Thomas v. Dakin. more individuals. A corporation, alone, of all associated action, takes and conveys title, acquires and gives rights, collectively and by its collective name. 4th. Power conferred by statute to make by-laws, or in other words, to prescribe rules of action for persons, without their consent. This power is always enumerated among the ordinary incidents to a corporation; but two distinguished writers have not considered it among the essential requisites. Chancellor Kent has not mentioned it, when stating the essence of a corporation; 2 Kent's Com. 2d ed. 277; and Mr. Kyd expressly says, it is not so inseparably incident to a corporation aggregate, that it cannot subsist without it; for there are some aggregate corporations to which rules and ordinances may be prescribed, and which they are bound to obey." 1 Kyd on Cor. 69. The legislature may, undoubtedly, when creating a corporation, enact its by-laws, and prohibit it from making any others. So it may mould these artificial beings into any form which the public interest may require, or even the fancy of a committee suggest; and give them all, or none of the peculiar features of a corporation, as has been already remarked. But when inquiring, as we now are, for the distinctive characteristics of a corporation, without reference to direct and effective legislative action, the question is not, what the legislature, which has unlimited authority in this respect, can do, or might have done, in any given case, but what is the essence of a corporation, independent of the creative action of the sovereign power? and we are not aided in the latter by ascertaining the former. Hence, the remark of Mr. Kyd, that the power to make by-laws is not an inseparable incident to an aggregate corporation, because rules and ordinances may be prescribed for some aggregate corporations, which they are bound to obey, appears to be unsound in principle, and his reason to be wholly insufficient for his proposition. The point of inquiry is, can a corporation exist without by-laws? and if they are not made for it, by the power which creates it, must not the corporation itself have author Thomas v. Dakin. ity to make them? Chancellor Kent takes his statement of the essence of a corporate body from Mr. Kyd, and cites. him as his authority. 2 Kent's Comm. 277, 2d ed. We have then only Mr. Kyd's assertion, for he cites no authority, that power to make by-laws is not an inseparable incident to a corporation. A corporation acts wholly by agencies. It can do nothing itself. It is a collective being, invisible, intangible, and exists only in contemplation of law. It is neither seen nor felt, except by its agents. Those agents are its officers and servants: they act under authority, and their duties and liabilities are regulated and tested by the rules which regulate the relation of principal and agent. These are well established principles. How can a corporation have an effective existence, without power to prescribe rules of action for its officers and servants? Let it have existence, a right to sue and be sued, and to take and convey title: can it then act efficiently? Does it not yet want one more requisite of life? Does it not want power to regulate and direct its action? And as it acts through the instrumentality of agents of all grades, from the president down to the servant, must not that power be one, which enables the corporation to prescribe rules of action for persons without their consent? The acts of every corporation in this state may be appealed to for the purpose of showing that the exercise of this power is universal; and I doubt whether there is a corporation in the state, which, if all its by-laws were repealed, and the power taken from it of enacting others, could fulfill the object of its creation; and if not, it must, of course, cease to exist. This power, too, must be exercised irrespective of the consent of the persons affected by it otherwise, every member or agent of a corporation must express his consent to be bound by its by-laws; and when their efficacy depends on consent, their character is entirely changed-they then become matters of contract; they cease to be laws and become agreements. Of the latter character are all the rules and by-laws of voluntary associations. Their whole basis is contract, and the superstructure is the same. Herein lies the difference be Thomas v. Dakin. tween corporations and all unincorporated companies. The former have authority from the sovereign power to make by-laws, and may, therefore, prescribe rules of action for persons without their consent; the latter have no such authority, and can only prescribe rules of action for their members, agents, or others, with their consent; and thus the power to make by-laws which control the action of individuals without their consent is a peculiar feature of a corporation. The four requisites above stated, when united, constitute an effective being, which can perform the functions. of legal life, and without either is helpless, unless the defect be supplied or other powers given by statute; but to give a voluntary association the character of a corporotion by reason of its possessing corporate powers, it must have all the four requisites above specified. The counsel observed that other properties have been said to be peculiar to corporations; but that to him they did not appear to be so on reason or authority. One of which is the having a seal. Formerly it was held that a corporation could be bound only by its seal, and when that was the rule, a seal was of course of the essence of a corporation; but that rule has been abrogated for years, and now a seal, though an ordinary and very important incident to a corporation, is no longer an essential requisite. 15 Wendell, 265. Another is the right of enjoying privileges and immunities IN COMMON. This doctrine is laid down in 1 Kyd on Corporations, 13, and is followed by Chancellor Kent, 2 Kent's Comm. 277. This, the counsel insisted, cannot be of the essence of a corporation, because common enjoyment and common advantages are incident to voluntary associations, as well as to bodies corporate. Another is the exemption of the members of a company from personal liability for its debts. This the counsel observed, is said by some to be peculiar to a corporation, and to distinguish it from a partnership. That, he said, was a mistake. Members of corporations are often made personally liable by the acts of incorporation for the debts of the company; sometimes in whole and sometimes in part. He said there are many instances of this in our state, both in our general and special acts of incorporation. Thomas v. Dakin. There is also a striking instance of members of a copartnership being liable, only to a qualified extent, for the copartnership debts, alluding to our statute concerning limited partnerships. The members of all voluntary associations he said might, by agreement, regulate the extent and nature of their liability for the company debts, and such agreement will bind the parties to it, and, probably, all persons dealing with the association and having knowledge of it; and that it might safely be assumed, that exemption, in whole or in part, of the members of a company from personal liability for its debts, is not an essential requisite of a corporation. Another, and the last, is the transferability of shares without any restriction, at the mere will of the holder. Were it not, that some English cases countenance the idea, that unqualified transferability of shares is a peculiar feature of a corporation, it would be unnecessary to dwell long on this topic. For it must be evident to all, that this is a matter which may be regulated by contract in all voluntary associations; and may exist, or not, in corporations. Partnerships and joint stock companies not only may, but do in fact, regulate the transfers of stock; sometimes permitting them, without any restriction; at others, restraining them to transfers on the books of the company; at others, until the debts due by the holder to the company are paid. And the like provisions are often made in our acts of incorporation; but more frequently the transfer of the stock is left to the discretion of the corporation, with power to regulate it in their by-laws. The cases referred to he said arose under an English statute, which, with the decision upon it, furnish the strongest judicial light discovered by him on the subject of the essential requisites of a corporation; and although the statute is now repealed the light which it elicited still shines, to aid and direct the search for truth. The counsel here cited Collyer on partnership, 620 to 625, passim, and the cases there quoted. In respect to the transferability of shares, he remarked that this property is not mentioned by any author, Thomas v. Dakin. nor in any case, as a corporate attribute except in the cases arising under the statute referred to. It appears to have originated wholly from the English statute, 6 Geo. I. ch. 18, 18, mentioned in Collyer, and the error of considering it a corporate property, he contended arose from a want of care in judging of it, as a distinct offence, which it is by that statute, instead of judging of it as a corporate act, and as such, an offence by the statute. A few references to the language of the act, and the decisions upon it, he said would show this. The recital is-"And whereas, in many cases, the said undertakers and subscribers have presumed to act as if they were corporate bodies, and have pretended to make their shares transferable or assignable without any legal authority," &c. And the enactment is, that such undertakings, " and more particularly the acting or presuming to act as a corporate body, the raising, or pretending to raise transferable stock, transferring, or pretending to transfer, or assign any share in such stock, without legal authority, &c., shall be deemed illegal and void." "The offences," says Mr. Collyer, "which are more particularly pointed out by the statute, are, the presuming to act as a corporate body; the raising transferable stock; the transferring such stock." The transferring of stock is thus obviously a distinct of fence from that of presuming to act as a corporate body. Either might be committed and punished without the other. Yet, says Mr. Collyer, in a subsequent page-"The only act, however, which has been expressly stated to be an assuming to act as a corporation, is that of making the shares transferable without any restriction, at the mere will of the holder." He adds-"The universal illegality of this proceeding was doubted, as we have before observed, by Lord Ellenborough. But in Joseph v. Preber, 3 Barn. & Cres. 639; 5 Dowl. & Ryl. 542, it was held to be universally illegal, not only as it should seem, under the words of the statute on that particular point, but with reference to the more general offence of acting as a corporation." C. J. Best, in a subsequent case, 4 Bing. 267, says: "There can be no transferable share of any stock, except the stock |