Story Case

Andrew Lawrence and four other men organized a corporation in an eastern state, called The United Liquor Stores, Inc. Through this corporation, these men conducted a number of liquor vending establishments. The United Liquor Stores, Inc., planned to establish a store in one of the western states where the Secretary of State refused to issue it a license, on the ground that the state statute required "that no license shall be granted to any person to sell spirits or other intoxicating liquors unless he shall have been a natural born citizen of the United States or naturalized three years prior to making application for license." The statute was silent on the point of a corporation's selling liquors, but the Secretary of State maintained that corporations were excluded, by implication, from having this right. This was his defense when an action in mandamus was brought against him to compel him to issue a license. The United Liquor Stores (Inc.) contended, that it was an accredited person created by the law and, since the right to own a license was not expressly forbidden, this franchise should be given. Which contention is correct?

Willmott Vs. London Road Car Co. Ltd., English Law Reports, Chancery Division, 1910, Volume 2, Page 525

Willmott owned a livery stable which he leased to a man named Porter. Porter agreed not to sub-let or to allow any part of the premises to go into the possession of another without the consent of Willmott, but Willmott agreed not to withhold his consent whenever Porter wished to turn the lease over to any " respectable or responsible person". Porter applied for Willmott's consent to an assignment of the lease to the defendant, which was a corporation that had an omnibus line in London. Wilmott refused to consent, and Porter completed the assignment without his permission. Willmott sued the company, to have it dispossessed and its lease held void, but the company contended that the assignment was good without the consent, because Willmott had agreed in advance not to object to a "respectable or responsible person." The plaintiff claimed that a corporation was not capable of being a person, particularly not a " respectable or responsible person."

The opinion of the Court was delivered by Mr. Coz-ens-Hardy, Master of the Rolls. It was pointed out that in very many legal writings, the word "person" had been denned to include two classes, natural persons and artificial persons, meaning men and corporations. In statutes applying to "persons" the word had always been held to include corporations. Therefore, whenever it required a legal definition, even in an ordinary writing like a lease, the word "person" should be held to include a corporation. However, if there were clear evidence in the passage which showed an intention to limit the meaning to natural persons, a corporation could rightly be said to be excluded. The court considered whether the words "respectable or responsible" here indicated such an intention. The corporation could easily be responsible, in the sense that it was financially sound and could meet its obligations, but "respectable" carries some implications of a human personality, a capacity for moral or immoral conduct. But even that word is in ordinary language applied to a corporation; we speak of a respectable bank, or a respectable insurance company, referring to the mode in which the company conducts its business. Corporations have even been allowed to protect their reputations for good character and respectability by actions for slander and libel. It was therefore held that the words "respectable or responsible person" did not necessarily refer to a human person, but that a corporation could be included. The London Road Car Company, Limited, was a respectable and responsible person, and Willmott was bound to consent to the transfer of the lease to it. He, therefore, could not succeed in this action to dispossess the company.

Judgment was given for the defendant, The London Road Car Company.

Ruling Law. Story Case Answer

For most purposes a corporation is regarded as a person; not as one having all the characteristics of a natural person; but, in legal contemplation as an artificial being, having such characteristics and attributes of a person as the law confers upon it. So far as it has such characteristics and attributes, it is to be treated as a person. Where statutes are passed creating rights or duties in respect to persons," a corporation may enjoy those rights or perform those duties as a person within the meaning of such statutes, unless the intention clearly appears otherwise." In the Story Case, it seems evident that the legislature, in creating the statute in point, by implication, excluded corporations. The contention of the Secretary of State was correct.