Court Opinion

ID: 7193568
Source: CourtListenerOpinion
Date Created: 2022-07-24 16:59:49.816876+00
Date Added: 2024-06-11T16:15:58.921912
License: Public Domain

On the Merits.
Bermudez, C. J.
It is elementary that corporations are the creatures of law, either by special and express legislation, or under general and formal statute authorizing their formation. In either case, they have only such powers or rights and incur only such obligations, as are conferred or imposed, expressly or impliedly, and as are necessary, and inherent to their existence.
When legally created, they .shield from personal liability the persons who compose them and are themselves responsible to the extent of their assets and not beyond the same, unless there has been distinctly stipulated in their charter to the contrary and the scope and measure of the liability has been clearly stated.
Our code defines a corporation to be an intellectual body created by by law, or established by lawq which is composed of individuáis, united under a common name, the members of which succeed each other, so that the body continues always the same, notwithstanding the change of the individuals, and which, for certain purposes, is considered as a natural person. R. C. C. 427, 432.
The code proceeds to state in what respects they are substituted to persons, and provides that they may enact statutes and regulations; provided, the same be not contrary to the laws of the political society of -which they are members. R. C. C. 433. It announces emphatically that unauthorized corporations enjoy no public character and cannot appear in court, but in the individual name of all the members who compose it and not as a political body, although these corporations may acquire and possess estates and have common interests, as well as other private societies. R. C. C. 446.
In 1855 the legislature passed a law—No. 131, amended in 1868 (No. 73)—making- it lawful for any number of persons, not less than six, on complying with the terms prescribed by the act, to form themselves into and constitute a corporation for a number of purposes, generally stated, defining their 'powers. This act is incorporated in the R. 8. under sections 683, et seq.
The question presented in this controversy for solution is simply, whether the “New Harbor Protection Company” is a corporation, associ*238ation or partnership, organized under that general legislation. To solve it, it isnecessary to inquire whether the corporations, though représen ted as they were, at the making of the act of July”, 1875, could have legally formed any agreement, the object of which would have be.en to create an organization, of whatever nature, distinct from themselves, to accomplish the purpose they then had in view, which was to extinguish fires on vessels, to grant aid to wrecks and to aid the fire department in extinguishing fires.
The provisions of the code and of the statute leave no doubt in the mind, that a corporation is a body composed of individuals and, when not created by the legislature itself by special legislation, cannot be formed and brought into existence unless by the concurrent action of at least six persons.
The words individuals and;persons in those provisions of law must be taken as synonymous and as meaning natural and not artilidal persons; in other words, human beings.
It has been held that when the word “persons” is used in legislative acts, natural persons willbe deemed as intended, unless something appear in the context to show that it applies to artificial persons. Bouvier Vo. Person (3).
Twenty-five years ago the then Supreme Court of this State was called upon to determine whether a corporation created under the act of 1855, March 14th, p. 182, relative to the organization of corporations for works of public improvement and utility could avail itself of the provisions of the act relative to the voluntary surrender of property, approved March 15, 1855, the first section of which provided: “Any person may make a cession of his property to his creditors.”
Tt was then contended that corporations constitute a class of persons under the provisions of the Louisiana Code of 1825, and the attention of the court was directed to article 431 of that code, in which corporations are designated as mtélleotual persons.
The court tersely said :
“We are of opinion that the term person, in the first section of this act of the legislature refers to natural persons alone apd that it was not the intention of the law-giver to include under that denomination, the artificial or legal person which is the subject of the tenth title of the first Book of the Civil Code.”
The court supported that conclusion by a comparison of the act with anterior ones, on the subject of voluntary surrender and a reference to the ruling in the case of the Commissioners of the Exchange Bank, 6 *239Rob. 398. In that case the court said, that no law existed prior to 1842 which defined the insolvency of a corporation or provided for either its voluntary or forced liquidation.
It therefore follows that, as the parties which appeared in the notarial act of 1875 were corporations, and not natural persons or human beings, capable of contracting, they had no power to create, as they proposed doing, the corporation to be known as the “ New Harbor Protection Co.,” and that therefore they did not do so.
The companies which appeared at the making of the act, were insurance companies, whose charters did not authorize them to form an association or partnership. As a rule corporations are not capable of forming a partnership. Abbot on Corp. 571, No. 37, and authorities there cited. The purpose of the act, besides, was clearly to create a corporation, and not an association or partnership. Even if they had the power to create an association or partnership, they did not contemplate forming one, and they have not done so.
It has been argued with some earnestness that, even if corporations could in Louisiana create a corporation, the insurance companies which attempted to create “ the New Harbor Protection Co.” in July 1875, could not have legally done so, for the reason that such creation was not only not among the objects enumerated in their own charter, or in the law then in force, but beyond and in contravention thereof. On this point we express no opinion, as it is unnecessary to do so, the case ■ being decided on a superior ground.
We deem it hardly necessary to suggest that we are not to be considered as holding that corporations which are intellectual beings, cannot act in a number of casos, as can natural persons, with whom they are often assimilated. Wo simply decide that they cannot create a corporation, under the general law of this State, as found in sec. 683 et seg. of the Revised Statutes.
It remains now to determine what disposition can be made of the property acquired in the name of the New Harbor Protection Co., which is nothing but a nondescript organization, composed of the owners of certificates showing the proportion of their respective interest in its asset and liability for its obligations, and who are co-owners or proprietors in common.
As no one is bound to own property in indivisión, it follows that such owners who wish a division have a right to have that property sold, and after a liquidation of the affairs of the concern, to have the residue distributed ratably among themselves.
*240We have read with interest the instructive brief submitted by the learned counsel for defense and his colleagues, in support of the able oral argument made on the trial; but as we deem that the innumerable authorities to which we are referred, derive from sister States governed by different laws and arise under different states of facts, and therefore can receive no application in Louisiana, whose special legislation prevails on the subject of the formation of corporations by persons under general laws, we have dispensed ourselves from the cumbersome and fruitless task of analysing and considering them specially.
We are of opinion that the district judge has correctly decided the issue presented, in favor of plaintiff.
It is therefore ordered and decreed that the judgment appealed from be affirmed with costs.
Rehearing refused.