Page:The Green Bag (1889–1914), Volume 18.pdf/706

 CONTROL OF CORPORATIONS Paper Trust case, that a corporation does not have the right of an individual in con stitutional protection against self-incrimination by the enforced production of books and papers. It was said in the recent case of the United States v. Milwaukee Refrigerator Transit Co., 142 Fed. 247, that a corporation will be looked upon as a legal entity as a general rule, or until sufficient reason to the con trary appears. But when this notion of legal entity is used to defeat the public con venience, to justify wrong, to protect evil, or to defend crime, the law will regard the cor poration as an association of persons. Thus where one corporation was organized and owned by the stockholders of another, mak ing their interests identical, they would be treated as identical when the needs of jus tice required. It necessarily follows that the protection of the public against unlawful corporate action must, as a rule, be sought by pre ventive remedies rather than punitive, and the latter as a rule can only be effectually enforced against the individuals, through and by whom the unlawful corporate action is effected. The use of preventive remedies seems more firmly established in the English courts than in our own, as there the distinc tion between the powers of courts of equity and courts of law has in this respect now only historical interest. It is obvious that in a progressive industrial civilization, preventive remedies are frequently the only adequate remedies when business or property rights are invaded or threatened. Where the public interest intervenes, as in the case of inter state carriers, some form of preventive re lief, usually that of injunction, is usually the only available remedy. There is a popular prejudice in certain quarters against the use of injunction in trade disputes. But such objections doubtless grow out of the occasional abuse of the writ of injunc tion, as it is clear that it is not only the most effective, but oftentimes the only remedy available for the protection of the

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public against unlawful corporate action. In our busy industrial civilization we are coming to recognize that it is far more effec tive to prevent evils to persons and prop erty than it is to recover damages for them after they have been inflicted. This is in harmony with public policy and protects at the same time the general public and the innocent stockholder of the corporation. The dependence of even a preventive remedy upon the responsibility of the indi viduals connected with the corporation is illustrated in the enforcement of an in junction through the familiar procedure of contempt. Originally the individuals of a corporation were the only parties liable to punishment for contempt in disobeying an in junction, as there was a technical difficulty in holding a corporation guilty of a criminal offense. The corporation could not be attached for contempt, as it had no body which could be arrested and could only be forced into court through distraint of its lands or goods. In remedial as distin guished from criminal contempts, where the order of the court is made for the benefit of a private party litigant, there is sometimes a reason for including a corporation as a party to the contempt in order to reach the cor porate treasury for the payment of the fine, where officials are pecuniarily irresponsible, and the fine is collected for the benefit of the plaintiff. In such cases the object is more to collect a fine than to punish a wrong. In criminal contempts, including cases where an injunction is violated which is sued out by the government for public purposes and the criminal offense of obstructing justice is committed by, that is on behalf of the corporation defendant, there is a technical difficulty, which has been recognized by the courts, in holding the corporation liable at all. They can only be held liable by an extension of the rule, rather of public policy than of logic, which holds them liable for the malicious torts of their agents and servants. There is no question, however, that the officers by and through whom the corpora