Evening star. [volume] (Washington, D.C.) 1854-1972, 1904-11-10
AMENDMENT OF CODE
MIR. KENNEDY's SUGGESTIONS RE-
GARDINa LAND COMPANIES.
Permission Desired for Organization
Matter May Be Referred to Cor
poration Counsel.


a letter from Mr.. Crammond Kennedy OF
this city. in which the latter suggests that
the District code be amended as to per-
NIT the organization in the District Of land
improyement companies. Mr.. Kennedy mem
lions that although such companies cannot
be organized under the District laws, for
eign corporations are, nevertheless, en-
gagged in the purchase, improvement and
sale of real estate in the District. Mr.
Kennedys letter contains arguments that
are considered interesting in connection
with the Incorporation laws in the District
His suggestions will probably be referred
to the corporation counsel for report.
The Suggestions.
Mr. Kennedy's letter, in part, follows:
Nothing in the way of corporate ac-
tivity has been regarded with more favor
throughout the United States than the
proper preparation of vacant land as sites
for dwellings and the erection of sucn
buildings, but, to my surprise. when
looked into the law for the purpose of organ
izing such a company in the District found
that section COS of the code, which author
ICES the incorporation of any three or more
persons for the purpose of carrying on any
enterprise or business which may De law
fully conducted by an individual, Is limited
by the following provision: -
THAT nothing herein contained snail
be held to authorize the organization OF
corporations to buy. sell, or deal In reai
estate, except corporations to transact tne
business ordinarily carried on by real estate
agents or brokers'.
1.-The exception to the Limitation Is aimost
as remarkable as the limitation Itself Hes-
idents of the District of Columbia cannot
form a company under the laws or the
District for the purchase, Improvement and
sale of land within Its limits on the COM
munity or park plan, which has so many
advantages and is practiced so successfully
elsewhere, or for dealing with reai estato
in any other way than as real estate agents
or brokers!
Perhaps it is still more remarkable that
the real estate title companies OF the us
trict in face of such prohibition, should
recognize the right Of corporations organ.
lied outside of the District to buy and sell
land within the District and grade and I'M
prove it. and deal in 1t freely, II so pro-
vided in the certificates or lncorpora.ion
which the incorporators have filed under
the laws of the states In which they are
organized, i.e., a corporation organized III
some state on the other side OF the conti-
nent can lawfully do within the 1eoeral
district what District corporation cannot
do or be organized to do within its limits
under the District code.
Should Be Avoided.
"Law-abiding, self-respecting residents Of
compelled to incorporate themselves in New
Jersey. West Virginia, South Dakota or
some other state, II they wish to cooperate
as a corporation in the purchase, improve
ment and sale of realty in the territory
where they reside. If 1t Is the intention Of
Congress, as Indicated in the provision
which / have quoted to prohibit the or
ranization of companies in the District for
the purchase and Improvement OF vacant
land and Its sale In lots for residences IN
der the general law, no corporation or
ganized outside of the District can lawful
ly do what Is thus prohibited within Its
limits. If this legislative prohibition, or
restriction. SO clearly expressed indicates
a policy. it cannot be nullified or evaded by
any such means. 1t is only by comfy, or
tacit permission, or affirmative legislation
that foreign corporations can do In the
District what they are authorized to DO by
the laws of their Incorporation elsewhere;
and as there Is no legislative provision In
the District code allowing foreign corpora
tons to purchase, improve and sell real
estate in the District, the presumption Is
that neither by comfy nor tacit consent
can the legislative policy expressed In the
aforesaid prohibition be overruled or
evaded
Objections Answered.
IF it be said that the intention of the
prohibition in the code was not to prevent
the organization of such companies in the
District, but simply to compel the would
be incorporators to apply to Congress for
a special charter instead of organizing un-
der the general law, the answer is that
this intention Is also rendered ineffective
by allowing foreign corporations, organized
under the general laws of other jurisdic-
tons to deal in realty within the District.
IF the code were amended by striking
out the prohibition in question, the legal
situation would be greatly simplifed and
improved and capital would not only be
more freely invested in the improvement of
land in the District. but under more rea-
sonable and convenient conditions"