Page:Encyclopædia Britannica, Ninth Edition, v. 6.djvu/465

CORPORATION 433 bishops of Durham granted a charter of incorporation to the city of Durham in 1565, 1602, and 1780, and the last was the charter in operation up to the passing of the Municipal Corporations Act. The charter of a corporation is regarded as being of the nature of a contract between the king and the corporation. It will be construed more favourably for the Crown, and more strictly as against the grantee. It cannot alter the law of the land, and it may be surrendered, so that, if the surrender is accepted by the Crown and enrolled in Chancery, the corporation is thereby dissolved. The use made of this power of the Crown in the reigns of Charles II. and James II. will be familiar to most readers, Chartered corporations were originally held to be ex necessitate immortal ; only a statute could give a society corporate privileges to ensue for a limited time. But now, by 1 Viet. c. 77 29, the Crown may incorporate for any period. Every corporation, it is said, must have a name, and it may have more names than one, but two corporations cannot have the same name. And corporations cannot change their name save by charter or some equivalent authority. The possession of a common seal, though, as already stated, not conclusive of the corporate character, has been held to be an incident of every corporation aggregate. The inns of courts have common seals, but they are only voluntary societies, not corporations. Generally speaking, all corporate acts affecting strangers must be performed under the common seal ; acts of internal administration affecting only the corporators, need not be under seal. The rule has been defended by high judicial authority as following necessarily from the impersonal character of a corporation ; either a seal or something equivalent must be fixed upon so that the act of the corporation may be recognized by all. In the matter of contracts, however, the strict rule of law has been found untenable. A large exception has long been recognized by the courts. In cases of convenience almost amounting to necessity," the use of the seal will not be necessary in orier to bind a corpora tion. Examples given in the old cases of such convenience are the retainer of an inferior servant, authority to make a distress, or drive away cattle damage feasant, &c. This exception has been extended in different degrees in different classes of corporations. In trading corporations it has been lately held that it will include all contracts entered into forthe purposes for which the society was incorporated, and will not be limited to matters of constant occurrence or small importance. In other corporations the same latitude does not appear to be encouraged by the decisions. Goods of a kind which must have been necessary from time to time, and actually supplied to a corporation under a contract not sealed, may be sued upon. But an engagement as clerk to a workhouse was held not binding on a board of guardians because not under their seal. And where a municipal corporation caused some tolls to be let by auction, they were not allowed to recover on the contract because it was not under their seal. And work done for local im provements, under an unsealed contract, was held to give no claim against a corporation. In such cases the fact of the contract being executed makes no difference as against the corporation, but where the corporation has executed an unsealed contract, it may recover thereon. The somewhat unsatisfactory principles as to the dissolu tion of corporations are not now of much practical import ance. A corporation may of course be abolished by statute, but not by the mere authority of the Crown. It is held that a corporation may become extinct by the dis appearance of all its members or of any integral part, or by surrender of charter if it is a chartered society, or by process of law for abuse of powers. In such cases, the real property of the corporation will go to the heir of the founder, and the personal property as bona vacantia to the Crown. Corporations created by statute cannot surrender, nor will they be suffered to avoid elections so as to become extinct for want of members. The power of the majority to bind the society is one of the first principles of corporation law, even in cases where the corporation has a head. It is even said that only by an Act of Parliament can this rule be avoided. The binding majority is that of the number present at a corporate meet ing duly summoned. Votes given for an illegal purpose or a disqualified person are considered as thrown away, and in an election votes must be given for some particular candidate, if they are merely against a candidate, they are void. In corporations which have a head (as colleges), although the head cannot veto the resolution of the majority, he is still considered an integral part of the society, and his death suspends its existence, so that a head cannot Sevise or bequeath to the corporation, nor can a grant be made to a corporation during vacancy of the headship. A corporation has power to make such regulations (by laws) as are necessary, for carrying out its purposes, and these are binding on its members and on persons within its local jurisdiction if it has any. Such by-laws must not be at variance with the law of the land, nor retrospective in their operation, nor. unreasonable. They must further be in harmony with the objects of the society, and must not infringe or limit the powers and duties of its officers. A by law to compel the giving of a dinner was held to be invalid unless it could bs shown that the interest of the corpora tion was to be promoted thereby. The power to acquire and hold land was incident to a corporation at common law, but its restriction by the statutes of mortmain dates from a very early period. The English law against mortmain was dictated by the jealousy of the feudal lords, who lost the services they would other wise have been entitled to, when their land passed into the hands of a perpetual corporation. The vast increase in the estates of ecclesiastical corporations constituted by itself a danger which might well justify the operation of the restricting statutes. Accordingly, in Magna Charta (9 Hen. III. c. 36) there is a clause against the granting of land to religious houses. The statute 7 Edward I. st. 2, c. 1 (De Religiosis), and the Statute of Westminster the Second extended by 15 Ricbard II. c. 5, prohibited corporations from buying land in mortmain under penalty of forfeiture. The next lord might enter within a year, and each succeeding lord had half a year, and for default of intermediate lord the king should have the lands for ever. If the king and the lords waived their rights, the corporation could hold the land without question. Hence a practice grew up for the king to grant to a corporation a licence to hold the lands given to it ; and this, although, strictly speaking, a waiving of the king s rights, was in course of time held sufficient to bar the mesne lord s right also. Its power to do so was expressly confirmed by 7 and 8 Will. III. c. 37, not that there was any doubt about it in practice, but to avoid the hateful example of anything like a power in the Crown to suspend the laws. A licensed corporation can hold lands to the extent of its licence. The Mortmain Acts applied only to cases of alienation inter vivos. There was no power to devise lands by will until 32 Henry VIII. c. 1 (explained by 34 and 35 Henry VIII. c. 5), and when the power was granted corporations were expressly excluded from its benefits. No devise to a corporation, whether for its own use or in trust, was allowed to be good ; land so devised went to the heir, either

absolutely or charged with the trusts imposed upon it in