the president, directors and company of the Bank of the United States, upon a bond given to the bank to secure the faithful performance of the official duties of one of its cashiers, evidence of the execution of the bond, and of its approval by the board of directors, (according to the rules and regulations contained in the charter of the bank,) is admissible, notwithstanding there was no record of such approval, and the plaintiff may prove the fact of such approval by the board, by presumptuous evidence, in the same manner as such fact might be proved in the case of private persons not acting as a corporation, or as the agents of a corporation. Bank of the United States v. Dandridge, 12 Wheat. 64; 6 Cond. Rep. 440. 32. Where, in such a case, the cashier is duly appointed, and permitted to act in his office, for a long time, under the sanction of the directors, it is not necessary that his official bond should be accepted by the board of directors as satisfactory, according to the terms of the charter, in order to enable him to enter legally on the duties of his office, or to make his sureties responsible for the non-performance of those duties. The charters and the by-laws are to be considered, in this respect, directory to the board and not as conditions precedent. Ibid. 33. Where two corporations are created by adjacent states, with the same name, to construct a canal in each of the states respectively, and afterwards their interests are united by subsequent acts of the states respectively, this does not merge the separate corporate existence of such corporations, but creates a unity of stock and interest only. Farnum v. Blackstone Canal Corporation, 1 Sumner's C. C. R. 47. 34. Every act of incorporation must be construed in such a manner, if possible, as not to exceed the sovereignty of the legislature granting it. It ought not, therefore, to be deemed to authorize any act to be done which would exceed the jurisdictional power of the state, or interfere with the rights of other states, as to construct canal, or raise a dam, in another state. Ibid. 27. The answer in chancery of a corporate body, under its common seal, denying the equity of a bill, is sufficient to warrant a denial of an injunction, or to dissolve it if granted. Haight v. The Proprietors of the Morris Aqueduct, 4 Wash.a C. C. R. 601. 28. If the ordinances of the city corporation of Philadelphia are in collision with an act of congress, the former must give way. The United States v. John Hart, Peters C. C. R. 390. 29. A corporation, by the very terms and nature of its political existence, is subject to dissolution, by a surrender of its corporate franchises, 35. A college, merely because it receives a charter from the government, though founded by private benefactors, is not thereby constituted a public corporation controllable by the government, nor does it make any difference that the funds have been generally derived from the bounty of the government itself. Allen v. M'Keen, 1 Sumner's C. C. R. 276. Liabilities and Obligations of Corporations. 2. Liabilities and Obligations of Corporations. 36. A corporation can act only in the manner prescribed by the act of incorporation which created it. When its agents do not clothe their proceedings with those solemnities which are required by the incorporating act, to enable them to bind the company, the informality of the transaction is itself conducive to the opinion, that such act was rather considered as manifesting the terms on which they were willing to bind the company, as negotiations preparatory to a conclusive agreement, than as a contract obligatory on both parties. Head and Amory v. The Providence Ins. Co., 2 Cranch, 127; 1 Cond. Rep. 371. 37. In its corporate capacity, a corporation is a mere creature of the act to which it owes its existence it may correctly be said to be precisely what the incorporating act has made it, to derive all its powers from that act, and to be capable of exerting its faculties only in the manner that act authorizes. Ibid. scope of his duty. Fleckner v. The Bank of the United States, 8 Wheat. 338; 5 Cond. Rep. 465. 43. The ancient doctrine of the common law, that a corporation can only act through the instrumentality of its common seal, has no application to corporations created by statute, whose charter contemplates the business of the corporation, to be transacted exclusively by a special body or board of directors; and the acts of such a body or board, evidenced by a written note, are as completely binding on the corporation, and as complete authority to their agents, as the most solemn acts done under the corporate seal. Ibid. 44. Municipal corporations, acting within the limits of the power conferred on them by the legislature, in the exercise of a special franchise granted to them, and the performance of a special duty imposed upon them, are responsible for the acts and contracts of their agents, duly appointed and authorized within the scope of the authority of such agents, in the same manner as other corporations and private individuals are responsible on their promises express and implied. Clark v. Corporation of Washington, 13 Wheat. 40; 6 Cond. Rep. 425. 38. Wherever a corporation aggregate is acting within the scope of the legitimate purposes of its institution, all parol contracts made by its au- 45. It is not admitted as a general proposition, thorized agents are express promises of the cor- that the acts of a corporation, although in all poration; and all duties imposed on them by other respects rightly transacted, are invalid, law, and all benefits conferred at their request, merely from the omission to have them reduced raise implied promises, for the enforcement of to writing, unless the statute creating such corwhich an action lies. Bank of Columbia v. Pat-porations makes such writing indispensable as terson's Administrators, 7 Cranch, 299; 2 Cond. Rep. 501 39. The technical doctrine, that a corporation could not contract, except under its seal, or in other words, could not make a promise, if it ever had been fully settled, must have been productive of great mischief. Indeed, as soon as the doctrine was established that its regularly appointed agents could contract in their name with out seal, it was impossible to support it; for otherwise the party who trusted it must have been without remedy against the corporation. Ibid. 40. The seventeenth section of the act incorporating the Mechanics Bank of Alexandria, providing "that all bills, bonds, notes, and every other contract or engagement on behalf of the corporation, shall be signed by the president, and countersigned by the cashier, and the funds of the corporation shall in no case be liable for any contract or engagement, unless the same shall be signed and countersigned as aforesaid," does not extend to contracts and undertakings implied in law. Mechanics Bank of Alexandria v. The Bank of Columbia, 5 Wheat. 326; 4 Cond. Rep. 666. 41. Where a check was drawn by a person who was the cashier of an incorporated bank, and it appeared doubtful upon the face of the instrument, whether it was an official or a private act, parol evidence was admitted to show that it was an official act. Ibid. 42. The acts of a cashier of a bank, done in the ordinary course of the business actually confided to such an officer, may well be deemed prima facie evidence, that they fell within the evidence, or to give them an obligatory form. If the statute imposes such a restriction, it must be obeyed; if it does not, then it remains for those who assert this doctrine, to establish it by the principles of the common law, and by decisive authorities. Bank of the United States v. Dandridge, 12 Wheat. 64; 6 Cond. Rep. 444. 46. Grants and proceedings beneficial to the corporation are presumed to be accepted; and slight acts on their part, which can be reasonably accounted for, only upon the supposition of such acceptance, are admitted as presumptions of the fact. If a person acts notoriously as cashier of a bank, and is recognised by the directors or by the corporation as an existing officer, a regular appointment will be presumed; and his acts as cashier will bind the corporation, although no written proof is or can be produced of his appointment. A charter may be presumed to have been given to persons who have long acted as a corporation, and assumed the exercise of the powers of a corporate body, whether of an ordinary or extraordinary nature. The acts of the corporate officers are admissible evidence to prove the fact of the acceptance of a particular charter by an existing corporation, or by corporators already in the exercise of corporate functions. Ibid. 47. An action was instituted in the circuit court of the United States for the district of Alabama, by the Bank of Augusta, Georgia, against the defendant, a citizen of Alabama, on bills of exchange drawn at Mobile, Alabama, on New York, which had been protested for non-payment, and returned to Mobile. The bill was made and endorsed for the purpose of being discounted Liabilities and Obligations of Corporations. by the agent of the bank, who had funds in his hands belonging to the plaintiffs for the purpose of purchasing bills of exchange, which funds were derived from bills and notes discounted by the bank in Georgia. The bills were discounted by the agent of the bank in Mobile, for the benefit of the bank, with their funds, to remit the said funds to the bank. The defendant defended the suit on the facts that the Bank of Augusta is a corporation incorporated by an act of the legislature of Georgia, and have such power as is usually conferred on banking institutions, such as to purchase bills of exchange, &c. The circuit court held that the plaintiffs could not recover on the bills of exchange, and that the purchase of the bills by the agent of the plaintiffs was prohibited by the laws of Alabama, and gave judgment for the defendant. In the case of the Bank of the United States of Pennsylvania v. Primrose, the plaintiffs, a corporation by virtue of a law of the state of Pennsylvania, authorized by its charter to sue and be sued in the name of the corporation, and to deal in bills of exchange, and composed of citizens of Pennsylvania, and of states of the United States, other than the state of Alabama; the agent of the bank resident in Mobile, and in possession of funds belonging to the bank, and intrusted with them for the sole purpose of purchasing bills of exchange, purchased a bill of exchange, and paid for the same in notes of the branch of the Bank of Alabama, at Mobile. The bill was protested for non-payment, and a suit was instituted in the circuit court against the payee, the endorser of the bill. The question for the opinion of the circuit court was, whether the purchase of the bill of exchange by the United States Bank was a valid contract under the laws of Alabama. The circuit court decided that the contract was void, and gave judgment for the defendant. The case of the New Orleans and Carrollton Railroad Company v. Joseph B. Earle, was similar to that of the Bank of Augusta v. Joseph B. Earle. The supreme court reversed the judgment of the circuit court in the three cases, and held the contracts for the purchase of the bills valid, and that the plaintiffs acquired a legal title to the bills by the purchase. The Bank of Augusta v. Earle, 13 Peters, 519. 48. In the case of the Bank of the United States v. Deveaux, the supreme court decided, that in a question of jurisdiction they might look to the character of the persons composing a corporation; and if it appeared that they were citizens of another state, and the fact was set forth by proper averments, the corporation might sue in its corporate name in the courts of the United States. But in that case the court confined its decision, in express terms, to a question of jurisdiction, to a right to sue, and evidently went even so far with some hesitation. The propriety of that decision is fully assented to, and it has ever since been recognised as authority in this court. But the principle has never been extended any farther than it was carried in that case, and has never been supposed to extend to contracts made by a corporation, especially in another sovereignty. Ibid. 49. The nature and character of a corporation created by statute, and the extent of the powers which it may lawfully exercise, have upon several occasions been under consideration in the supreme court. The cases of Head and Amory v. The Providence Insurance Company, 2 Cranch, 127, and the Dartmouth College v. Woodward, 4 Wheaton, 636, cited. Ibid. 50. Whenever a corporation makes a contract, it is the contract of the legal entity; of the arti ficial being created by the charter, and not the contract of the individual members. The only rights it can claim are the rights which are given to it in that character, and not the rights which belong to its members as citizens of a state. Ibid. 51. It may be safely assumed, that a corporation can make no contracts, and do no act, either within or without the state which creates it, except such as are authorized by its charter; and those acts must also be done by such officers or agents, and in such manner as the charter authorizes. And if the law creating a corporation does not, by the true construction of the words used in the charter, give it the right to exercise its powers beyond the limits of the state, all contracts made by it in other states would be void. Ibid. 52. It is very true that a corporation can have no legal existence out of the boundaries of the sovereignty by which it is created. It exists 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. But although it must live and have its being in that state only, yet it does not by any means follow that its existence there will not be recognised in other places; and its resi dence in one state creates no insuperable objection to its power of contracting in another. It is indeed a mere artificial being, invisible and intangible; yet it is a person for certain purposes, in contemplation of law; and has been recog nised as such by the decisions of this court. is sufficient that its existence as an artificial person, in the state of its creation, is acknowledged and recognised by the law of the nation where the dealing takes place; and that it is permitted, by the laws of that place, to exercise there the powers with which it is endowed. Ibid. It 53. It is well settled, that by the law of comity among nations, a corporation created by one sovereignty is permitted to make contracts in another, and to sue in its courts; and that the same law of comity prevails among the several sovereignties of this Union. The public, wellknown, and long-continued usages of trade; the general acquiescence of the states; the particular legislation of some of them, as well as the legislation of congress, all concur in proving the truth of this proposition. Ibid. 54. Franchises are special privileges conferred by government upon individuals, and which do not belong to the citizens of the country generally of common right. It is essential to the Liabilities and Obligations of Corporations. character of a franchise, that it should be a grant | coal as fuel, granted the incorporation, with the from the sovereign authority; and in this country, no franchise can be held which is not derived from a law of the state. Ibid. 55. The court can perceive no sufficient reason for excluding from the protection of the law the contracts of foreign corporations, when they are not contrary to the known policy of the state, or injurious to its interests. It is nothing more than the admission of the existence of an artificial person created by the law of another state; and clothed with the power of making certain contracts. It is but the usual comity of recognising the law of another state. Ibid. 56. In the legislation of congress, where the states and the people of the several states are all represented, we shall find proof of the general understanding in the United States that, by the law of comity among the states, the corporations chartered by one were permitted to make contracts in the others. Ibid. 57. A corporation may be bound by contracts not executed under their common seal, and by the acts of its officers in the course of their official duties: when, in a declaration, it is averred that a bank by its officers agreed to a certain contract, this averment imports every thing to make the contract binding. The Bank of the Metropolis v. Guttschlick, 14 Peters, 19. 58. A paper executed by the president and cashier of a bank, purporting to convey a lot of ground held by the bank, is not the deed of the corporation. Ibid. 59. An action of assumpsit was brought against the Bank of the Metropolis, on a contract under the seals of the president and cashier. Held, that the action was well brought; and it makes no difference, in an action of assumpsit against a corporation, whether the agent was appointed under the seal or not; or whether he puts his own seal to a contract which he makes in behalf of the corporation. Ibid. 60. The artificial being, a corporation aggregate, is not, as such, a citizen of the United States; yet the courts of the United States will look behind the mere corporate character, to the individuals of whom it is composed; and if they were citizens of a different state from the party sued, they are competent to sue in the courts of the United States; but all the corporators must be citizens of a different state from the party sued. The same principle applies to the individuals composing a corporation aggregate, when standing in the attitude of defendants, which does when they are in that of plaintiffs. The Commercial and Railroad Bank of Vicksburg v. Slocomb et al., 14 Peters, 60. S. P. Irvine, for the use of the Lumberman's Bank of Warren, v. Lowry, 14 Peters, 393. 61. The legislature of the state of New York, on the 18th of April, 1823, incorporated "The New York and Schuylkill Coal Company." The act of incorporation was granted for the purpose of supplying the city of New York and its vicinity with coal; and the company having, at great expense, secured the purchase of valuable and extensive coal lands in Pennsylvania, the legislature of New York, to promote the supply of usual powers of a body corporate, giving to it the power to purchase and hold lands, to promote and attain the objects of the incorporation. The recitals in the act of incorporation show this power was granted with special reference to the purchase of lands in the state of Pennsyl vania. The right to hold the lands so purchased depends on the assent or permission, express or implied, of the state of Pennsylvania. Runyan v. Coster et al., 14 Peters, 122. 62. The policy of the state of Pennsylvania, on the subject of holding lands in the state, by corporations, is clearly indicated by the act of the legislature of Pennsylvania, of April 6, 1833. Lands held by corporations of the state, or of any other state, without license from the commonwealth of Pennsylvania, are subject to forfeiture to the commonwealth. But every such corporation, its feoffee or feoffees, hold and retain the same, to be divested or dispossessed by the commonwealth, by due course of law. The plain interpretation of this statute is, that until the claim to a forfeiture is asserted by the state, the land is held subject to be divested by due course of law, instituted by the commonwealth alone, and for its own use. Ibid. 63. The supreme court of Pennsylvania having decided that a corporation has, in that state, a right to purchase, hold, and convey land, until some act is done by the government, according to its own laws, to vest the estate in itself, the estate may remain in a corporation so purchasing or holding lands; but such estate is defeasible by the commonwealth. This being the law of Pennsylvania, it must govern in a case where land in Pennsylvania had been purchased by a corporation created by the legislature of New York, for the purpose of supplying coal from Pennsylvania to the city of New York. Ibid. 64. In the case of the Bank of Augusta v. Earle, 13 Peters, 584, and in various other cases decided in the supreme court, a corporation is considered an artificial being, existing only in contemplation of law; and being a mere creature of law, it possesses only those properties which the charter of its creation confers upon it, either expressly, or as incidental to its very existence. Corporations created by statute must depend for their powers, and the mode of exercising them, upon the true construction of the statute. Ibid. 65. A corporation can have no legal existence out of the sovereignty by which it is created, as it exists only in contemplation of law, and by force of the law: and when 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. But although it may live and have its being in that state only, yet it does not follow that its existence there will not be recognised in other places; and its residence in one state creates no insuperable objection to its power of contracting in another. The corporation must show that the law of its creation gave it authority to make such contracts. Yet, as in the case of a natural person, it is not necessary |