USA > Missouri > The history of the bench and bar of Missouri : With reminiscences of the prominent lawyers of the past, and a record of the law's leaders of the present > Part 3
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* It has been stated by some that the duel between Leonard and Berry took place on Bloody Island, opposite St. Louis, but this is not so. The agreement was that the fight should take place either in Kentucky, Tennessee or Arkansas, as should be most convenient when they arrived at New Madrid. The law against duelling was very strict at the time.
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REMINISCENCES OF FIFTY-FIVE YEARS OF PRACTICE.
The wise men of the Convention of 1865 doubtless believed that the State by a Con- stitutional provision could violate a contract, when it could not be done by an act of the Legislature. Of course there was nothing in it, and no attention was paid to it. Even though this provision should be claimed as a police regulation, the Constitutional provision had no more force than an act of the Legislature, and there was already an act of the Leg- islature on the subject. And so the lottery lived on until 1877, when the Attorney General instituted a proceeding by quo warranto before the Court of Appeals against George Miller, who was managing the lottery in St. Louis, with a view of taking away the franchise, and by a divided court the case was decided in favor of the State, Judge Thomas T. Gantt hold- ing that there was no consideration to support the contract with Gregory, and Judge Lewis holding that the franchise had been forfeited. It is impossible to say how many thousands of dollars were made in St. Louis and New York by the sale of lottery tickets. The lottery lived for forty-four years, and during a greater portion of that time it was doing a large and successful business. The case of the State vs. Miller is reported in 1 Missouri Appeals.
Much might be said in praise of the distinguished men who have ornamented the bench and the bar in Missouri during the period alluded to, but such an undertaking would make this paper more voluminous than was intended, and trespass upon time assigned to other matters. I have spoken only of those who were upon the stage of action when I came to the bar in 1842, all of whom have since passed away. Missouri may well be proud of their achievements upon the bench, at the forum and in the halls of legislation, and be willing to accord to them the honor of having done much in the work of laying the foundation of the prosperity which she now enjoys. From her earliest history the State has been a field of conflict. She came into the Union amid the throes of a political convulsion. Upon her borders she has had the Black Hawk war, and afterwards the Heatherly war, and the Mor- mon war, and the Kansas war, and later still the war for the Union, when her whole territory was desolated by guerilla warfare as well as by the tread of regular armies, but she has risen from these calamities to the high position she now occupies as one among the first States of Union in material wealth and prosperity.
St. Louis, Mo. September, 1897.
EVOLUTION OF CORPORATION LAW IN MISSOURI AS AFFECT- ING THE DEVELOPMENT OF THE STATE.
BY SENECA N. TAYLOR.
A PRIVATE corporation is a legal person endowed with rights and privileges of an individual, within the scope of the power conferred upon it by law giving it the right to exist. It may be composed of three or more persons, constituting under a particular name one artificial person, bound by law into one body and endowed with the capacity of an individual person, within the scope of the expressed or implied powers with which it is endowed.
The chief objeets of a private corporation are to enable many persons to unite their capital for the carrying on of a particular business, without incurring the risk incident to the individual liability of persons associated as co-partners, and the right of indefinite suc- cession under a corporate name, which is unaffected by succession, changes or death of its shareholders. It has a legal status distinct from its shareholders, and it is an artificial being, invisible, intangible and existing only in contemplation of law.
For the purpose of executing contracts and suing and being sued in the courts, a cor- poration is regarded in law as a citizen of the State under whose laws it was created, and this without regard to the place of residence of the shareholders or officers of the corpora- tion. The Constitution of the United States, in defining the class of cases to which the judicial powers of its courts shall extend, includes "controversies between citizens of differ- ent States." It was at first hield by the Supreme Court of the United States, that a cor- poration could not be a citizen of a State under which its charter was granted so as to con- fer jurisdietiou on the Federal Courts, unless all the shareholders were citizens of a different State from that of the opposite party. But this doctrine did not long obtain in the Federal Courts, and was never followed by the State Courts. The doctrine universally held now is, that for the purpose of litigation in the Federal Courts all the stockholders of a corporation are conelusively presumed to be citizens of the State which created it; and in mnost of the States either the Constitution or laws expressly provide that a corporation shall be regarded a citizen of the State creating it.
In 1812, Congress conferred power upon the Territorial Legislature of Missouri to enact laws in relation to the government of the people of that Territory, with no other limitations than such as were imposed by the Federal Constitution. During the period Missouri remained a Territory, its Legislature grauted charters to but few corporations, and all such were municipal, such as conties and trustees of towns. Trustees of the towns of St. Louis and Ste. Genevieve were the only villages incorporated under the Territorial statutes of Missouri.
In 1820, the Territorial Constitutional Convention adopted a Constitution which, on submission to Congress iu 1821, was approved, subject to certain modifications, and in that
(20)
21
EVOLUTION OF CORPORATION LAW IN MISSOURI.
year Missouri was admitted to the Union as a State. Article VIII. of this Constitution reads: "The General Assembly may incorporate one banking company, and not more, to be in operation at the same time. The bank incorporated may have any number of branches, not to exceed five, to be established by law; and not more than one branchi shall be established at any one session of the General Assembly. The capital stock of the bank to be incorporated shall never exceed five million dollars, at least one-half of which shall be reserved for the use of the State."
The foregoing is all that is contained in Missouri's first Constitution with reference to corporations. This Constitution, subject to certain amendments, none of which, however, materially affect corporations, remained in force until the adoption of the Drake Constitu- tion in 1865.
The Bank of the State of Missouri was incorporated in 1837, with an authorized capital of $5,000,000, the parent bank to be located in St. Louis and branches to be establislied at such other points in the State as might be deemed advisable by those controlling the insti- tution. The State of Missouri became a partner, subscribing for one-third of its capital stock, and the charter provided that two members of the Board of Directors should be ap- pointed by the Governor of the State. The following namned persons constituted the Board which organized the bank: President, Jolin Brady Smith; Hugh O'Neil, Edward Walsh, Samuel L. Robbin, William L. Sublet, Edward Dobbins, Jolin O'Fallon, D. C. M. Parsons, Thomas West, C. C. Detchemendy, Carney Wells, George K. McGonigle and Theodore S. Magill, with Henry Shields as Cashier. In April of that year the bank begun its operations and became at once a bank of issue. It always mnet its obligations and its currency had a stable value. This was the first incorporated bank in Missouri. It was reorganized in 1857, under the general State banking laws, and in 1866 the stock held by the State of Missouri was sold and the bank was reorganized under the National banking act, as "The National Bank of the State of Missouri," with a paid up capital of $3,410,300.
In 1845, the Legislature of Missouri enacted its first general law relating to corpora- tions. This law defined the powers and limitations of corporations, but in no sense dis- pensed with the necessity of obtaining charters by direct legislative enactment. Section 1 reads :
"Every corporation, as such, has power: First, To have succession by its corporate name for the period limited in its charter, and when no period is limited, for twenty years. Second, To sue and be sued, complain and defend, in any court of law or equity. Third, To make and use a common seal, and alter the same at pleasure. Fourth, To hold, pur- chase and convey such real and personal estate as the purposes of the corporation shall require, not exceeding the amount limited in its charter. Fifth, To appoint such subordi- nate officers and agents as the business of the corporation shall require, and to allow them a suitable compensation. Sixth, To make by-laws, not inconsistent with any existing law, for the management of its property, the regulation of its affairs, and for the transfer of its stock." This section, with slight amendments, has remained in force to the present time.
Prior to the passage of this law, charters granted to corporations by the Legislature had to enumerate their powers, limitations, privileges and immunities; but after its passage it became unnecessary to do so, as these were established by general statute.
The law of 1845 is composed of several sections, forming an entire chapter of the Revised Statutes of that year. It prohibits any corporation from exercising any corporate powers in addition to those inentioned in Section 1, except such as were expressly given in
22
THE HISTORY OF THE BENCH AND BAR OF MISSOURI.
its charter, or necessary to the exercise of the powers enumerated therein. It prohibits any corporation, not expressly incorporated for banking purposes, from discounting bills, notes or other evidence of debt, or receiving deposits, or buying gold and silver bullion or foreign coins, and fromn buying and selling bills of exchange, notes, or other evidences of debt for circulation as money. It prohibits any corporation (excepting banking companies), from becoming indebted in a sum exceeding the amount of its capital stock paid in, and provides in case of any excess of indebtedness, the directors under whose administration such indebt- edness accrued, shall be jointly and severally liable to the extent of such excess, for all the debts of the company then existing and for all that shall be contracted, so long as they respectively continue in office and until the debts shall be reduced to the amount of the capital stock; provided, that any directors not present at the time of the contracting of such excessive indebtedness, or who shall object thereto, may exempt themselves from such liability by giving notice of the fact to the stockholders at a meeting which they may call for that purpose.
In 1849, the Legislature passed the first general law authorizing the organization of corporations other than by special act of the Legislature. This law in substance provided, that at any time after its passage, three or more persons desirous of forming a company, for the purpose of carrying on any kind of "manufacturing, mining, mechanical or chemical business " might inake, sign and acknowledge before some officer competent to take ack- nowledgments of deeds, a certificate in writing, stating the corporate naine of the com- pany, and the object for which it was to be formed; the amount of the capital stock, which should not be less than one thousand dollars; the term of its existence, not to exceed thirty years; the number of shares of which the stock should consist; the number of directors and their names who should inanage the affairs of the company for the first year, and the name of the town or county in which the operations of the corporation .should be carried on. Such certificate was to be executed in duplicate, and one copy thereof filed in the office of the Clerk of the Circuit Court of the county in which the business of the company should be carried on, and the other in the office of the Secretary of State. Then when certificates had been so filed, the Clerk should issue a license to the persons executing the same, on reception of which they and their successors should be a body politic and corporate in fact and in name, capable of suing and of being sued in any court of law or equity in this State.
This law also provided that the stock, property and affairs of the corporation should be managed by a board of directors, consisting of not less than three nor more than nine, who should be stockholders in the company and citizens of the United States, and a majority of whom should be citizens of this State, and that, except as to the first year, such directors should be annually elected by the stockholders. It provided that if the directors of any such company should declare and pay a dividend when the company was insolvent, or the payment of which would render it insolvent, or which would diminish the amount of its capital stock, they should be jointly liable for all debts of the company then existing, and for all that should thereafter be contracted while they respectively continued in office, with the proviso that if any of the directors should object to the declaring of such dividend or to the payment of the same, and should, at any time before the time fixed for the payment thereof, file a certificate of their objection in writing with the clerk of the company, and with the Circuit Court for the county, they should be exempt from such liability. It also provided that nothing but money should be considered as payment of any part of the cap- ital stock, and no loan of money should be inade to a stockholder, and any officers who
23
EVOLUTION OF CORPORATION LAW IN MISSOURI.
should make or assent thereto, should be jointly and severally liable to the extent of such loan, and liable for all the debts of the company contracted before the repayment of the sum so loaned.
This law was amended from time to time by the Legislature until brought to its present status, as embodied in Article VIII, Revised Statutes of 1889. Its provisions are now so comprehensive, that any corporation intended for pecuniary profit or gain without regard to its object, may be created under it, if not otherwise expressly provided for, and not incon- sistent with the laws or the Constitution of this State or the United States.
In 1851, a second general law was enacted, which provided that "Any Lodge of Free Masons, Sons of Temperance, Library Company, Literary or any other Benevolent Associa- tion by whatever name they inay be known, consisting of not less than ten persons, by complying with the requisitions hierein named, may be constituted and declared a body politic and corporate." It points out specifically the steps required to be taken to organize such corporations.
This law is the basis of Article X, Revised Statutes of Missouri, 1889, relating to "Benevolent, Religious, Scientific, Fraternal, Beneficial, Educational and Miscellaneous Associations." As it now stands, it enables churches, schools, hospitals, clubs, fraternal, beneficial and many other associations having no capital stock to become incorporated. Under its provisions thousands of corporations have been created, and much benefit has resulted thereby to the people of the State. The inconvenience of holding property by an association not incorporated, composed of inany members, the uncertainty as to the parties to represent such association in making contracts, or who should be made parties in case of litigation-are all removed wlien the association becomes incorporated.
In 1851 the Legislature of Missouri enacted a general law, authorizing the creation of corporations for the purpose of constructing and owning plank roads and regulating thie toll which might be charged for the use thereof. This law was amended so as to include gravel and macadamized roads. It forms the basis of Article IV, Revised Statutes of 1889. Before the era of railroads there were many plank, gravel and inacadamized toll roads, owned and operated by corporations organized under this law. They greatly benefited the people of the State, in that they were used as post roads, facilitating the carrying of the mails at all seasons of the year, and, also enabling farmers to market their crops without regard to the condition of ordinary roads. There are places in the State where these roads still are a boon to the inhabitants. Notwithstanding the numerous railroads, there are in this State nineteen plank, gravel and turnpike roads organized under this law, still in operation, known as toll roads.
In 1849, the " Pacific Railroad, " known as the "Missouri Pacific Railroad, " the first incorporated in this State, obtained its charter from the Legislature, granting to it power to construct its road from St. Louis to Jefferson City, and tlience to the western line of Van Buren County (now known as Cass), with a view that the same mnight thereafter be continued westwardly to the Pacific Ocean. This was the dawning of a brighter day for Missouri. Many, no doubt, at the time, thought it impossible that a road should ever be built to the Pacific Ocean. In less, however, than thirty years it was accomplished, and to-day four well equipped roads, with connections, span the continent from east to west upon American soil; and one in British Columbia and Canada.
On the 3rd day of March, 1851, special charters were granted by the Legislature to two additional railroad companies, viz: St. Louis & Iron Mountain Railway Co., authorizing
24
THE HISTORY OF THE BENCH AND BAR OF MISSOURI.
it to construct a railroad from the City of St. Louis to Iron Mountain and Pilot Knob, Mis- souri; and the North Missouri Railroad (now known as the Wabash Railway Co.), author- izing it to construct a railroad from St. Charles, Missouri, to the northern boundary of the State, in the direction of Fort Des Moines, in the State of Iowa. Other railroad charters were granted by direct act of the Legislature, but the three above named are the most important.
In 1853 the Legislature passed a general act authorizing the organization of railroad corporations by complying with its terms. It is composed of fifty-six sections and was an ably written act. It forms the basis of Article II, embracing one hundred and twenty-nine sections, of the Revised Statutes of 1889, composing a comprehensive statute relating to the organization of railroad corporations, their powers, privileges and duties. Prior to 1853 a railroad could be incorporated in Missouri only by a direct Legislative act granting the charter. Since then such corporations obtain charters by complying with the general laws.
The general law for the organization of railroad corporations, approved in 1853, author- ized the County Court of any county and the City Council of any city to subscribe to the capital stock of any railroad duly organized under that act, or any other act in this State, by complying with certain terms and conditions. At the close of the Civil War the people of the State were possessed with a mania for constructing railroads. Counties and cities becaine liberal subscribers to the capital stock for this purpose; and, in so doing, in many instances, greatly burdened the tax-payers. Not only so, but by legislation, counties and cities were empowered to grant bounties by way of municipal bonds as a bonus to railroad corporations; and this power was exercised to an unprecedented degree. The burden of taxes to meet these obligations was such that many municipalities sought to repudiate the indebtedness, and, doubtless, often would have succeeded, but for the timely interposition of the United States Courts. Prosperous times have enabled the people of the State to ineet these obligations and now but little of the indebtedness incurred by counties and cities from such subscriptions to stock and the issuing of such bonds remains unpaid. The intersection of all parts of the State at present with railroads has greatly advanced the material and intellectual development of the people of the State. At the present time, there exist in Missouri one hundred and forty railroad companies, organized under the laws of the State, obtaining their charters mainly by complying with the general law. These railroads, however, are operated, at present, by only fifty-seven distinct companies.
The Legislature granted special charters to twenty-five insurance companies in 1859; to ten in 1861; and to eight in 1864. Before 1859 there were numerous chartered insurance companies existing in this State, created by special acts of the Legislature, but after the adoption of the Constitution of 1865, commonly known as the Drake Constitution, no cor- poration, for this or any purpose, other than municipal, could obtain a charter by special act of the Legislature. This Constitution contains only six sections relating to corporations, and as they are brief, and have an important bearing on corporations, they are set out in full :
SECTION 1. "No corporate body shall hereafter be created, renewed, or extended with the privilege of making, issuing or putting in circulation any notes, bills or other paper, or the paper of any other bank, to circulate as money, and the General Assembly shall prohibit, by law, individuals and corporations from issuing bills, checks, tickets, promissory notes and other paper to circulate as money.
SEC. 2. "No law shall be passed, reviving or re-enacting any act heretofore passed, creating any private corporation, where such corporation shall not have been organized and
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EVOLUTION OF CORPORATION LAW IN MISSOURI.
commenced the transaction of its business, within one year from the time such act took effect, or within such other time as may have been prescribed in such act for such organ- ization and commencement of business.
SEC. 3. "The General Assembly shall at its first session after this Constitution goes into effect, enact laws enabling any of the existing banks of issue to reorganize as National banks under the act of Congress, and shall also provide for the sale of the stock owned by this State in the Bank of the State of Missouri, upon such terms and conditions as shall be established.
SEC. 4. "Corporations may be formed under general laws, but shall not be created by special acts, except for municipal purposes. All general laws and special acts passed pursuant to this section may be altered, amended or repealed.
SEC. 5. "No municipal corporations, except cities, shall be created by special act ; and no city shall be incorporated with less than five thousand permanent inhabitants, nor unless the people thereof by a direct vote upon the question shall have decided in favor of such incorporation.
SEC. 6. "Dues from private corporations shall be secured by such means as may be prescribed by law; but in all cases each stockliolder shall be individually liable, over and above the stock by him or her owned, and any amount unpaid thereon, in a further sum at least equal in amount to such stock."
Prior to the adoption of this Constitution, corporations and individuals had issued script which was circulated as inoney, but Section 1, quoted, abolished this pernicious practice. Section 4 prohibited the Legislature from granting special charters to corporations other than municipal, and, in doing so, destroyed a fruitful source of legislative corruption. It also led to additional legislation enabling corporations to organize pursuant to general laws, Section 6, created a double law liability against stockholders of corporations, making each liable to pay a sum equal to double the face value of the stock subscribed by him. This proved a source of much litigation. The people of the State were dissatisfied with this law, and it did much to retard the organization of corporations during the time it was in force. At the election in November, 1870, Section 6, above quoted, was amended so as to limit a shareholder's liability to the amount of stock by him subscribed, and in the Constitution of 1875, still in force, is found the same provision.
The Constitution of 1875 contains eleven sections, of which Section 4 secures inviolate the right of trial by jury in all cases of the taking of private property for public use; Section 5 provides that the exercise of police power of the State shall never be abridged or so con- strued as to permit corporations to conduct their business in such manner as to infringe upon the equal rights of individuals or the general well-being of the State; Section 6 per- inits cumulative voting by stockholders in a corporation ; and Section 8 prohibits the fictitious issue of stock or bonds by corporations.
The Revised Statutes of Missouri of 1865, contain the first general law relating to the organization of insurance companies. In its scope it covers fire, marine, life, health, accident and stock insurance. It forins the basis of our present comprehensive system of insurance laws. There now exist in Missouri, only two stock fire insurance companies, organized under the laws of this State. In addition to these there are only 12 mutual fire insurance companies, making only 14 fire insurance companies doing business in this State organized under its laws. There are, however, 89 fire and marine insurance companies organized under the laws of other States authorized to transact business in this State. And
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