PREFACE.

In the preparation of the following treatise upon the principles of the law of Public Corporations it is but fair to state, that the writer has found it no inconsiderable task to do even partial justice to this important branch of jurisprudence within the confines of the limited space allotted.

In treating the extensive subject of Public Corporations I have, at least to my own partial satisfaction, supplied the omission chargeable to nearly all writers upon this branch of law, by more comprehensively elucidating the organization and functions of those involuntary political subdivisions of the State for governmental purposes, denominated Public QuasiCorporations, such as Counties, Townships, School Districts and the like.

The fundamental idea of government in the United States sustains the doctrine, that the people are the source of all political power and possess the unquestioned and settled right to exercise it; this salutary principle forms the foundation stone upon which our political institutions, in all their power and grandeur, rest today, and as the people have the undisputed authority to rule through their chosen representatives, it is not only essential, but almost a condition precedent to a broad and enlightened citizenship to have an acquaintance with the structure and organization of our governmental institutions and the internal arrangement of the public body.

Public corporations in this country are clothed with extraordinary powers, notably the acquisition

and disposition of property; the power to elect their own officers; the authority to make contracts within certain prescribed limitations; the exercise of the sovereign power of Eminent Domain and the levying and collecting of taxes, which latter power is admittedly the highest prerogative of sovereignty.

To emphasize the value and importance to the citizen of a knowledge of this significant branch of American jurisprudence, I quote the following lines from that profound political writer De Tocqueville:

"Local assemblies of citizens constitute the strength of free nations. Municipal institutions are to liberty what primary schools are to science; they bring it within the people's reach; they teach men how to use and enjoy it."

CHAPTER I.

INTRODUCTORY.

CORPORATION DEFINED.

SECTION 1. The comprehensive and remarkable descriptive definition by Chief Justice Marshall in the celebrated Dartmouth College Case is undoubtedly the best known and has been more frequently cited and quoted than any other:-"A corporation is an artificial being, invisible, intangible, and existing only in contemplation of law. Being the mere creature of the law, it possesses only those properties which the character of its creation confers upon it, either expressly or as incidental to its very existence. These are such as are supposed to be best calculated to effect the object for which it is created. Among the most important are immortality (in the legal sense that it may be made capable of indefinite duration), and, if the expression may be allowed, individuality, properties by which a perpetual succession of many persons are considered the same, and may act as a single individual. They enable a corporation to manage its own affairs, and to hold property without the perplexing intricacy, the hazardous and endless necessity of perpetual conveyances for the purpose of transmitting it from hand to hand. It is chiefly for the purpose of clothing bodies of men, in succession, with these qualities and capacities that corporations were invented and are in use.

"By these means a perpetual succession of individuals are capable of acting for the promotion of the particular object like one immortal being."

'Dartmouth College vs. Woodward, 4 Wheat., 636. To the

commercial world the following definition of a corporation

Judge Dillon, the recognized American authority, in his admirable work on municipal corporations, defines a corporation as follows:-"It is a legal institution, devised to confer upon the individuals of which it is composed powers, privileges, and immunities which they would not otherwise possess, the most important of which are continuous legal identity or unity, and perpetual or indefinite succession, under the corporate name, notwithstanding successive changes, by death or otherwise, in the corporators or members of the corporation." 2

and

Our United States Supreme Court has defined a corporation in the following language: "An association of individuals, acting as a single person united for some common purpose permitted by the law to use a common name and to change its members without a dissolution of the Association."

The idea of immortality is the dominant and characteristic feature of a corporation and plainly distinguishes it from a natural person, as the members may die, but the corporation continues as a perpetual unity unaffected by their death. Another distinguishing quality is that it acts as a unit, distinct

by the late astute business man, Jay Gould, may be worthy of note: "A body of men who unite, associate, and concen trate their ability, capital and intelligence in the undertaking of a work, great or small, which any one of them would individually be unwilling to undertake. If there are losses, they agree to bear each his proportion; if there are profits, they agree to divide them." Taylor, Corp., Par. 23.

• Dillon, Mun. Corps. (4th ed.), Vol. I, Par. 18: "A private

from its members, and this legal fiction of separate corporate identity prevails under the English common law and is quite generally upheld by the American courts. "A corporation is distinct from its members in the same sense that a State is distinct from its citizens. The parallel, indeed, between a corporation and a State is very close. A State is generally spoken and thought of as a person, because that is the simplest way of picturing to the mind the collection of powers and obligations connected with the idea of a State. The citizens have certain powers and duties, and the State may execute their will when expressed in certain forms; but to fail to treat a State, either in its domestic or foreign relations, as something dictinct from its citizens, would lead not only to theoretical error, but to endless practical difficulties."

SPECIES OF CORPORATIONS AND DISTINGUISHMENT.

SECTION 2. The universally recognized fundamental classification of corporations is into Public and Private. Corporations are largely distinguished from each other by the difference in the character of the persons who compose the corporation and the nature of the rights created by such incorporation. The line of demarcation between this division of corporations is broad and easily discernible; while in the case of private corporations, a contract is created between the legislature representing the government and the incorporators, public corporations are not the result of any contract between the incorporators and the State. The public

4 Lowell on Transfers of Stocks,

Par. 2.

"The purpose in making all corporations is the accomplishment of some public good. Hence, the division into public

and private has a tendency to confuse and lead to error in the investigation; for, unless the public are to be benefited, it is no more lawful to confer 'exclusive rights and privileges'