be sustained against a corporation. Goodspeed vs. East Haddam Bank, 22 Conn. 530. Mr. Redfield, in his work on Railways, pp. 288-9, suggests a doubt as to the correctness of the decision in the above case of Hood. The doctrine laid down in that case, carried out to what would seem to be its legitimate results, would warrant the conclusion, that although illegal acts might be committed by an officer of a corporation, within its service and for its benefit, and even to accomplish objects for which it was created, and by the express authorization of its directors, that such acts, not being within the scope of its charter, must be treated as the individual acts of the agents who performed them, and the whole responsibility must be limited to them. It would result from this, as a legitimate consequence, that no action for trespass or other wrongful act would lie against a corporation. This doctrine was at one time held as a general rule; but later decisions, and the more recent legislation and jurisprudence of the States of this Union, have established the opposite conclusion. The principle of representation has been engrafted upon them, and is now treated as a part of their constitution. The powers of the corporation are placed in the hands of the directors. They are appointed by the stockholders, have general charge of the business of the corporation, and appoint the executive officers and agents, who exercise its faculties for the accomplishment of the purposes of its creation. It has been held to be a necessary correlative, to the principle of the exercise of corporate powers and faculties by legal representatives, that a corporate responsibility for the acts of the representatives must be recognized. Corporations are now, generally, held liable for the negli gence and unskillfulness of their agents, in all matters coming legitimately within the scope of their corporate powers. They are not, however, liable for such wrongful acts as are wilful and intentional on the part of the agent. This latter rule embraces acts of such nature that they might, under some circumstances, come within the scope and powers of their agency, and thus admit of effective performance. The fraudulent issue of stock of a railroad corporation, beyond the total amount of stock authorized by its charter, though,. as to form, duly issued by its president and transfer agent, and though it has come by purchase in good faith and for value to the hands of an innocent holder, is void as against the corporation. Mechanics' Bank vs. N. Y. & N. H. R. R., 3 Kernan, 599. SECTION 8. Of the Termination and Dissolution of a Corporation. Corporate powers and functions may be terminated in the following ways: 1. By express legislation. This applies to all, except such private corporations as hold charters which would be held to be contracts. The provision in the National Consti tution, prohibiting any State from passing a law impairing the obligation of a contract, would, of course, prevent State legislation annulling such charter, unless the law by which it was created contains an express reservation of the right so to do. Many charters recently granted contain a provision reserving to the legislature the right to alter, amend or dissolve, at pleasure. The general statutes of most of the States contain a clause. reserving to the legislature such rights, as to all charters. granted after a specified date. 2. By lapse of time. Most charters are granted for a specified period; perpetual charters not being deemed expedient. When the specified period terminates, the corporation is thereby ipso facto dissolved, unless the legislature see fit to continue it; no more of its original functions remaining than are requisite for winding up its concerns. 3. By surrender of its franchises. The acceptance of a charter does not involve an obligation to continue the exercise of its functions and franchises, during the entire period. specified therein. The stockholders may, therefore, surrender their charter at their pleasure, subject, however, to such adverse rights as have been acquired by the public or by private citizens. 4. As to some corporations, by death. This does not apply to stock corporations, because if all the stockholders in one of these should die, the shares would pass to their personal representatives and the corporation still continue; but, in respect to charitable corporations, the case is sometimes otherwise. These may be so constituted that the death of all the members would work a dissolution, for want of means of keeping up the succession. Such a contingency may, however, by the exercise of foresight and care, be provided against in the charter. 5. By forfeiture. A forfeiture of a charter can only be enforced by judicial proceedings. The causes of forfeiture may be included under the two heads of misuse or abuse of the corporate franchises, or non-use or neglect to exercise them. Without any express provision in the charter, either of these, when judicially ascertained, will justify a court in adjudging the charter to be forfeited. The common course in ascertaining and enforcing a forfeiture is, for a creditor or any person aggrieved by its doings to institute process; or the prosecuting attorney of the State may apply, with, or without complaint, to some Court sitting in chancery, for an injunction; and, if acts or neglects amounting to a forfeiture are found by the court, an injunction is issued, restraining the corporation from a further exercise of its functions, and receivers are appointed to wind up its affairs. When a corporation is dissolved, in either of these ways, its debts are to be first paid. The residue of its property should be converted into money and refunded to the stockholders. SECTION 9. Forms of Organization, &c. And first, of organizations under the general statute laws of a State authorizing joint stock corporations. The first thing here is, of course, an agreement between parties to engage jointly in business as a corporation. A general form for such an agreement may be as follows: 1. ARTICLES OF ASSOCIATION OF THE COMPANY. The subscribers hereby associate themselves as a body politic and corporate, in pursuance of the provisions of the statute laws of the State of authorizing and regulating the formation of stock corporations, and adopt the following general articles of association and agreement: 1. The name of said corporation shall be the Company, and its capital stock shall be five hundred thousand dollars, to be divided into shares of dollars each. 2. The purpose for which said corporation is to be organized is, to do business as and to buy and sell, and deal generally in such real and personal estate as may be necessary to the successful prosecution of said busi ness. 3. The principal place of business of said corporation shall be at in said State. 4. Each subscriber hereto agrees to take the number of shares in the capital stock of said corporation set against his name, to be paid for by instalments as called for by the directors hereafter to be appointed. The statutes authorizing such organizations usually authorize the calling of the first meeting, by a notice to be signed by two or more of the corporators, stating the time and place where the first meeting of the corporation shall be held; which notice is usually required to be published in two or more papers of the county in which the corporation is to exist. Such notice may be very simple in form, and would be quite sufficient in the following words: 2. NOTICE OF THE FIRST MEETING OF THE COMPANY. The first meeting of the subscribers to the capital stock of said Company will be held at in the town of on the o'clock in the noon corporation, adopting by laws, choosing directors, and transacting all other business which may, under the statutes of this State, properly be done at said meeting. A waiver of this notice is usually authorized by the regulating statute, and without such authorization would probably be sufficient and effective if signed by all the subscribers. 3. FORM OF WAIVER OF NOTICE. The undersigned, being all the subscribers to the capital stock of the Company, a stock corporation to be organ ized under the statute laws of the State of , hereby unite in calling a first meeting of said Corporation, to be next, at o'clock in the noon; and we severally waive the notice of said meeting called for by the statute laws under which the company is organized. Dated at this day of The instrument of waiver should, in all cases, be entered at full length in the records of the corporation by the secretary. 4. RECORDS. Among the officers usually chosen at such first meeting is a Secretary, who should make it his first business to obtain a proper book and commence a record of the organization and doings of the corporation. The records of a company organized under a general law should commence with a copy of the articles of association and agreement. This, and all other original papers copied into the records, should be attested by the Secretary substantially as follows: The foregoing is a true copy of the original articles of association of the Company. |