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fictitious will and acts of some one or more individuals, imputed, however, not to them as natural persons, but to the body corporate, which is endowed with personality for the very purpose of being treated as if it had a will of its own, and were capable of acting or not acting more or less after the fashion of mankind.
Obvious as this is when stated, the English Law seems to have ignored the truth that there is no resemblance, and but a remote analogy, between the will of a corporation and the will of an ordinary individual. It has, in fact, been customary to style both persons, and attributes belonging solely to human beings, seem tacitly to have been supposed to belong to corporations as distinguished from the individuals composing them.
The nature of a corporation being ascertained, the question, whether any act or omission confers a right or imposes a liability on a corporation becomes resolved into two others, viz. :
First-Who did or omitted to do the act ?
Secondly-Supposing the corporation to be an individual, is there any recognised legal principle or sound analogy by virtue of which the supposed individual would be responsible for the act so done or omitted by another ?
With respect to the first of these questions, the person or persons whose acts or omissions can be imputed to the body corporate must be, in the first instance, those to whom the management of the affairs of the corporation is, by its constitution, intrusted. Afterwards there may be other persons appointed by the first in the exercise of the express or implied powers with which they are endowed. But no one else can be considered as in any way representing the body corporate. A stranger cannot represent it; because there is no more connection between him and it, than between him and another individual with whom he has no concern. Nor can any one or more individual corporators merely as such ; because the very thing that characterizes a corporation is, that it is, juridically speaking, distinct from the individuals composing it. By no legal principle, therefore, can the conduct of any person be imputed to a corporation, unless he is authorized to act in its
behalf, either immediately by the act of incorporation, or mediately by appointment under some express or implied powers thereby conferred.
This brings us to the second question; namely, the principle on which the acts and omissions of these persons are imputed to the body corporate. That to some extent, or under some circumstances, their acts and omissions must be deemed those of the corporation is obvious, for otherwise a corporation could not fulfil the purposes for which it is created.
It cannot be too often repeated, nor too steadily borne in mind, that the capacity of a corporation is determined by the power which creates it. Some jurists have argued from this that corporations can do no wrong; for being created for some legal purpose only, they can, it is argued, have no capacity to do what is illegal. A little consideration will, however, show the fallacy of this. For, suppose a corporation is created for the performance of certain acts. It is, then, under an obligation or duty to do those acts; and, if it does not perform them as required, it obviously does that which is illegal. Το say that a corporation can do no wrong, is, in fact, tantamount to saying it has no duties or obligations to perform: such a doctrine is as untenable in theory as it is dangerous in practice. But, admitting that unlawful as well as lawful acts must be inputable to corporations, it still remains to consider the limits of this doctrine, and for this purpose it will be convenient to separate criminal from civil responsibility.
First.-A's regards crimes. Can a corporation be guilty of a crime ? Some jurists say “yes;” but “no” seems to be the proper answer to the question. No one is responsible for a crime who is not personally party or privy to it. Crime is never imputed to any one by a fiction, but it is only by a fiction that a corporation can be deemed guilty of a crime.
a To contend that a corporation can be guilty of a crime, is therefore to contend for that in the case of a corporation which has no analogy in the case of ordinary individuals. Nor would there be any use in establishing such a doctrine, The object of criminal laws is to punish. Punishment, to be
effectual, must fall on beings who can feel; in the case of corporations, therefore, it should fall on the individuals who have been guilty of the crime perpetrated. Nor ought they, nor can they, on any principle be screened from punishment on the ground that the guilt is imputable to the corporation ; for, admitting that to be so, they are not the less also punishable, having, ex hypothesi, themselves committed the criminal acts in question. Those who maintain that corporations can commit crimes, are driven to make exceptions; for no jurist asserts that adultery or bigamy can on any principle, or by any analogy, be imputed to bodies corporate. On the other hand it must be acknowledged that corporations may be guilty of offences, the remedy of which is a public prosecution, e. g., the non-repair of a highway. But such acts are not crimes in any accurate sense of the word; and using the term, criminal law, in its natural and popular sense, it may fairly be said that it has no application to any except natural persons.
Secondly. As to civil responsibility. Capacity to acquire rights and incur obligations does not always depend on a de facto exercise of will, for that capacity is attributed to infants and lunatics, whose exercise of will is juridically ignored. Again, the law of agency furnishes principles by which the acts of one person may be treated as the acts of another. Now, so far as a corporation is a person, it is a person of limited capacity, the conduct of whose affairs is intrusted to others. By the constitution of the corporation the persons thus intrusted, be they few or be they many, are the agents of the corporation, which is as it were a principal, giving to those persons all powers and authorities necessary for the accomplishment of the ends for the attainment of which the
corporation itself exists. It is then to the law of agency that recourse must be had for the principles which govern the civil liabilities of bodies corporate ; and it only remains to apply this law to torts, contracts, and quasi contracts.
As regards Torts. The ordinary doctrines of the law of agency lead to the conclusion that all torts, of whatever kind, for which a principal, having given such authority as is conferred by the act of incorporation, would be liable, ought, if done by the express or implied authority of the governing body of the corporation, to be deemed corporate acts, and ought to be held to impose liabilities on the corporate body. This has been recognised in Westminster Hall, for it is clear that trespass lies against a corporation. It has indeed been held in the case of Stevens v. The Midland Counties Railway, 10 Exch. 356, that an action for malicious prosecution will not lie against a corporation : and this decision may be supported upon the ground that, even if a corporation could be actuated by bad motives, it would not be civilly liable for the malicious acts of one endowed by it with such powers and authorities as alone can be supposed to be conferred by a corporation.
As to Contracts. No contract can be entered into by a corporation which is ultra vires, or entered into in the exercise of powers and authorities not conferred expressly, or impliedly, by the law creating the body corporate. This follows necessarily from the limited capacity of such bodies. Their capacity is restricted by the object for which they are created, and neither they nor their members can extend that capacity. But, subject to this qualification, it necessarily follows from the observations already made, that all contracts are in reason imputable to a corporation, provided the will of one of the parties can be shown to be the will of those individuals to whom the management of the corporate affairs is intrusted.
This leads to the consideration of the evidence by which a corporate contract must be shown to exist. The seal had its origin in times when writing was comparatively a rare accomplishment. But no satisfactory reason can be adduced for the English doctrine—that nothing but a seal can be evidence of the corporate will. Suppose that a majority of a duly convened meeting of members are the persons intrusted with the management of the corporate affairs; the will of the corporation will then be the will of such majority; and if so, whatever is evidence of the will of the majority must be evidence also of the will which the corporation is deemed to exercise. Again, suppose that some officers of a corporation, not having power to bind it, enter into a contract on its behalf, and report the fact to a duly convened meeting of its members; that the matter is discussed and approved unanimously, and then that a minute to that effect is formally made, can it be said, in reason, that that ratification ought not to be imputed to the body corporate ? Why is it less the act of the body corporate, than a document sealed by their authority ? Where is the magic of the seal ? It is not denied that a seal is a convenient mark whereby to signify to the world the fact that the document has been finally approved by the proper authorities. But what is contended is, that, to deny validity to contracts similarly approved solely because the seal is absent, is to sacrifice substance to form, and is as unjustifiable in principle as the absurd old English rule which compelled a man to pay his bond twice over, because the first time he neglected to take a release by deed.
The strictness of the rule denying validity to unsealed contracts of corporations is being gradually relaxed. The whole law relating to the subject is obviously in a state of transition; and an attempt is being made, not unsuccessfully, to introduce by way of exception the doctrine that contracts which can be looked upon as incidental to the purposes for which a corporation is created shall be valid, though not under seal. This rule ought obviously to be of general application. In America the strict law requiring in every case the existence of a common seal is wholly exploded, and it is hoped that such will soon be the case in this country also.
Lastly, as to quasi contracts, by which are meant those acts or forbearances which, not being unlawful, give rise to rights and obligations without the intervention of any genuine promise, express or tacit. Such are the obligations which, in the language of the civilians, arise, “ ex re,”by the force of circumstances,” “ utilitatis, æquitatis gratiâ ;" and which are indicated by the maxims “ Qui sentit commodum sentire debet et onus,” and “ Nemo debet locupletari ex alterius incommodo.” The English phrase "implied contracts” is one of too great ambiguity to represent this class of transactions. The right of contribution which exists amongst co-sureties and amongst owners of cargo where goods are thrown overboard, is an instance of a right arising quasi ex contractu, although there