Page:Encyclopædia Britannica, Ninth Edition, v. 6.djvu/466

Rh 434 COKPOBATION the abortive devise. A modification, however, was gradually wrought by the judicial interpretations of the Charitable Trusts Act 43 Elizabeth c. 4, and it was held that a devise to a corporation for a charitable purpose might be a good devise, and would stand unless voided by the Mortmain A c ts; so that no corporation could take laud, without a licence, for any purpose or in any way ; and no licensed corporation could take lands by devise, save for charitable purposes. Then came the 9 George II. c. 36, commonly but improperly called the Mortmain Act. Its effect is generally to make it impossible for land to be left by will for charitable uses, whether through a corporation or a natural person. 1 The new Wills Act does not renew the old provision against devises to corporations, which therefore fall under the general law of mortmain. The result is simply that corporations cannot take land for any purpose without a licence, and that neither corporations nor natural persons can take land by devise for charitable uses (see CHARITIES). The policy of the law of mortmain may be compared with the rule against perpetuities a rule which forbids the operation of settlements purporting to regulate the devolution of land for ever. The longest period for which the law will allow the future disposition of land to be tied up is a life or lives in being, and twenty-one years thereafter. The power of corporations at common law to alienate their property is a question of much greater difficulty, and no satisfactory solution of it is to be found in the cases or text-books. Coke is understood to say in his report of Sutton s Hospital case that they have the power to alienate, but later authorities are sometimes quoted on the other side. &quot; All civil corporations, &quot; says Kyd, &quot; such as the corpora tions of mayor and commonalty, bailiffs and burgesses of a town, or the corporate companies of trades in cities and tow r ns, &c., hare and always have had an unlimited control over their respective properties, and may alienate in fee, or make what estates they please for years, for life, or in tail, as fully as any individual may do in respect of his own property.&quot; And he makes the same assertion as to the common law right of colleges and ecclesiastical corporations. Grant, however, argues that no civil corporation can be supposed to hold land otherwise than as &quot; clothed with a public purpose, &quot; and that, therefore, there is no right of alienation. Recent judicial decisions, however, seem to favour it. In a case before the late master of the rolls (Evan v. Corporation of Avon, 29 Beavan 144), it was held that a municipal corporation., apart from the Municipal Corporations Act, has full power to dispose of all its property like a private individual, and in the more recent case of Riche v. Ashbury Company (Laiv Reports, 9 Exchequer, 224) Mr Justice Blackburn, quoting the opinion of Coke in Sutton s Hospital case, lays it down that at com mon law a corporation might bind itself to anything to which a natural person could bind himself, and deal with its property as a natural person might, and that an attempt to forbid this by the king, even by express negative words,, does not bind the law. When land is held by a corpora tion for charitable or other fiduciary purposes the Court of Chancery will interfere to prevent any improper alienation. In the case of ecclesiastical and college property, the dangers incident to unlimited power of alienation produced what are known as the restraining statutes in the reign of Elizabeth. The first of these, 1 Elizabeth c. 19, applies only to bishops, and forbids alienations whereby an estate should pass other than for the term of twenty-one years or three lives, with accustomed yearly rent or more reserved. 1 Devises to colleges are ex-cepted from the operation of the Act, but such devises must be for purposes identical with or closely resembling the original purposes of the college; and the exception fiom this Act loes not supersede the necessity for a licence in mortmain. The 13 Elizabeth c. 10 extends this principle to other ecclesiastical persons and to collegps. The alienation of college and church property is now permitted by modern statutes, under the supervision of commissioners. Tha Municipal Corporations Act, 1835, deals with the alienatioa ol municipal property in a similar spirit. As already indicated, the more important classes of cor porations are now governed by special statutes which ex elude or modify the operation of the common law principles. The most considerable class of societies still unaffected by such special legislation are the Livery Companies ; for an account of which see COMPANIES. Under the same head ing will be found an account of the important enactments regulating joint-stock companies. The question to what extent the common law incidents of a corporation have been interfered with by special legis lation has become one of much importance, especially under the Acts relating to joint-stock companies. The most important case on this subject is that of Richov. The Ashbury Railway Carriage Company before mentioned, in which, the judges of the Exchequer Chamber being eqvially divided, the decision of the court below was affirmed, The view taken by the affirming judges, viz., that the common law incidents of a corporation adhere unless expressly re moved by the legislature, may be illustrated by a short ex tract from the judgment of Mr Justice Blackburn : &quot; If I thought it was at common law an incident to a corporation that its capacity should be limited by the instrument creating it, I should agree that the capacity of a company incorporated under the Act of 1862 was limited to the object in the memorandum of association. But if I am right in the opinion which I have already expressed, that the general power of contracting is an incident to a corporation which it requires an indication of intention in the legislature to take away, I see no such indication here. If the question was whether the legislature had conferred on a corpora tion, created under this Act, capacity to enter into contracts beyond the provisions of the deed, there could be only one answer. The legislature did not confer such capacity. But if the question be, as I apprehend it is, whether the legislature have indicated an intention to take away the power of contracting which at common law would be incident to a body corporate, and not merely to limit the authority of the managing body and the majority of the share holders to bind the minority, but also to prohibit and make illegal contracts made by the body corporate, in such a manner that they would be binding on the body, ,if incorporated at common law I think the answer should be the other way.&quot; On the other hand, the House of Lords, agreeing with the three dissentient judges in the Exchequer Chamber, pronounced the effect of the Companies Act to be the opposite of that indicated by Mr Justice Blackburn. &quot; It was the intention of the legislature, not implied but actually expressed, that the corporations should not enter, having regard to this memorandum of association, into a contract of this description. The contract in my judgment could not have been ratified by the unanimous assent of the whole corporation.&quot; In such companies, therefore, objects beyond the scope of the memorandum of association are ultra vires of the corporation. The doctrine of ultra vires, as it is called, is almost wholly of modern and judicial creation. Its first emphatic recognition of it appears to have been in the case of companies created for special pur poses with extraordinary powers, by Act of Parliament, and, more particularly, railway companies. The funds of such companies, it was held, must be applied to the pur poses for which they were created, and to no other. Whether this doctrine is applicable to the older or, as they are sometimes called, ordinary corporations, appears to be doubtful. A recent author (Brice on Ultra Vires) writes : &quot;Take, as a strong instance, a university or a London guild. Either can undoubtedly manage, invest, transform, and expend the corporate property in almost any way it pleases, but if they proposed to exhaust the same on the private pleasures of existing members, or to abandon the promotion, the one of education, the