Page:Harvard Law Review Volume 2.djvu/181

 LA W OF BUSINESS CORPORATIONS. 163

its charter through negligence or abuse of its franchises.^ The second of these methods is inapplicable to business corporations, for the shares of the members are property and would •pass to their personal representatives. Further, it should be added that a corporation may be dissolved by the expiration of the time lim- ited in its charter.

Forfeiture of a charter was enforced by scire facias or an in- formation in the nature of qtw warranto. It is only in connection with the question of forfeiture that importance was attached to the fact that a corporation had acted in excess of the authority given by its charter. Not a trace of the modern doctrine of ultra vires is to be found before the present century.^ The other ways in which a corporation could be dissolved need no elaboration.*

Kyd says,* " The effect of the dissolution of a corporation is, that all its lands revert to the donor, its privileges and franchises are extinguished, and the members can neither recover debts which were due to the corporation, nor be charged with debts con- tracted by it in their natural capacities. What becomes of the personal estate is, perhaps, not decided, but probably it vests in the crown.*'

The accuracy of the statement that the lands of a dissolved cor- poration revert to the donor has been doubted in Gray on Per- petuities.^ After a very careful examination of authorities the learned author arrives at the conclusion that the lands would escheat, and offers the following explanation to account for the prevalence of the theory which he controverts. Most early cor- porations held their lands in frankalmoign, a tenure in which the lord was always the donor. Hence, on the dissolution of a cor- poration, its lands, though they escheated, would generally go to the donor.

The explanation is ingenious, and very likely true. It may, however, be urged that Lord Coke, to whose statements* are to be attributed, in the main, the wide acceptance in later times of the doctrine under consideration, is not likely to have made such a palpable blunder in regard to a question of tenure. The sug-

> I Blackst. Com. 485, and to the same effect, 2 Kyd, 446.


 * Bricc, Ultra Vires (2d ed.), x.


 * They are folly discussed in 2 Kyd, 446, Grant on Corp. 295, and elsewhere.
 * Vol. ii. 516. *§§ 46-51.


 * Co. Lit., 13 b; Dean and Canons of Winsor v. Webb, Godb. 211.