Page:Henry Osborn Taylor, A Treatise on the Law of Private Corporations (5th ed, 1905).djvu/41

 CHAP. III.] ANALYSIS OF A CORPORATION. [§ 29. those contained in the enabling statute, or in the charter of the corporation, if there is one. For it will be borne in mind, that by filing articles of association in pursuance of statutory pro- visions, or by accepting a charter, persons bring themselves within the operation not only of the rules of law in the enabling statute or charter, but also of rules applicable generally to cor- porate enterprises, including many of the rules of the law of contracts and of agency. 1 § 28. These more general rules of law, together with those contained in the enabling statute, or in the charter, if there is one, are embraced in what may be called tution of a the constitution a of the corporation ; and the action tio r n° ra "in- of these rules (i. <?., the manifesting of themselves in corpora- v ' °, tion. legal relations), as caused by the corporators fulfilling the prerequisite conditions of fact (riling articles of association or accepting a charter), may be called incorporation, the result of which is a legal institution, to wit, a corporation. § 29. But the legal relations which arise immediately conse- quent upon incorporation are not its entire consequences. In- corporation has the further indirect result that future acts in respect to the corporate enterprise will give rise to legal rela- tions different from those which such acts would have occa- sioned had there been no incorporation. Had there been no in- corporation, the corporators might have proceeded to carry out the same business enterprise which they intend to prosecute after incorporation. They might have subscribed an amount of capital equal to the capital stock mentioned in the articles of association, and they might have done business on this capi- tal, although not incorporated. But, doing business as an un- incorporated firm, they would have incurred liabilities which, through incorporation, they avoid. The legal relations arising in respect to their enterprise, for instance through contracts i See Relfe v. Rundle, 103 U. S. 222. 2 See Relfe v. Rundle, 103 U. S. 222. It will be noticed that the term "constitution of the corporation" conveys a notion similar to that con- veyed by the term " corporation," meaning a legal institution. As was said, some pages back, "the term legal institution denotes a body of legal rules in their manifestation," etc. By the term constitution is in- tended the same body of rules, but considered as passive without regard to their manifestation in legal rela- tions; without regard, that is, to whether individuals are within their operation or not. 21