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only with the government of its members ; and each member traded on his own account. The courts of the foreign land where the trade was conducted were not asked to judge between the company as a person and the inhabitants of the land. As far as they were called upon to judge between the members of the company in matters of its internal administration, usually they had to deal with rights and duties created as much by the law of their own land as by that of the land from which the company came; for usually the original privileges or charter of the company were confirmed by the sovereign of the foreign land. In the thirteenth century, for instance, the merchants of the Hanse trading in England held a privileged position under the Crown, and the English merchants trading in the low countries held a grant of privileges from the Duke of Brabant. Similarly, in later times, the Emperor Charles V confirmed the privileges of the company of English traders in Spain ; and the companies of Muscovy and of the Levant were recognized by grants of privileges from the Czars and the Sultans.
In 1612 the joint-stock principle made its appearance upon the reorganization of the East India Company. Thenceforward in the dealings of chartered companies abroad the members stood behind the company instead of the company standing behind the members. Had these companies carried on business in civilized lands, their personalities might have been forced upon the attention of the courts, and lawyers might have begun to discuss their status two centuries earlier than they did. But in the East Indies, in Africa, in the South Seas, or in Hudson's Bay, there were no lawyers to concern themselves, or at least such lawyers as there were would not have been allowed to concern themselves about such questions; and the questions remained undiscussed. When, however, during the nineteenth century joint-stock companies and other trading corporations began to pass about from one to another of the civilized states of Europe, it became possible and necessary for lawyers to consider the nature of their status and capacities in countries other than those in which they were originally incorporated. During the last twenty years the importance of such questions to the commercial world has greatly increased. English companies have acquired large interests, and carry on great businesses abroad. An important insurance business is conducted in this country by American corporations. Foreign corporations are frequent litigants in English courts, and English companies in foreign courts. The courts of the United States have provided a large number of decisions upon the status and capacities of corporations which carry on business in states other than those in which they were
incorporated; and the status of such migrating corporations has been firmly established for practical purposes in many countries by international treaties.
Business in these cases is being carried on with the assistance of legal theories about artificial personality; but perhaps the practice of the business men has strained a little some theories prevalent amongst lawyers. Theory in this region seems to be lagging a little behind fact: and the discrepancy is another instance of the shortcomings of those ideas about the nature of the legal personality of a corporation which are criticized and condemned by jurists who follow Dr. Gierke in Germany and Professor Maitland in England. The nature of those criticisms are now well known to readers of this Journal. It is therefore unnecessary to recapitulate here in detail the conflicting opinions of those who uphold the older theory, derived from Roman law, that a corporation's personality is pure legal fiction, and of those whom we may now call realists. The latter teach us that 'the personality of the corporation aggregate is in no sense and no sort artificial or fictitious, but in every whit as real and natural as the personality of a man?. But their teaching, in this country at least, has hardly permeated below the higher and more remote regions of jurisprudenoe. Arguments and decisions in the law courts, in which it is material to consider the nature of the personality of a corporation, still proceed upon a theory which is something very like the fiction theory, pure and simple. Sir Frederick Pollock, in stating the theory of corporations that is prevalent in England, speaks of the Roman invention, adopted and largely developed in modern systems of law, of treating the collective persons who from time to time hold [the position of being charged with offices of a public nature involving the tenure and administration of property for public purposes, or interested in carrying out a common enterprise or object]-or, in some cases, and according to some opinions, the property or office itself—as a single and continuous artificial person or ideal subject of legal capacities and duties?' 'It is possible, he continues, however, 'to regard the artificial person so created as a kind of fictitious substance, conceived as supporting legal attributes': and to this it may be added that few English lawyers would be wary enough to reject this expression of the theory of fiction as a true expression of the law of England. None at least would hesitate to accept as good English law the theory as to the genesis of a corporation which grows out of the fiction theory, and which is known as the concession theory. In the form into
1 Maitland, The Corporation Sole, L. Q. R. xvi. 335. 2 Pollock, Principles of Contract, 7th ed., p. 113.
which this theory grew from Roman law, Professor Maitland states it vividly thus : 'the corporation is and must be the creature of the state. Into its nostrils the state must breathe the breath of a fictitious life, for otherwise it would be no animated body, but individualistic dust ?' With us in England,' says Blackstone, “the king's consent is absolutely necessary to the erection of any corporation?' No editor has thought it necessary to add a qualifying note; and since the case of Sutton's Hospital no English lawyer would have hesitated, and none would now hesitate, to accept Professor Maitland's sentences as an exposition of English law.
Since the time when trading corporations first began to carry on business in civilized states other than those in which they were incorporated, difficulties have been felt in understanding their status in the foreign states by lawyers whose minds' have been held by the prevalent theories of fiction and concession. Its personality is conceded to a corporation by the state, and exists only as a fiction of the municipal law of the state which conceded it. The authority of the state does not extend, and its municipal law has no jurisdiction, beyond the frontiers of the state. How, then, can the corporation exist outside the medium, as it were, of which it is composed ? In 1839 this question was debated in a case in the Supreme Court of the United States, The Bank of Augusta v. Earle 3. Mr. Chief Justice Taney recognized the difficulty, and suggested a way of overcoming it. A corporation,' he said, 'can have no legal existence outside the boundaries of the sovereignty by which it is created. It exists only in contemplation of law, and by force of the law, and where that law ceases to operate and is no longer obligatory, the corporation can have no existence'; but this was not to be fatal to the possibility of a corporation migrating: Natural persons,' he continued, through the intervention of agents are continually making contracts in countries in which they do not reside, and where they are not personally present when the contract is made, and nobody has ever doubted the validity of their agreements. And what greater objection can there be to the capacity of an artificial person by its agents to make a contract in a sovereignty in which it does not reside ; provided such contracts are permitted to be made by them by the laws of the place? As in the case of natural persons it is not necessary that the corporation should actually exist in the sovereignty in which the contract is made.' The opinions expressed in this passage have been from time to time repeated, and
1 Maitland, Introduction to Gierke's Political Theories of the Middle Ages, p. Xxx : and see generally Carr, Law of Corporations, chaps. xii and xiii. Blackstone, Comm. I. 472.
3 13 U, S. Pet. Rep. at p. 588, VOL, XXII.
in substance are still generally accepted as a satisfactory account of the status of the migrating corporation! The corporation, it is said, cannot go abroad without losing its personality and splitting up into its constituent members. It preserves its existence, therefore, by staying at home itself, and sending its agents abroad to act for it. The foreign state recognizes the absent corporation as the principal in the transactions, a recognition which is based upon international comity: and so the corporation is enabled to discharge its functions in places where it could not exist itself. The theory is analogous to that according to which, in the eye of the law, a corporation is capable of committing an assault.
In the passage which has been quoted the problem of the status of a migrating corporation is dealt with as a geographical problem ; the difficulties in its way are pictured as difficulties in passing certain physical boundaries. The solution of these difficulties by means of the law of agency seems at first sight satisfactory, since agents can pass barriers which are merely physical. It conforms also to at least one set of facts, for the contracts of a trading corporation made for the purposes of its business in states other than that in which it was incorporated do usually take the form of contracts made by an agent for a foreign principal. The local manager contracts as agent for the directors, who are themselves agents for the foreign corporation ; and the foreign corporation is expressed to be the principal to the contract. But the solution is not equally satisfactory in other directions. In particular it conflicts with the common sense which is enshrined in modern theories about domicil. The domicil of a corporation is the place in which, by a legal fiction, its personality is assumed to be present for some purpose, such as to give the local courts jurisdiction over it. It is said that it is a necessary consequence of the fiction theory that, outside the boundaries of the sovereignty by which it is created, a corporation can have no legal existence : and to say that, is to say in other words that its personality cannot pass those boundaries so as to be present anywhere beyond them. But since the domicil of a corporation is a place where its personality is assumed to be present, in a place where its personality cannot be present the corporation can have no domicil. A corporation cannot therefore have a domicil outside the boundaries of the sovereignty by which it is created. But it is natural for people to think that the personality of a corporation is present, and that the corporation is domiciled, where there are most outward signs of its activity ; and the rule of English law upon the subject expresses
· The Status of English Companies Abroad, E. Manson. Journal of the Society of Comparative Legislation, N. S., vol. i, p. 11,
this tendency. "The domicil of a corporation,' says Professor Dicey, 'is the place considered by law to be the centre of its affairs which (a) in the case of a trading corporation is its principal place of business where the administrative business of the corporation is carried on, (b) in the case of any other corporation, is the place where its functions are discharged 1.' In the case of a corporation carrying on business in a state other than that in which it was incorporated, the centre of affairs may be, and often is, situated in the foreign state. When that is the case, the courts of the foreign state are naturally inclined to act upon the above rule of law and common sense by treating the corporation, for the purpose of exercising jurisdiction over it, as domiciled at that centre. In this country, and in others where the common law prevails, the courts have had a special incentive to regard a foreign corporation as domiciled within the territorial limits of their jurisdiction and present there in its own personality; for the rule of the common law that service upon a corporation must be effected upon its chief officer prevented them from obtaining jurisdiction over a foreign corporation which had to be considered as present within those limits by its subordinate agents only. The case of Carron Company v. Maclaren 2 is the first case decided by an English court which displays this tendency in action. Lord St. Leonards there held that a Scottish company might have a domicil in England which would enable the English courts to exercise jurisdiction over it. The rest of the court (although they differed from him on the facts of the case) agreed with him in this statement of the law; and his judgment has since been frequently referred to with approval both in the United States and England 3. In Newby v. Von Oppen * Mr. Justice Blackburn drew the distinction between a foreign company which merely employs an agent in England and one which must be treated as resident in England, and held that a certain American company had in fact a residence in England at which a service could be effected on the company. In the United States the courts have sought to avoid a similar conclusion; and in many states, in order that the courts might be able to exercise jurisdiction over foreign corporations, statutes have been passed to negative the effect of the common law rule as to service upon a corporation by requiring foreign corporations to appoint an agent for service of process in the state as a condition of doing business in the state. But it is now generally considered that a corporation may acquire a business domicil in a state other than that in which Dicey, Conflict of Laws, Rule 19.
H. L. C. at p. 450. e. g. Haggin v. Comptoir d' Escompte de Paris, 23 Q. B. D. 519. * L. R. 7 Q. B., p. 293.
Reimers v. Seateo Manufacturing Co., 70 Fed. Rep. at p. 577.