General observations. Similarity of CORPORATIONS. These associations, being the creations not of private will but of public authority, fall to be regulated rather by the constitutional laws of the empire than by the systems of private or municipal law. When they are the creatures of statute, they possess any privileges amounting to aggression or monopoly which the Legislature, in the plenitude of its power, may choose to confer; nor can these be in any respect limited by the usages of the common law. When, again, they owe their origin to prerogative, the rights and privileges they enjoy can never exceed what the principles of the constitution empower the Crown to confer. In considering, therefore, the law of corporations, a distinction must be made between the practice of remoter times, and what must be held to be law since the constitution has settled into its existing form. Corporations may, it is true, continue to enjoy privileges of the most invidious nature conferred on them by competent authority in remote ages, until deprived of them by Act of Parliament; but when it is asked what privileges can now be conferred otherwise than by the Legislature, regard must be had simply to the existing state of the constitution, and precedents prior to the Revolution are of no importance whatever. These considerations lead to the inference that, apart from special legislation, the existing law of corporations is at the present day substantially the same in Scotland as in England. Exclusive privileges, aggressive powers, the right of framing bye-laws binding on the public, and even what are termed the naturalia of a corporation, have all a tendency to affect more or less directly the liberty of the subject, or the general rights of the community. Now it cannot be supposed, a priori, that the law regulating the creation or management of associations vested with rights and privileges of this kind should differ in England and Scotland. Such an assumption would infer a difference in constitutional law; and therefore we may reasonably conclude, that whatever anomalies the old law of Scotland might exhibit in this respect prior to the Union, they have long since ceased to exist either by disuse or by legislative action. history. The substantial identity of the English and Scottish law of Similarity of corporations is strongly evidenced by their respective histories. Both may be traced back to a period when the laws of the two countries were extremely similar (a). In both, corporations could originally be erected only by the Legislature, or, within certain limits, by the royal authority (b). In both, this power came to be assumed by powerful subjects, as feudalism culminated in the appearance of extensive palatinates (c). In both, the Sovereign made similar attempts to do by prerogative what could only be done by Act of Parliament-investing corporations with monopolies and exclusive privileges (d); authorizing individuals or corporations to erect other corporations (e); empowering corporations to make bye-laws, binding not only on their own members, but on the public (f). In both, these irregularities and usurpations came ultimately to be resisted, and were brought to an end either by legislative action, or by the silent but resistless pressure of constitutional government. In Scotland, their disappearance was slower and less marked, because the shade of a despotic government, which received its death-blow at the Union, still continued to haunt our tribunals to a much later period. authorities. The principles of corporation law have never in Scotland been Scotch elaborated by the same endless variety of application, nor sifted with the same minute accuracy of research, as in England. Hence the existing materials available for ascertaining the Scottish law on this subject are far more meagre than could be desired; and much remains in this country shadowy and indistinct, which has long since in England assumed clearness and precision, by the assiduity (a) Regiam Maj. Quoniam Attachiamenta; Ersk. i. 1, 33. (b) Year-B. 49 Edw. III. fol. 4, per Candish, J.; Com. Dig. Franchise, F. 2; Madox Firma. Burg. 26; Ersk. i. 7, 64. (c) Erections of corporate bodies by Lords of Regality, Ersk. i. 4, 30; and by Lords of Palatinate, vid. 1 T. R. 582; and Goodyer v. Shaw, Styl. 298. See Grant on Corp. pp. 11 et seq.; see also C First Report of Corporation Com. (d) See stat. 1641, c. 76; 1 Bell's (e) 'Seals of Cause,' Ersk. i. 7, 64, Ivory's note; Bell's Prin. s. 2183; Ross's Bell's Dict. 744; Grant on Corp. 12. (f) See University of Glasgow v. Physicians and Surgeons, 1840, 1 Rob. App. 397; Grant on Corp. 76-7. Mercantile corporations. Creation of corporations. Royal charter and special act. of the tribunals in working out and applying the maxims of the constitutional law. Yet the few and scattered dicta of our institutional writers, coupled with the decisions in reported cases, can leave no doubt in the mind of the impartial inquirer, that, as might be expected, the outline and general principles and spirit of the Scottish and English systems are identical. In unimportant details, in technical phraseology, in manner of remedy, differences of course present themselves. But in all other respects they seem to differ no further than any two systems will differ, where, principles and spirit being identical, the one has carried them out by logical sequence to their necessary results in an immense variety of practical details, while the other, labouring in a more circumscribed field, has hitherto left much of this process unaccomplished. These observations apply principally to corporations aggregate; and are more especially applicable to corporations of this kind formed for the purposes of gain, which alone fall within the limits of this treatise. When understood with these limitations, their accuracy would seem well established; for whatever differences may be conceived to exist between the English and Scottish laws as applicable to corporations erected for municipal, legal, scholastic, or social purposes, no differences seem discoverable in the law applicable to incorporated joint-stock companies beyond technical details, phraseology, or modes of remedy. A corporation is a body politic created by public authority for special purposes, and endued with certain capacities, in virtue of which it is in contemplation of law a proper person, capable in many respects of willing and acting like an individual. In modern times, corporations can be constituted in one of two ways only, viz. by charter from the Crown, or by Act of Parliament. Formerly, both in England and Scotland, the Crown was in use to delegate its powers to certain of the nobility to erect corporations; but this practice, as being obviously incompatible with public policy, has long since been abandoned. It was also usual to empower royal burghs, universities, and the like, in their charters of erection, to constitute subordinate corporations. This in ScotSeals of cause. land was done by a 'seal of cause. But for similar reasons this custom has long since gone into complete desuetude, and could not statutes. now be competently exercised (a). Corporations are erected by Many corporations now exist whose instruments of erection are Prescription. no longer extant. In such cases they are sometimes said to exist by prescription (c). There is, however, an inaccuracy of theory lurking in this statement. No public right can ever be acquired by usurpation, however long continued. It is more correct to say, that where a body is found exercising the powers and privileges of a corporation time out of mind, the law presumes that it had originally been duly incorporated by competent authority, though the instrument has since fallen aside (d). Corporations are also said to exist by implication. Thus a Implication. body constituted by proper authority may be held to be a corporation, though its instrument of formation does not bear this per expressum, if the purposes for which it was formed cannot be carried into effect without implication of the corporate character (e). sole and Corporations are either sole or aggregate. Corporations sole Corporationsreside in and infer a perpetual succession of single persons. The aggregate. most familiar examples of these in the law of Scotland are the Sovereign, the minister of a parish, and some public officials (ƒ). Corporations aggregate, sometimes also, though improperly, styled communities, include a number of persons known as the corporators (a) Ross's Bell's Dict. 744; Bell's Prin. 2183; Brown's Synopsis 315, 404; M. 2007; Mowat v. Tailors of Aberdeen, 1825, 4 S. 53; supra, p. 33; Grant on Corp. 12. (b) Governor and Company of the Bank of England, 5 W. and M. c. 20, charter dated July 27, 1694; Royal Bank of Scotland, 1727. (c) Grant on Corp. 6. (d) Shaw's Bell's Prin. s. 2177; Dempster v. Masters and Sea. of Dun- (e) Jefferys v. Gurr, 2 B. and Ad. (f) Shaw's Bell's Prin. 2176; Grant on Corp. 6. Corporate name. Seal. Corporation property. or members, and often, in trading corporations, as the shareholders. It is said in England, that a corporation aggregate may consist of two members only (a). But it is very doubtful if this is law in Scotland. Without three the corporate will cannot be expressed by a majority; hence the maxim of the civilians, Tres faciunt collegium (b), a principle apparently recognised in the law of Scotland (c). Corporations sole and corporations aggregate are entirely distinct from each other. A corporation sole cannot become a corporation aggregate by assuming additional members; nor can a corporation aggregate become a corporation sole by diminution of numbers (d). A corporation ought to possess a name under which it does all corporate acts, and in which it sues and is sued, in the absence of a provision to do so in the name of an official (e). The possession of such a name is strong evidence of the corporate character, and is conferred by the charter or act of incorporation. The want of this will not, however, in Scotland be fatal to an old society claiming corporate privileges (f); it may be acquired by reputation (g) apparently even in England. The right to possess a common seal by which to authenticate their deeds, conveyances, acquittances, etc., is one of the naturalia of a corporation (h). As this mode of authentication has now fallen in Scotland into great disuse, the privilege is of little importance. Its use has, however, of late years been rendered imperative in some instances by Act of Parliament (i). Corporations, being in law proper persons, are entitled to hold not only moveables, but lands, in the corporate name—in which name also they are infeft. The members have no right in the corporate property, either joint or several. It is vested solely and exclusively in the person of the corporation, and cannot be attached (a) Grant on Corp. 48. (b) Dig. 1. 50, t. 16, de verb. signif. 85. (c) See Chapter on Suing and being Sued, and Rankeillar v. Mag. of St Andrews, 1693, 4 Brown's Sup. 64; London and Edinburgh Shipping Co., 1841, 3 D. 1045. (d) Anderson v. Campbell, 1736 (Elch. Jur. No. 9), was a case of circumstances, and is of doubtful authority. (e) Whitehaven and Furness Ra., 1848, 10 D. 1127. See Grant on Corp. 50. (f) University of Glasg. v. Fac. of Phys. and Sur., supra. (g) Vin. Abr. Corporations, E. pl. 14; Ayray's case, 3 Salk. 103. (h) Ersk. i. 7, 64. (i) Companies Clauses Act, and some special acts. |