tion of a bank under the name of the Home Savings Bank, with a president, cashier, and a board of directors. This is the mode of organization usually adopted by corporations, and did not tend to prove a partnership. It was then shown that the decedent bought and held certificates of stock in the bank, after its organization, which recited not the formation of a partnership, but the organization of a bank under the laws of the state, and the division of its capital into shares of one hundred dollars each. This is not the usual way in which partnerships are created and partners admitted. It is the usual way in which stocks are issued and transferred in corporations. Proof was then made of the receipt by the decedent of several dividends upon his stock. These did not purport to be shares in the profits of firm business, but dividends, declared in the manner usual among corporations, upon the stock of the bank; and were paid by dividend checks drawn under the authority of a board of directors. The only other evidence was the returns made by the officers of the bank under the tax law of 1879, which threw very little light upon the character of the organization of the bank. Upon this proof the questions for the auditor were whether the bank was shown to be a partnership, and the decedent a partner. The bank did business for a number of years and then failed. Its books and papers were in the hands, or subject to the control of, the receiver. The manner of its organization was not shown; the partnership agreement, if any such existed, was not produced. No proof was given that the officers or stockholders claimed, or held out to the public, that the stockholders were partners or the bank a partnership enterprise. It was not alleged that the decedent participated in any manner in the business, or exercised any control over it. The whole case against him rested on the fact that he had purchased shares in a bank, then organized and doing business, and received dividends declared by the directors and paid to him in a cashier's check. We are not surprised that the learned auditor was led to ask: "What is there in all this evidence from the beginning of the business to the failure, tending to prove a partnership?" nor that he answered his own question by holding that this proof was insufficient to establish, prima facie, the existence of the partnership relation. On the other hand there was much tending to show that Henry Gibbs understood that he was the holder of stock in an incorporated bank; and that the bank assumed and exercised corporate powers; and was dealt with by the public as a corporation. The form of its certificates, the manner of their transfer, the election of directors by the stockholders, the management of the business of the bank by the directors and the officers elected by them, the mode of declaring and paying dividends, were all suggestive of a corpo

ration. They were not suggestive of a partnership. We are unable therefore to say that the auditor erred in finding that the bank was not shown to be a partnership. * * *

It is said with earnestness and energy that this is a case in which the depositors deserve protection. We assent to this proposition. We can extend protection to them, however, in accordance with the established rules of law, and in no other manner. What the Home Savings Bank was in its organization, in what capacity those who held its stock were liable to its depositors, are questions not now before us. It may have been a corporation de jure, a corporation de facto, a joint-stock association, or a general partnership so far as we are able to declare. What we say is that the evidence in this case is not sufficient to make a case, prima facie, against Henry Gibbs as a partner, or the bank as a general partnership. It does not appear that the bank was organized as a partnership, conducted business as a partnership, or held itself out to the public as such. It does not appear that Gibbs understood the bank to be other than what his certificates of stock indicated; or that he treated the business of the bank as that of a firm, or exercised the slightest control over, or influence upon it; or misled the appellant or any other depositor by act or word as to his relation to it. What does appear is that he purchased shares of stock in the usual manner, and received some dividends thereon. * * * Having received dividends, declared by a board of directors upon the stock into which the capital of the bank was divided, he could rest securely upon the apparent character of the transaction and the inferences naturally to be drawn from it. The burden of explanation necessary to give another character to the dividend declared, and to the stock on which it was paid, was on him who asserted that such other was the true character of these circumstances.

It was also said in the argument that the recitals in the stock certificates are not evidence of actual incorporation as against a stranger. This must be granted. They do not prove incorporation. But the appellees are not bound, upon the evidence in this case, to prove incorporation. The significant question is, where is the proof that this bank was organized or conducted as a partnership concern? The certificates do not prove that, but the inferences naturally drawn from them tend the other way. * * The court below did not find that the bank was a corporation. That question was not before it. It was alleged by the appellant to be a partnership, but the auditor and the judge of the court below regarded the evidence in support of that allegation insufficient to justify a finding that the bank was not" organized by act of the legislature of Pennsylvania," as its certificates alleged, but by the parties as copartners. The

appellant failed not because the bank was held to be a corporation, but because it was not shown to be a partnership. Until evidence in support of the appellant's position is given sufficient to lead fairly to the conclusion that the bank was organized as a partnership; or that Henry Gibbs contracted to become a partner when he bought his stock; or that he led the public by his acts and declarations to deal with him or the bank on the basis of his being a partner; there is nothing that makes it the duty of his representatives to enter upon a defence, or that makes it possible for the court to decide upon the character of the bank. In such a state of the evidence, the court can only say, as the court below said in this case, "It is not shown, that the bank is a partnership," and for that reason the claimant fails.

The assignments of error are not sustained and the decree is affirmed.

General Divisions:

Corporations are generally divided into two classes:

(1) Corporations sole.

(2) Corporations aggregate.

The words explain themselves. For a good statement concerning them see Overseers of the Poor of the City of Boston v. Sears, 22 Pickering (Mass.) 122.

Corporations aggregate are divided into

(1) Public corporations or such as are formed to promote public objects. (2) Private corporations, created by private individuals to promote and prosecute private enterprises.

(3) Quasi Public or Public Service Corporations. Lying between these is the corporation known as the quasi-public corporation, an institution created by private individuals for private gain with the object and purpose of promoting some public enterprise. An excellent distinction will be found in McKim v. Odom, 3 Bland Chancery (Md.) 407.

Private corporations are usually divisible into: (1) Business or trading corporations. (2) Ecclesiastical corporations, which, as such, are not known in America, though common in England; and (3) Charitable corporations. The New York General Laws provide for The Stock Corporation, The Business Corporation, Membership Corporations, under which title would be embraced eleemosynary, religious and social institutions generally; Transportation Companies, Banks, etc. See White on (N. Y.) Corporations. Limited Company. This term is frequently used, and especially in England is the word Limited placed after the name of the company. When used, it means that the liability of each shareholder is limited to the value of the shares he has taken, and he cannot be called upon to contribute more. In both England and America the articles of association may provide that the liability shall be unlimited. The rule differs, however. In England the word "limited" must be contained in the articles of incorporation, otherwise a full liability corporation will be presumed; while in America, a limited liability is presumed unless the articles of incorporation contain provisions to the contrary.-ED.

CHAPTER II.

The Creation of a Corporation.

"The essence of a corporation is:

* Ist. Lawfully the authority. of an incorporation, and that may be by four means: By common law, as the King himself, etc.; by authority of Parliament, by the King's charter, and by prescription." The case of Sutton's Hospital, 10 Coke 28 (613).

The power to create a corporation is an act of sovereignty, and none but the sovereign power can create.

Under the Common Law the earlier corporations were probably created by prescription, but it was usually regarded as belonging to the crown to dispense the privilege or right. For many years the King's Charter was the method of creation, but when Parliament became a power it assumed authority to create, though until a late period the methods spoken of by Lord Coke obtained. In England, at this time, the power of the King has been greatly abridged, and few King's Charters are granted save in the case of Colonial corporations, similar to those created for trade and government in the early history of this country. Corporations, both public and private, are now created by Parliament under general laws-known as the Companies Act.

In the United States the sovereign power resides in the people or their representatives - the legislatures. No executive has power to create, nor can the legislatures delegate discretionary power to the executives. The United States Congress. "The Congress of the United States, being empowered by the constitution to regulate commerce among the several states, and to pass all laws necessary or proper for carrying into execution any of the powers specifically conferred, may make use of any appropriate means for this end. As said by Chief Justice Marshall, 'The power of creating a corporation, though appertaining to sovereignty, is not like the power of making war or levying taxes, or of regulating commerce, a great substantive and independent power, which can not be implied as incidental to other powers, or used as a means of executing them. It is never the end for which other objects are exercised, but a means by which other objects are accomplished. Congress, therefore, may create corporations as appropriate means of executing the powers of the government, as, for instance, a bank for the purpose of carrying on the fiscal operations of the United States, or a railroad corporation for the purpose of promoting commerce between the states." GRAY, J., in Luxton v. North River Bridge Co., 153 U. S. 525, citing McCulloch v. Maryland, 4 Wheaton 316, etc.

This limitation does not extend to such territory as the United States has general legislative authority over as the District of Columbia, and the Territories, Congress having expressly conferred this power to create upon the Territorial legislatures.

The power of the state to create corporations was originally a negative power, it being assumed that states might do all things not prohibited by the Constitution of the state or of the United States.-ED.

(a) By Special Act.

THE STATE ON THE RELATION OF Weir, etc. v. DAWSON AND

OTHERS.

16 Indiana Reports 40 (1861).

APPEAL from the Clark Circuit Court.

PERKINS, J. Information against the defendants, charging that they are pretending to be a corporation, and to act as such, when they are not a corporation. It charges that in January, 1849, the legislature of the State of Indiana enacted a special charter of incorporation (which is set out at length), for a railroad from Fort Wayne, Indiana, to Jeffersonville, to be called the Fort Wayne & Southern Railroad; that the persons named in the charter as directors did not accept said charter till June 2, 1852, when they did meet and accept the same, and organize under it. It is alleged that the defendants are assuming to act under said charter, never having organized under any other. The court below sustained a demurrer to the information; thus holding the defendants to be a legal corporation.

The present constitution of Indiana took effect on November 1, 1851. It contains these provisions:

"All laws now in force and not inconsistent with this constitution, shall remain in force, until they shall expire or be repealed." Sched. (I sub. sec.) of Const.

Corporations, other than banking, shall not be created by spe⚫cial act, but may be formed under general laws." Art. 11, § 13.

"All acts of incorporation for municipal purposes shall continue in force under this constitution, until such time as the general assembly shall, in its discretion, modify or repeal the same." Sched. supra, sub. sec. 4.

The charter for the Fort Wayne & Southern Railroad was not a charter for municipal purposes, and, hence, was not specially continued in existence. Art. 11, § 13, above quoted, prohibits the creation of a corporation by special act or charter, that is, as we construe the prohibition, through, or by virtue of, such special act or charter, after November 1, 1851. The policy that induced the prohibition, as well as its literal import, demands this construction. It is necessary for us to ascertain, then, when the defendants, if ever, were created a corporation. The simple enactment of the charter for the corporation, by the legislature, did not create