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follows: "So far as it affects private corporations, its functions are few and simple, and its powers very limited. With respect to these corporations, the commission only issues and amends charters as above explained, and sees that they make such annual reports as the statutes may require of them." This, in connection with another statement made in the synopsis referred to, that all private legislation granting charters or corporate powers of any sort is strictly forbidden, and that such matters are to be provided for by general laws of which all persons will be free to avail themselves, clearly indicates that in the enactment of laws for the creation and government of private business corporations in this State, the Legislature will have a rather free hand. And it is not going too far to say that the work of adjusting the statute law to the organic law upon this subject is scarcely of less importance than that performed by the convention in framing this part of the organic law.
In the first place, it is important to determine how far the Legislature should go in this business, and how much should be left to the courts to be wrought out under the general law pertaining to corporations. This suggests a partial consideration of the issue between the Codifiers and Anti-Codifiers.
Jeremy Bentham, the great apostle of Codification, never lost an opportunity of denouncing the common law in the most unmeasured terms, and maintained, with all the earnestness of his nature, that all the laws of a country should be in writing; and in the event a case should arise not within the provisions of the written code, he thought it should be left undecided. The Legislature might, by amending the law, provide for similar cases in the future, but as to what disposition is to be made of the case which arose when there was no statute covering it, is left an open question. His contention was that as justice and right are the foundations of all law, "Legislators, having freed themselves from the shackles of authority, have learned to soar above the mists of prejudice, know as well how to make laws for one country as another.” He did, indeed, admit that a Code maker ought to have some knowledge of the circumstances of those for whom it is made; but at the same time maintains that a foreigner could better draft a Code for a people than one of their own number, because less prejudiced.
Montesquieu, it may be observed, held an opinion directly to the contrary, .maintaining that the laws of one nation can rarely, if ever, be adapted to the wants of another.
In the interesting address of Professor Charles Noble Gregory, of Wisconsin, before this Association, at its annual meeting in 1900, upon "Bentham and the Codifiers," to be found in the Report of that year, we are told of the multitudinous labors of Bentham in his efforts to reform the law, and especially in the manufacture of codes. He prepared a code for almost every civilized or semi-civilized nation and people of his day, and besides usually kept a ready-made stock on hand.
And his codes were not made for one branch of the law only, but covered the entire field. In the same address we are told of the work of Bentham's English disciples, conspicuous amongst them being Sir James Fitz James Stephen and John Austin, and of his American followers, amongst whom are Edward Livingston and David Dudley Field, in the work of law reform, and declares that scarcely a single reform has been effected within the last century that was not suggested and advocated by Bentham. But in ascribing so much credit to Bentham and his followers, it may be suggested that Professor Gregory, for the most part, overlooked the operation of the law of evolution which always keeps pace with the progress of civilization, and is indeed a part of this progress, and the probability that the changes in the law of which he speaks might have been largely the result of this law.
At the first annual meeting of this Association, which was held in 1889, the principal address was made by Mr. James C. Carter, of New York, whose subject was “The Provinces of the Written and the Unwritten Law.” And it was an address of great ability, evidencing deep research and reasoning powers of the highest order.
Dividing the laws of a State into two parts, one of which he designated as public and the other as private, he maintains
that the portion which he describes as public law must of necessity be written, but that the other part, the private law, should not be, because, amongst other reasons, it cannot be. The public law, he says, consists mainly of ordinances dividing the State into various political districts and creating governmental machinery, general and local, providing for the creation of a great variety of offices, and prescribing their duties, and a great many other things pertaining to the State as a gigantic and complicated corporation, which he declares it to be. All laws for this purpose, from their very nature, must be in writing; for as but very few of them are laws for the regulation of conduct, only a very few have any direct relation to the science of jurisprudence, and consequently cannot be evolved from the original sources of law through the process of judicial decision. On the other hand, it is contended to be impossible for the private law, by which is meant that great body of rules for the regulation of the conduct of men in their ordinary transactions with each other, and which principally engages the attention of lawyers and courts, to be reduced to writing, because in this department or realm of law are constantly arising cases, which it is impossible to foresee, or even to conjecture, and, therefore, cannot be provided for beforehand. It is maintained that the law must necessarily follow the facts of a case, and cannot be declared or ascertained until the actual facts arise and are seen in all their circumstances and environinent. Only in this way has the law in Great Britain and in this country been developed heretofore, the courts always having resort in the last alternative to the principles and spirit of that eternal justice "which sits enthroned behind all human enactments and julicia! decrees." Whilst taking this general view, it is conceded by Mr. Carter that there are occasions in the life of every State for making abrupt changes in the body and policy of private law, and such changes can be effected only by legislative intervention.” And he might have added, with safety, that there are other occasions, owing to conflict of decisions amongst the courts and other causes, which require
the action of the law-making power, however difficult'or indeed impracticable it may be to completely codify the law, or indeed any particular branch or department of it.
The act of the General Assembly, approved March 3, 1898, and designated as the Negotiable Instruments Law, is more or less an attempt to codify the law of commercial paper, although it is declared to be an act “to revise, arrange and consolidate into one act the laws relating to negotiable instruments (being an act to establish a law uniform with the laws of other States on that subject).” It could not have been intended as a complete codification of this branch of the law, and considered as sufficiently comprehensive to cover all cases that can possibly arise, for it is expressly stated that “in any case not provided for in this act the rules of the law merchant shall govern.”
But the Codifiers and Anti-Codifiers are agreed that some portion of the private law should be embodied in statutes, and whilst it would be, so far as I am capable of judging, decidedly injudicious to attempt a codification of the laws relating to private business corporations that will aim to embrace all cases whether they have heretofore arisen or not, there must be legislation sufficient to give the provisions of the new Constitution full force and effect, and also to provide for the government and regulation of this class of corporations in a variety of other very important respects.
My suggestions in respect to this legislation must needs be brief, and only of a general character.
In the first place, it will probably be found necessary to discard the chapters of the Code pertaining to corporations as they now exist, and to recast the law of the subject. This observation is more particularly applicable to the arrangement of the present law. It contains some good provisions, and these can be utilized in the new structure and made clearer and better than they are in their present form and connections.
No merely speculative corporations are needed in Virginia. As a general rule, they are evil and only evil. Sometimes a railroad is built on speculation by a company chartered for the purpose, and after it is built the country through which it
passes is more or less benefited by it; but such a company almost invariably passes through several reorganizations before it gets into good working condition, with the result that shareholders who pay money for their stock, lose it all, and frequently some classes of bondholders fare no better. moters and manipulators get everything.
But at present, we are considering private business corporations, usually designated as joint stock companies, and it may with safety be affirmed of these that they should never be formed for other than purposes of legitimate business.
Nor should one company of this character be allowed to engage in business of too many different kinds. In the laws of a number of the States the different kinds of business that may be done by an incorporated joint stock company are specified, and in some of the States no one corporation can engage in more than one or two of these different kinds of business. I have known charters to be granted to joint stock companies by courts in this State, which undertook to confer upon a single company the right to engage in any and every kind of business that it is lawful for an individual to engage in. If this is allowable, the stockholders in such a company could do, or have done for them, the work of their lives in all its various departments, upon a basis of limited liability. The unincorporated public in doing business with these incorporated companies or associations would spend much time in the examination of their charters and in looking into their condition before determining whether they are worthy of credit. And the greater the variety of business a single corporation is allowed to do, the more nearly would the inconvenience and risk of those dealing with it approximate that inconvenience and risk of dealing with a corporation chartered to do anything and everything an individual may do, acting in his own right and upon his unlimited liability.
As, according to the Declaration of Independence, all men are created equal and all are endowed by their Creator with certain unalienable rights, so, according to my Lord Coke, who was the embodiment of the spirit of the common law, “when