Page:Henry Osborn Taylor, A Treatise on the Law of Private Corporations (5th ed, 1905).djvu/46

 § 38.] THE LAW OF PRIVATE CORPORATIONS. [CHAP. HI. there is still another and somewhat different view, which it will be convenient if not necessary to take of the legal relations in respect to the corporate enterprise. They must be regarded as subsisting between individuals of a class and the body corporate as representative of the interests of all persons in the corporate enterprise. § 38. The very notion of any organized body of men, or body Co orate P on ^ c or corporate, implies the existence of certain manage- rules for the management of the affairs of the body, lhe constitution of a corporation always contains rules for the management of the corporate enterprise ; providing, as it does, that acts within the scope of the purposes of incorpora- tion shall, if done by certain persons, have the same legal effect as if done or assented to by every one interested in the corpo- rate enterprise. These certain persons are said to exercise the corporate powers. By filing articles of association, or accept- ing a charter, shareholders agree that the corporate enterprise shall be managed as provided for in the charter, or in the en- abling statute and articles of association. Their individual right to manage the funds subscribed they surrender into the hands of a majority of themselves, and into the hands of the officers of the corporation, as provided for in the constitution. To the provisions in regard to the corporate management creditors im- pliedly assent in contracting with the corporation. Thus the body corporate, consisting of the shareholders as an organized body acting through the will of the majority and com- posing the corporation (regarded not as a legal institution, but as a body of men ! ), is an agency with plenary authority to em- ploy the corporate funds for the purposes of incorporation, and the acts of directors within the scope of their authority to act for the corporation are to be regarded as the acts of the body corporate. The remedy of persons aggrieved through the mis- application of corporate funds lies ordinarily against the body corporate; and the majority of questions litigated in court arise between some person or persons and the body corporate as rep- resenting all persons in any way interested in the corporate en- terprise. 26
 * §§ 48-50.