Page:Henry Osborn Taylor, A Treatise on the Law of Private Corporations (5th ed, 1905).djvu/35

CHAP. II.] CORPORATIONS IN THE COMMON LAW. [§ 22e. poses subserved, but also with regard to differences in mode of creation and in legal status, corporations are divided into pub- lic (or municipal) and private. This division is of great im- portance in American corporation law. A public corporation is part of the government ; its liabilities in tort and contract are qualified and limited by a number of legal principles ; there is no contractual relationship between it and the state, nor among its members ; and ordinarily the legislative power may abolish it at will. On the other hand, a private corporation although engaged in enterprises in which the public or the state is interested, is not a part of government; a contractual rela- tionship exists among its members and may exist between it and the state ; the state may have no more and may have even less control over it than over other private enterprises ; and its lia- bilities in tort and contract approximate to those of natural per- sons acting without corporate organization. § 22d. Accordingly, adhering to the division into public and private corporations as the one which is of practical im- portance, we may speak of the different kinds of private corpo- rations. These would include charitable corporations, above mentioned ; also colleges and other incorporated institutions of learning, save those which are administered by the state or town or school district, and supported by taxation. In our country where there is no " established church," private corpo- rations would also include ecclesiastical, or to use the term more usual at present, religious corporations; they would finally embrace every kind of incorporated social club and benefit society. § 22e. The above are examples of private corporations not created for the pecuniary profit of their members. On the other hand a vast number of private corporations are formed for this. purpose, whatever advantage to the public may be ex- pected from them. Such corporations might be called broadly business corporations, though in practice, that term is not usu- ally applied to railroad companies, nor to banks and insurance companies. These three classes of corporations are important. Railroad companies offer the chief examples of the large pri- vate corporation which has duties towards the public, and for that purpose receives special privileges, like the right of emi- nent domain. For these reasons they have even been loosely 15