This section is from the book "Popular Law Library Vol8 Partnership, Private Corporations, Public Corporations", by Albert H. Putney. Also available from Amazon: Popular Law-Dictionary.
Section 1. The comprehensive and remarkable descriptive definition by Chief Justice Marshall in the celebrated Dartmouth College Case is undoubtedly the best known and has been more frequently cited and quoted than any other: - "A corporation is an artificial being, invisible, intangible, and existing only in contemplation of law. Being the mere creature of the law, it possesses only those properties which the character of its creation confers upon it, either expressly or as incidental to its very existence. These are such as are supposed to be best calculated to effect the object for which it is created. Among the most important are immortality (in the legal sense that it may be made capable of indefinite duration), and, if the expression may be allowed, individuality, properties by which a perpetual succession of many persons are considered the same, and may act as a single individual. They enable a corporation to manage its own affairs, and to hold property without the perplexing intricacy, the hazardous and endless necessity of perpetual conveyances for the purpose of transmitting it from hand to hand. It is chiefly for the purpose of clothing bodies of men, in succession, with these qualities and capacities that corporations were invented and are in use.
"By these means a perpetual succession of individuals are capable of acting for the promotion of the particular object like one immortal being." 1
1 Dartmouth College vs. Woodward, 4 Wheat., 636. To the commercial world the following definition of a corporation Judge Dillon, the recognized American authority, in his admirable work on municipal corporations, defines a corporation as follows: - "It is a legal institution, devised to confer upon the individuals of which it is composed powers, privileges, and immunities which they would not otherwise possess, the most important of which are continuous legal identity or unity, and perpetual or indefinite succession, under the corporate name, notwithstanding successive changes, by death or otherwise, in the corporators or members of the corporation." 2
Our United States Supreme Court has defined a corporation in the following language: "An association of individuals, acting as a single person .... united for some common purpose .... and permitted by the law to use a common name and to change its members without a dissolution of the Association." 3
The idea of immortality is the dominant and characteristic feature of a corporation and plainly distinguishes it from a natural person, as the members may die, but the corporation continues as a perpetual unity unaffected by their death. Another distinguishing quality is that it acts as a unit, distinct by the late astute business man, Jay Gould, may be worthy of note: "A body of men who unite, associate, and concen trate their ability, capital and intelligence in the undertaking of a work, great or small, which any one of them would individually be unwilling to undertake. If there are losses, they agree to bear each his proportion; if there are profits, they agree to divide them." Taylor, Corp., Par. 23. 2 Dillon, Mun. Corps. (4th ed.), Vol. I, Par. 18: "A private corporation is one which is created for the purpose of enabling private persons in their private capacity to attain some end which cannot be conveniently attained without incorporation, and for their own benefit; although in connection with such private benefit there may be, and usually is likewise some public benefit flowing from the proposed incorporation." See Tiedeman, Private Corporations. 3 U. S. vs. Trinidad Coal Co., 137 U. S., S C, 160.
from its members, and this legal fiction of separate corporate identity prevails under the English common law and is quite generally upheld by the American courts. "A corporation is distinct from its members in the same sense that a State is distinct from its citizens. The parallel, indeed, between a corporation and a State is very close. A State is generally spoken and thought of as a person, because that is the simplest way of picturing to the mind the collection of powers and obligations connected with the idea of a State. The citizens have certain powers and duties, and the State may execute their will when expressed in certain forms; but to fail to treat a State, either in its domestic or foreign relations, as something dictinct from its citizens, would lead not only to theoretical error, but to endless practical difficulties." 4