Corporations are divided into aggregate and sole. (a) A corporation sole consists of a single person, who is made a body

Percy v. Millaudon, 20 Martin, 68, directors of a bank were held personally responsible to the stockholders for gross negligence or wanton disregard of duty. The statutes of Michigan, in 1837, 1838. go further, and make the directors liable for the amount of indebtedness of an insolvent bank; and stockholders are made liable, secondarily, in proportion to the amount of their stocks. See Angell & Ames on Corporations, pp. 546-564, 3d edit., relative to the personal responsibility of corporators under state

statutes.

In England, the statute of 4 and 5 William IV. ch. 94, reciting 6 Geo. IV. ch. 91, by which the king was enabled to render the members of any corporation, thereafter created, individually liable for its contracts, enacted that the king, after three months' notice in the gazette of his intention, might, by letters-patent, grant to any company or associa tion, for any trading, charitable, literary, or other purpose, corporate powers, subject to such conditions for the prevention of abuses in the management of their affairs, the security of creditors, and the protection of the public, as the king may see fit to impose; but no execution upon any judgment or decree to issue without special leave of the court, after notice of the persons to be charged, nor after the expiration of three years after such person shall have ceased to have been a member of the company. See, also, infra, vol. iii. p. 27, note. By the statutes of 8 and 9 Vict., for consolidating in one Act the provisions respecting the constitution of incorporated companies, ch. 16-18, shareholders are liable individually to the amount of their shares, and no further. In New York, not only in manufacturing incorporations under the general Act of March 22, 1811, ch. 67, but in several of the charters of fire insurance companies, there is a provision, that, in respect to the debts of the company contracted before the corporation expires, the persons composing the corporation at the time of its dissolution shall be individually responsible to the extent of their respective shares in the funds of the company. By this means a stockholder, according to some recent decisions, incurs the risk not only of losing the amount of stock subscribed, but of being liable for an equal sum, provided the debts due at the time of the dissolution require it. See Briggs v. Penniman, 1 Hopk. 300; S. C. 8 Cowen, 387; and see infra, p. 312. The tendency of legislation and of judicial decisions in the several states is to increase the personal responsibility of stockholders in the various private corporate institutions, and to give them more and more the character of partnerships, with some of the powers and privileges of corporations. In Angell & Ames on Corporations, ch. 17, 3d edit., the extent of the personal liability of the members of a private corporation for the debts of the company is fully examined.10

(a) Co. Litt. 8 b. 250 a.

When the statute provides that an execution against the corporation may be levied on any member, a suit must be regularly brought and carried to execution against the corporation before the members are liable. Dauchy v. Brown, 24 Vermont, 197. See, also, Grose v. Hilt, 36 Maine, 22; Mackenzie v. Railway Co. 28 Eng. L. & Eq. 216.

10 A corporator de facto, cannot set up defects in the process of organizing the corporation to defeat his individual responsibility to the creditors of the corporation. Eaton v. Aspinwall, 19 N. Y. 119. Nor when one is induced by false and fraudulent reports of directors to become a stockholder, can he defend himself on that ground from responsibility to creditors of the company. Mixer's case, 4 De G. & J. 575, overruling Brockwell's case, 4 Drew. 205; Nicols's case, 3 De G. & J. 387; and see Worth's case, 4 Drew. 529. But if there be only a

corporate and politic, in order to give him some legal capacities and advantages, and especially that of perpetuity, which, as a natural person, he cannot have. A bishop, dean, parson, and vicar, are given in the English books as instances of sole corporations; and they and their successors in perpetuity take the corporate property and privileges; and the word successors is generally as necessary for the succession of property in a corporation sole, as the word heirs is to create an estate of inheritance in a private individual. (b) A fee will pass to a corporation aggregate,

(b) Co. Litt. 8 b. 9 a. There are instances in this country of a minister of a parish seised of parsonage lands in the right of his parish, being a sole corporation, and of county and town officers created sole corporations by statute. Angell & Ames on Corporations, 3d. ed. 25.

contract to become a shareholder, misrepresentation in reports or prospectuses will afford a defence. New Brunswick & Can. R. v. Muggeridge, 1 Drew. & Sm. 363. Ashpitd v. Sercombe, 5 Exch. 147. Nockels v. Crosby, 3 Barn. & Cress. 814. Stockholders, it has been held, who are "jointly and severally liable" for the corporation's debts, are principal debtors, and not sureties; and therefore not discharged, by time having been given to the corporation by the creditor. Harger r. McCullough, 2 Denio, 119.

A creditor of a corporation, of which the charter renders the stockholders personally liable for its debts, is not affected in his rights against the stockholders, by an arrangement between the corporation and the stockholder, reducing and relinquishing the number of shares subscribed. Mann v. Pentz, 2 Sandf. Ch. 257. Mann v. Currie, 2 Barb. (N.) Y. 294.

Where a corporation incurred debts exceeding three times the amount of its capital, contrary to Rev. Stat. (vol. i. 604, sec. 3,) it was decided that the directors, under whose administration this amount of debt was incurred, were personally liable, not only to creditors whose debts were contracted during the existence of their excess of corporate debts, but to any creditor after any lapse of time. Tallmadge v. Fishkill Iron Co. 4 Barb. (N. Y.) 382.

There seems to be some conflict as to when the liability of a stockholder begins and ends. In Bank v. Burnham, 11 Cush. 183, it is held that a member is liable for debts contracted during his membership even after selling his shares. For debts contracted before his membership, he ceases to be liable on ceasing to be a member. See, also, Hill v. London Assurance Co. 38 Eng. L. & Eq. 407.

In Connecticut, only those are liable for corporation debts who hold stock when the action is brought. Middletown Bank v. McGill, 5 Conn. 28.

In New York, it seems to be unsettled who are to be considered members and liable for the company's debts. See McCullough v. Moss, 5 Denio, 567; U. S. Trust Company v. U. S. Fire Insurance Co. 18 N. Y. (4 Smith) 199.

In New Hampshire, under the statutes, stockholders are, in general, liable only for debts of the corporation contracted while they are stockholders. Chesley v. Pierce, 32 N. Hamp. 388.

As to personal liability of stockholders for debts of the corporation contracted out of its legitimate business, see Kearney v. Buttles, 1 Ohio, 362.

A fraudulent assignment of stock to evade liability is void as against creditors. Dauchy v. Brown, 24 Vermont, 197.

Where it is provided, in a promissory note of a corporation, that the personal property of stockholders shall not be liable, the liability of the corporation is not thereby affected. Smith v. Eureka Flour Mills, 6 Cal. 1.

without the word successors in the grant, because it is a body, which, in its nature, is perpetual; but, as a general rule, a fee will not pass to a corporation sole, without the word successors, and it will continue for the life only of the individual clothed with the corporate character. (c) There are very few points of corporation law applicable to a corporation sole. They cannot, according to the English law, take personal property in succession,

and their corporate capacity, in that respect, is confined *274 to real property. (d) The corporations generally in use

with us are aggregate, or the union of two or more individuals in one body politic, with a capacity of succession and perpetuity. Besides the proper aggregate corporations, the inhabitants of any district, as counties, towns, and school districts, incorporated by statute, with only particular powers, are sometimes called quasi corporations. No private action for neglect of corporate duty, unless given by statute, lies against them, as such a corporation. Having no corporate fund, each inhabitant is said to be liable to satisfy the judgment, if the statute gives a suit against such a community. (a)

Another division of corporations, by the English law, is into ecclesiastical and lay. The former are those of which the members are spiritual persons, and the object of the institution is also spiritual. With us they are called religious corporations. This is the description given to them in the statutes of New York,

(c) Co. Litt. 94 b. and notes 46 and 47 to Co. Litt. lib. 1. Viner, tit. Estate, L. (d) 1 Kyd on Corp. 76, 77. Co. Litt. 46 b. But, by statute, a corporation sole may be enabled to take personal as well as real property by succession; and a treasurer or collector, for instance, is sometimes created a corporation sole, or quasi corporation, for the purpose of taking bonds and other personal property to him in his official character, and of transmitting the same to his successor.

(a) Russell v. The Men of Devon, 2 Term Rep. 667. Riddle v. Proprietors of Locks, &c., on Merrimack River, 7 Mass. 187. Parsons Ch. J., Merchants' Bank v. Cook, 4 Pick. 414. Adams v. Wiscasset Bank, 1 Greenl. 361. Chase v. Merrimack Bank, 19 Pick. 569. In the case of The Attorney-General v. Corporation of Exeter, (2 Russell, 53,) Lord Eldon held, that if a fee-farm rent was chargeable on the whole of the city, it might be demanded of any one who holds property in it, and he would be left to obtain contribution from the other inhabitants.

Where shares in a company, whose members were liable for corporate debts, were sold, with a covenant against incumbrances, held that the covenant was broken, if at the time of the sale the assets of the corporation were less than its debts. Clark v. Perry, 30 Maine,

Ohio, and other states, providing generally for the incorporation of religious societies, (b) in an easy and popular manner, and for the purpose of managing, with more facility and advantage, the temporalities belonging to the church or congregation. Lay corporations are again divided into eleemosynary and civil. An eleemosynary corporation is a private charity, constituted for the perpetual distribution of the alms and bounty of the founder. In this class are ranked hospitals for the relief of poor, sick, and impotent persons, and colleges and academies established for the promotion of learning and piety, and endowed with property, by public and private donations. (c) Civil corporations are established for a variety of purposes, and they are either *275 public or private. Public corporations are such as are

*

created by the government for political purposes, as counties, cities, towns, and villages; they are invested with subordinate legislative powers, to be exercised for local purposes connected with the public good; and such powers are subject to the control of the legislature of the state. (a)1 They may also be empowered

(b) Act of New York, April 5, 1813, ch. 60; of Ohio, February 5, 1819.

(c) 1 Blacks. Com. 471. 1 Kyd on Corp. 25–27. 1 Lord Raym. 6, 8. 1 Vesey, 537. 9 Vesey, 405. 1 Burr. 200. Lord Holt, in Phillips v. Bury, cited in 2 Term Rep. 353. Dartmouth College v. Woodward, 4 Wheaton, 681.

(a) The People v. Morris, 13 Wendell, 325. They are common in every state. One of the first acts of the General Assembly of Connecticut, 1639, was the incorporation of all towns in the colony with town privileges for local purposes, such as choosing officers and magistrates for holding local courts, and to provide for durably keeping a registry of deeds and mortgages, and for the maintenance of schools and public worship. The establishment of towns with corporate powers, as local republics, was the original policy throughout New England, and it had a durable and benign effect upon the institutions and moral and social character of the people. M. de Tocqueville, in his De la Democratie en Amerique, tom. i. pp. 64, 96, appears to have been very much struck with the institutions of New England towns. He considered them as small, indepen dent republics, in all matters of local concern, and as forming the principle of the life of American liberty existing at this day.

1 A right as a corporator in a religious society is obtained by stated attendance on divine worship, and contributing to its support, in a mode usual in the congregation. Cammeyer v. United German L. Churches, &c., 2 Sandf. Ch. 186. For the power of religious corporations to hold land, under the New York Acts, see Tucker v. St. Clement's Church, 3 Sandf. (N. Y.) 242.

1 Where the city authorities had united with a committee of citizens to call a meeting for the consideration of national affairs, and by the firing of cannon, not authorized by the city authorities, a person was injured, it was held that the city was not liable. Boyland v. The Mayor, &c., of New York, 1 Sandf. (N. Y.) 27. A municipal corporation cannot be made liable

to take or hold private property for municipal uses; and such property is invested with the security of other private rights. (b) So corporate franchises attached to public corporations are legal estates coupled with an interest, and are protected as private property. If the foundation be private, the corporation is private, however extensive the uses may be to which it is devoted by the

(b) Angell & Ames on Corporations, 3d edit. 30. These local corporations, as cities and towns, can sue and be sued; and the judicial reports in this country, and especially in the New England states, abound with cases of suits against towns, in their corporate capacity, for debts and breaches of duty for which they were responsible.

for an injury arising from a defect in the execution of the corporation ordinances; as for an injury inflicted by a swine in the streets, where swine were prohibited running at large; Levy v. The Mayor, &c., of N. Y. Ib. 465; nor for injuries caused by a mob; Prather v. Lexington, 13 B. Mon. 559; nor for damages caused by a contractor's workmen in grading the streets; Kelly v. Mayor, &c., of N. Y. 1 Kernan, 432; nor for acts of citizens, obstructing the streets when the officers have had no notice; Griffin v. Mayor, 5 Seld. 456. As to notice, see Winn v. Lowell, 1 Allen, 177. But see Lacom v. Mayor, 3 Duer, 406; Blake v. Ferris, 1 Seld. 48; Lloyd v. Mayor, Ib. 369, where, the injuries being caused by persons in the employ of the city or its agents, the corporation was held liable. Hutson v. Mayor of N. Y. 5 Seld. 163; Storrs v. City of Utica, 17 N. Y. 104, and also, Nebraska City v. Campbell, 2 Black (U. S.) 590; Chicago City v. Robbins, 2 Black (U. S.) 418. The ordinary powers of a municipal corporation does not authorize the common council to furnish a dinner for the citizens and guests at the public expense; Hodges v. The City of Buffalo, 2 Denio, 110; nor to appropriate money for the celebration of Independence Day; and an injunction was properly granted to restrain such an act; New London v. Brainerd, 22 Conn. 552.

The powers of municipal corporations are discussed in the case of City Council v. Ahrens, 4 Strobh. 241, and Same v. Baptist Church, 4 Strobh. 306. Ordinances prohibiting the sale of intoxicating liquors, and restraining intermural interments, were held to be constitutional and valid.

Municipal corporations are not liable for consequential damages resulting from their opening and grading, with proper care and skill, public streets, in pursuance of their chartered powers. Radcliff v. The Mayor, 4 Comst. 195. Plant v. Long Island Railroad, 10 Barb. (N. Y.) 26. Adams v. Saratoga & W. Co. 11 Barb. (N. Y.) 454. Nor are towns, in New York, liable for not repairing roads. Morey v. Newfane, 8 Barb. (N. Y.) 645.

Though the judicial tribunals have no authority to interfere with the police regulations of a municipal corporation, yet such corporations have no more right than a private individual to erect a nuisance upon their lands, and an injunction will be granted to restrain such act. Brower v. The Mayor &c., of N. Y. 3 Barb. (N. Y.) 254. They are liable for the negligence and unskilfulness of their agents. Lloyd v. The Mayor, 1 Seld. 369. Meares v. Com. of Wilmington, 9 Ired. (N. C) 73. See supra, p. 281, n. 2. Mayor of Memphis v. Lasser, 9 Humph. 757. Akron v. McComb, 18 Ohio, 229. See further, post, 291, 334-5. And in New York it has been decided, by the Supreme Court, that they may be restrained by injunction from misuses of corporate powers. People v. Mayor of New York, 32 Barb. (N. Y.) 102.

The power of a municipal corporation, like the Mayor, &c., of N. Y., to grant exclusive and perpetual privileges in the nature of franchises was denied, and the powers of the city government, its subjection to the authority of the courts, and the effect of an injunction upon its acts, were discussed at great length in the recent cases arising from the establishment of street railroads. See Millhau v. Sharp, 15 Barb. (N. Y.) 193; 17 Barb. (N. Y.) 435; Davis v. Mayor, 1 Duer, (N. Y.) 451; Att'y-Gen. v. Mayor, 3 Id. 119; People v. Sturtevant, 5 Seld. 263.