William M. Lacy James Kent.

Commentaries on American law, Volume 2 online

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essential principles laid down by the court in the case of Dartmouth College
r. Woodwafd, were asserted and applied with great ibrce by Mr. Justice
Htory. iD*the case of Allen r. McKeen, 1 Sumner, 376, to Bowdoin College in
the State of Maine. That college la a private corporation, of which the State
of . Masaachusetts is founder, and the visitatorial and all other powers and
ftuDchises are vested in a board of trustees under the charter, and they have
a permanent right and title to their offices.

cirporation for damages does not depend upon whether it is public or pri-
vate, but whether the franchise is created for private emolument or exclu-
Mively for the pnblic good. Tinsman t>. Belvidere & Delaware R. R. Co., 2
Oiitch. 148; see Dearborn v. Boston & Montreal R. R. Co., 4 Post. 179;
Miners* Bank of Dnbnque v. United States, 1 Greene, 553; Turnpike Co. r.
Wallace. 8 Watts. 316; Cleaveland v. Stewart, 3 Oa. 283; Ten Eyck v, Dela-
ware & Raritan Canal, 3 Harring, 200.


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they were preserved from forfeiture by reason of any nonaser or
misuser of their powers, daring the disorders which necessarily
attended the revolation. There is no particnlar form of words
reqnisite to create a corporation. A grant to a body of men to
hold mercantile meetings, has been held to confer a corporate
capacity (a). A grant of lands to a county or hundred, render-
ing rent, would create them a corporation for that single intent,
without saying, to them and their successors (&).

There is no doubt that corporations, as well as other pri-
vate rights and franchises, may also exist in this coan-
[*277] try *by prescription; which presupposes and is evi-
dence of a grant, when the acts and proceedings on
which the presumption is founded could not have lawfully pro-
ceeded from any other source (c).* It requires the ojccqptance oi
the charter to create a corporate txxiy ; for the government cannot
compel persons to become an incorporated body without their
consent, or the consent of at least the major part of them (d).*
The acceptance may, in many cases, be inferred from the acts of

(a) The case of Sutton's Hospital, 10 Co. 27, 28, 30. 1 Rd. Ahr. tit Cor-
poi-ation, F. Denton o. Jackson, 2 Johns. Ch. Rep. 325.

{b) Dyer's Rep. 100. a, pi. 70, cited as good law by Lord Kenyon, in 2
Tenn Rep. 672. 1 Rol. Ahr. tit. Corporations. F. 3, 4.

(r) Dillingham r. Snow, 3 Mass. Rep. 276. Stockbridge r. West StockbridRe,
12 lifid. 400. Hageretown Tarnpike Co. r. Creeger, 5 Harr. 4& Johns. 122.
Green r. Dennis, 6 Conn. Rep. 302. Angell <t- Ames on Corporations, 40, 41.

((f) Yates, J., 4 Burr. Rep. 2200. Lord Kenyon, 3 Term. Rep. 240. Elli»
r. Marshall, 2 Mass. Rep. 269. Lincoln and Ken. ^nk v. Richardson, 1
Greenleafs Rep. 19.

*^For presumptions as to corporate existence. Bank r. Dandridge, 12
Wheat. 71 ; Bank of Kentucky r. Schuylkill Bank, Pars. Sel. Cas. 180; Com-
monwealth V. Cullen, 13 Pa. St. 133; Narragansett Bankf^. Atlantic Silk Co.,
3 Mete. 282; Middlesex Hu.sbandman ^ Manuf. r. Davis, Id. 133; State e.
Helmis, 2 Penning, 764; Methodist Episcopal Church v. Pickett, 19 N. Y.
482; British Amer. Land Co. jr. Ames, 6 Mete. 391. For proof by repnta-
tion. Barnes v. Barnes, 6 Vt. 388; State v. Fitzsimmohs, 30 Mo. 236; Bow
r. Allenstown, 34 N. H. 351. Proof by user. Utica Ins. Co. v. Tillman. 1
Wend. 555; President. Trustees, &c., v. Thompson, 20 111. 197; Abbottt. As-
pinwall, 26 Barb. 202; People v. Frank, 26 Cat. 507; Williams v. Bank of
Michigan, 7 Wend. 539; Jones v. Dana, 24 Barb. 395; Methodist Episcopal
Union Ch. v, Pickett, 19 N. Y. 482.

• After they have elected to accept the charter the dnties and liabilitifs
attach and cannot be divested except by forfeiture or repeal. Riddle v. Pro-
prietors of Locks & Canals, 7 Mass. 169; Goschen, &c.. Turnpike Co. r. Sears,
7 Conn. 86; and a voluntary acceptance will bind. Bnshwick & Newtown
Bridge Co. v. Ebberts, 3 ^w. 353. The acceptance must be in Mo. Rex v.
Westwood, 7 Bing. 1, 90. It is not necessary that munidpal corporations or
corporations under general acts should accept the rule only applying to pri-
vate corporations. Gorham v. Sprinfrfield, 21 Maine, 58; Berlin «. Gorham,
34 N. U. 266; Spring Valley Water Works v. San Francisco, 22 Cal. 434.



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the majoritjof the corporators; and a written inatrameQt, or vote
of aoceptanoe, Ib not indispensable (a).*^

IIL Of the powers and capacities of corporations.
When a corporation is duly created, many powers, rights, and
capacities are annexed to it Some of them are deemed to be
necessarily and inseparably incident to a corporation by tacit
operation, withoat any express provision ; though it is now very
geoerally the practice to specify, in the act or charter of incor-
poration, the powers and capacities with which it is intended to
endow the corporation.

(I.) Of their ordinary powers.

The ordinary incidents to a corporation are, 1. To have per-
petaal succession, and, of course, the power of electing members
ia the room of those removed by death or otherwise; 2. To sue
and be sued, and to grant and to receive, by their corporate name;
3. To purchase and hold lands and chattels; 4. To have
a common seal; *5. To make by-laws for * the govern- [*278]
ment of the corporation; 6. The power of amotion, or
removal of members. Some of these powers are to be taken, in
many instances, with much modification and restriction; and the
essence of a corporation, according to Mr. Kyd, coDsists only of a
capacity to have perpetual succession, under a special denomina-
tioD, and an artificial form, and to take and grant property, con-
tract obligations, and sue and be sued, by its corporate name,
and to receive an^ enjoy, in common, grants of privileges and
immunities {b). According to the doctrine of Lord Holt (c),

(«) Chftrles River Bridge i». Warren BHdice, 7 Pick. Rep, 344, Parker, Ch.
.T., and Wilde, .T. Bank of U. S. v. Dandridge, 12 WIteaimi, 70, 71.

(6) 1 Kjfd on Corp. i:{, 69, 70. Blackstone says, that the first five incidents
mentioned in the text, are indeparahly incident to every corporation af^e-
pite. The New York statute also declares, that they are powers which vest
in every corporation withoat being specified. 1 Blacks, Com. 475. N. Y. Re
rimd Staiutes, vol. i. p. 599. But In the case of Suiton^s Hospital^ 10 Co. 30,
b. 31, a. it was held, that to make ordinances or by-laws, was not of the ea*
wnce of a corporation, and no donbt a valid corporation may be created by
law, withoat any other essential attnbntes than those mentioned by Kydy

(f) The King v. The City of I»ndon, Skinner's Rep. 310.

'* Any nneqni vocal act, showing a desire and intention to accept is snffi-
cient ii the act of the roigority. Bt. Paul Division, &c., v. Brown, 11 Minn.
356; RoflBell v. Mcl.ellan, 14 Pick. 6:5; Rex r. Hugheg, 7 B. & C. 706. The
application for, and appearance before the legislature of any of its directors
with the assent of the others. State r. Dawson, 22 Ind. 272. Acceptance
implifd, by acting nnder it. Bangor, ^., R. R. Co. v. Smith, 47 Me. 34.
Presomed from lapse of time. Middlesex Husbandmen Manuf. Socy. v.
Davis, smpra; Giflbid v. N. J. R. R. Co., 2 Stockt. 171.



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neither the actaal possession of property, nor the aotoal enjoy-
ment of franchises, are of the essence of a corporation."

(2.) Of qucui corporations.

There are some persons and associations who have a corporate
capacity only for particular specified ends, but who can in that
capacity sue and be sned as an artificial person (a). Thus, in
New York, each county, and the supervisors of a county, the loan
officers and commissioners of loans, each town, and the super-
visors of towns, the. overseers of the poor, and superintendents
of the poor, the commissioners of common schools, the commis-
sioners of highways, and trustees of school districts, are all in-
vested with corporate attributes sub modo. The supervisors of
the county can take and hold lands for the use of the county;
and all those several bodies of men are liable to be sued, and are
enabled to sue in their corporate capacity (6). Every county and
town is a bo^ politic for certain purposes, and this is no doabt
the general provision in this country, and especially in the
northern states, in respect to towns (c). So, at common law,
every parish or town was a corporation for local necessities, and
the inhabitants of a county or hundred might equally be incor-
porated for special ends {d). In short the English law
[ * 279 ] * afiPords many, and our American law more numerons
examples, of persons and collective bodies of men en-
dowed with a corporate capacity, in some particulars declared,
and without having in any other respect the capacities incident
to a corporation (e)."

(a) Gibson, Ch. J., the Commonwealth o. Green, 4 Wharlon R. 531.

\h) N. Y, R, L, vol. ii. p. 473. See, also, the statute laws of the seTer&l
states, in pari maierUL

(e) N. r. R. L, vol. i. p. 337, 364. Siabiie Lam of Ohio, 1831. Beoimd
Statutes of MawaehwetU, 1K;{5. RevUted Staiutes of Indiana, 1838.

{d) Hobart, 212. 5 Cb. 63. Chamberlain of London's case, 1 Mod. Rep.
194. Rogers v. Davenant, Djfer's Rep. 100. Lord Kenyon, in 2 Term Rep.

{e) Jackson r. Hartwell, 8 Johns. Rep. 330. Denton v. Jackson, 2 Johna.
•*' Strictly speaking, a corporation has no powers except such as are given,
by the incorporating act, expressly or incidentally. Beaty v. Knowler, 4
Pet. 152. S. C. 1 McLean, 41 ; Perrine r. Chesapeake & Delaware Canal Go.,
9 How. 172; Brady r. Mayor of N. Y., 90 N. Y. 312; Commonwealth «. Erie
& North Eastern R R. Co., 27 Pa. St. 3:»; Caldwell v. City of Alton, 33 III.
416; Smith v. Morse, 2 Cal. 524.

'^ Thus a grant of lands by the sovereign authority to a body of men and
their associates and successors to he held for pnblic purposes ot a municipal
nature confers a quasi con>orate capacity. Commissioners of Bath v. Boyd,
1 Ired. I^w, 194; People v. Schermerhorn, 10 Barb. 540.



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(3.) Of corporations as trustees,

A corporation being merely a political institution, it has no
other capacities or powers than those which are necessary to carry
into eftect the pnrposes for which it was estabb'shed. A corpora-
tion is incapable of a personal act in its collective capacity (a).
It cannot be considered as a moral agents and, therefore, it can-
not commit a crime, or become the subject of punishment, or take
an oath, or appear in person, or be arrested or outlawed (6). It
was formerly understood that a corporation could not be seised
of lands to the use of another, and that it was incapable of any
086 or trust, and consequently that it could not convey lands by
bargain and sale (c). But the objection, that a corporation
conld not convey by bargain and sale, was utterly rejected by the
C. B., in the case of Sir Thomas Holland v. Bonis (d), as a
dangerous exception to the capacity to convey ; and at this day
tb<^ only reasonable limitation is, that a corporation
*cannot be seised of land in trust, for purposes foreign [ * 280 ]
to its institution (e)." Equity will now compel cor-
porations to execute any lawful trust which may be reposed in
them; and, in the case of the Trustees of Phillips* Academy v.
^^^ (o)^ it was held, that a corporation was capable of taking
and holding property as a trustee. Many corporntions are made
trostees for charitable purposes, and are compelled, in equity, to
perform their trusts (h). Corporations appear to be deemed

Ck, Rq^. 325. Todd V. Birdsall, 1 Oowm'H Rep. 260. Grant v. Fancher, 5
RAd. 309. North Hempstead o. Hempstead, 2 Wendell^ Rep, 109. School
District in Kumford r..Wood, 13 Mtm, Rep. 193. Overseers of N. W. v,
Orereeere of 6. W., 3 Serg. A Rawle^ 117. Angell A Ames on Corporations, Itt.
See, also, nupra, p. 274.

(a) IKffdonCorp. 225.

(b) 1 Jbid. 71, 72. 1 Blacks. Com. ATI. • From the carrent of modern dcci-
moos. there can be no doubt, however, that a corporation, equally with an
iodividaal, may gain a freehold by a disseisin committed by its agent,
whether authorized by deed or vote. Angell dk Amea on Corporations, 103.

(e) Bro. tit. Uses, pi. 10. Bacon on Uses, 57. Qilbert on Uses, by Sugden,
«, 7.

{d) 3 Lean Rep. 175.

(e; Jackson r. Hartwell, 8 Johns. Rep. 422.

ig) VtMass. Rep. 54^.

[k) Green v. Rutherfi)rth, 1 Vcs. 462, 468. 470, 475. Gilbert on Uses, by
Sttgden, 7 note. 1 Kyd on Corp. 72. 2 Johns. Ch. Rep. 384, 389. Mr. Pres-
ton, in his Treatise on Conveyancing, vol. ii. pp. 247, 254 — 257, 263, insists,
that the more approved authority and better opinion is, that a corporation
caiinot stand seised to a use on sl conveyance to them, though a corporation
may he a cestui que use. In one case it jias been admitted, that a corporation

'^TrusteeH, &c., Methodist Seminary v. Peasclee, 15 N. H. 317; and note
Boberuwu c. i^uUions, 11 N. Y. (1 Kern) 243;



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competent to perform the duties of trastees, and to be proper
and safe depositories of trusts; and among the almost infiuite
variety of purposes for which corporations are created at the pre-
sent day, we find them (a) authorized to receive and take by deed
or devise, in their corporate capacity, any property, real and per-
sonal, in trust, and to assume and execute any trust so created
and declared. The court of chancery is vested with the same
jurisdiction over these corporate trusts, which it ordinarily pos-
sesses and exercises over other trust estates. Corporations are also
created with trust powers of another kind; as for the purpose of

loaning money on a deposit of ^oods and chattels, by
[ * 281 ] way of pledge or security (&)." It will *soon become

difficult to trace the numerous and complicated modi-
fications which corporations are made to assume, and the mach
greater diversity of objects for which they are created. We are
multiplying, in this country, to an unparalleled extent, the insti-
tution of corporations, and giving them a flexibility and variety
of purpose unknown to the Boman or the English law. The study
of this title is becoming every year more and more interesting and

might give a use ; and therefore a bargain and sale in fee by a corporation
would be good. But if a corporation can give a use, it can, upon the same
principle, equally stand seised to a use, and the rule ought to be oonsisteDt
and uniform, either that a corporation can give and stand seised to a use, or
that they can do neither. The New York statute of May 14th, 1840, ch.
318, with just and politic liberality authorizes any incorporated college, or
other literary incorporated institution, to take a grant or conveyance of real
or personal estate, to be held in trust; (1.) For an observatory ; (2.) To
found and maintain professorships and scholarships; (3.) To provide and
keep in repair a place of burial for the dead; (4.) F<»r any specific purpoee
within the authorized objects of their charter. Beal and personal estate
may also be conveyed to any city or village corporation in trust for educa-
tion, for the diffusion of knowledge, for the relief of distress, and for orna-
mental grounds, upon such conditions as the grantor or donor, and the corpora-
tion may agree to. It may also be conveyed to the oommiasioners of com-
mon schools, and trustees of school districts, for the benefit of common
schools therein.

(a) See Farmer's Fire Insurance and Loan Company, Latca of X. V., April
17th, 1822, ch. 240.

(b) The New York Lombard Association, Law of N. K, April 8th, 1834,
ch. 187.

^* If a corporation has a legal capacity to hold real and personal property,
it may hold it upon trust as a private person might do. Vidal v. Girard, 2
How. 127; and it may be trustee for a charity if not inconsistent with its
purposes. Chapin r. School District No. 2, Winchester, 25 N. H. 445. See,
further, Harris v. American Bible Socjety, 4 Abb. Pr. N, S. 421; Tappan r.
Delbois, 45 Maine, 122. It has been decided, that it may accept property
partly for its own use and partly iu trust. In re Howe, 1 Paige, 214.



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(4. j Of their capacity to hold lands, and to sue and be sued.
It was incident, at common law, to every corporation, to have
a capacity to purchase and alien lands and chattels, unless thej
were spedallj restrained by their charters, or by statnte (a). In-
dependent of positive law, all corporations have the abeolnte jus
disponeiidij neither limited as to objects, nor circamsoribed as to
quantity. This was so understood by the bar and court, in the
modem case of The Mayor and Commonalty of Colchester v.
Lowten (6); and this common law right of disposition continued
in England until it was taken away, as to religious corporations,
b]^ several restraining statutes, in the reign of Elizabeth. We
have not re-enacted in New York those disabling acts; but the
better opinion, upon the construction of the statute for the incor-
poration of religious societies (c), is, that no religious corporation
can sell in fee any real estate without the chancellor's order. The
powers given to the trustees of religious societies incorporated
under that act, are limited to purchase and hold real estate, and
then to demise, lease, and improve the same for the use of the
congregation. This limitation of the corporate power to
sell, is confined to religious corporations; *and all others [ * 282 ]
can buy and sell at pleasure, except so far as they may
be specially restricted by their charters or by statute (d). Cor-
porations have a fee simple for the purpose of alienation, but
they have only a determinable fee for the purposes of enjoyment
On the dissolution of the corporation, the reverter is to the origi-
nal grantor or his heirs; but the grantor will be excluded by the
alienation in fee, and in that way the corporation may defeat the
possibility of a reverter («)."

H Cb. lAtL 44, a. 300, b, 1 Sid. 161, oot« at the end of the case. 10 0«.
30, b. 1 Kyd. on Corp. 76, 78, 108, 115. Own. Dig. tit. Franchise, 11, 15, 1%
17, 18. Parker, Ch. J., in First Parish in Satton v. Cole, 3 Pick. Rep. 239.

(b) 1 Ves. <f Bea, 226, 237. 240, 244.

(c) Lawt of New York, sess. 36, ch. 60, sec. 11. This act has not heen
either revised or repealed. See N. Y. Revised Statutes, vol. iii. p. 298.

(d) CorporatioDS holding for charitable parposes, says I^rd Eldon, 1 Ves.
^ Bea. 246, can alienate at law, but the alienee will be a trnstee.

ie) Prestonon Estates, vol. ii. p. 50.

^ They cannot hold land in joint tenancy either with another corporation
or private peraon. Telfair ». Howe, 3 Rich. Eq. 235. At common law they
have a right to bold property as far as necessary to carry oat their objects.
Klaochard Guo Stock Turning Factory v. Warner, I Blatchf. C. Ct. 2ofl.
They have also a right, udIcss restricted by charter or statute, to take a title
ID fee to real estate, and where no restriction is imposed by the state by
statutes of mortmain, it is unlimited except where their taking and holding
is for purposes foreign to their objects. Lynch c. Hartwell, 8 Johns. 422j Oc-

24 VOL. II. KENT. 369


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la Eagland, corporations are rendered incapable of porchasiDg
lands without the king^s license; and ibis restriction extends
equally to ecclesiastical and lay corporations, and is founded upon
a sQccession of statutes from magna charta, 9 Hen. HL to 9 Gea
IL, which took away entirely the capacity which was Tested in
corporations by the common law. These statutes are known by
the name of the statutes of mortmain ; and they were introduced
during the establishment and grandeur of the Boman church, to
check the ecclesiastics from absorbing in perpetuity, in hands
that never die, all the lands of the kingdom, and thereby with-
drawing them from public and feudal charges (a). The ear{ier
statutes of mortmain were originally leyelled at the religions
houses; but the statute of 15 B. II. c. 5, declared, that civil <v lay
corporations were equally within the mischief, and within the
prohibition; and this statute made lands conveyed to any third
person, for the use of a corporation, liable to forfeiture, in like

(a) Lord Ch. Broagham observed, that the object of the mortmain acts,
nvas to prevent land from being placed extra commercium upon the feudal
principle of protecting the lords against having tenants who never died, bat
that there was no intention of preventing by will the investment of monies
in improvements upon land already in mortmain. Giblett v. Hobson, 3
Jtfy/nc <fe Keen, 517.

com Co. V. Bpragne, 34 Conn. 529; Sutton ». Cole, 3 Pick. 232; P&ige v.
Heineberg, 40 Vt. 81, and see Callaway, &c., Co. r. Clark, 32 Mo. 3a5; and al-
though strictly speaking they can only bold fbr purposes authorized by their
charter, yet such powers as are strictly incidental and necessary to their ob-
jects will be implied, they must however be things of necessity and not con-
venience. Bennington Iron Co. v. Ruthford, 3 Harr. 467; Abbott p. Steam
Packet, 1 Md. Ch. 542; State v. Commissioners of Mansfield, 3 Zabr. 510.
See Overmyer v. Williams, 15 Ohio, 26; and a conveyance will be deemed to
have been made to them for objects within their powers, unless such objet'ta
are illegal. Farmers* Loan & Trust Company v. Curtis, 7 N. Y. (3 Seld.)
466; Chautauqua Co. Bank v. Risley, 19 N. Y. 369. A corporation although
its duration is limited may hold lands in fee. Nicoll v. New York & Erie R
R. Co., 12 N. Y. (2 Kern) 121; Rives v. Dudley, 3 Joues* Eq. 126. Where a
corporation take a grant in fee and afterwards convey in fee, the grantee*s
title is not impaired by their subsequent dissolution by statute limiting their
powers. People v. Manran, 5 Den. 389. It has been held in Maine that they
(banks) may take real estate as security for a loau or in payment of debts.
Thomaston Bank v. Stimpson, 21 Maine, 195. As to the power of a Ctf»rpor-
ation created under the laws of one state to acquire lands in another. Stat« c.
Boston, &c., R., 25 Vt. 43,3; Metropolitan Bank r. Godfrey, 23 111. 579. A
power to purchase includes one to take a mortgage. Commercial Bunk of
Manchester v. Nolan, 7 How. 508; Deloach v. Real Estate Bank, 18 Lax. 447.
For the distinction between the power to purchase and to hold. Leasnre r.
Hillegas, 7 Sergt. & R. 313; Rumyan v. Coster, 14 Pet. 122. Where a cor-
poration is prohibited from purchasing or dealing in lands it is not as a
matter of course forbidden to take a mortgage to secure a debt. Blant v.
Walker, U Wis. 334.



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manner as if oonye)(^ directly in mortmam (a). We have not
in this coantry re- enacted the statates of mortmain, or generally
assumed them to be in force; and the only legal cheek to the ac-
qnisition of lands by corporations, oousists in those special restric-
tions contained in the acts by which they are incorporated, and
which usually confine the capacity to purchase real estate to speci-
fied and necessary objects ; and to the force to be given to the
exception of corporations out of the statute of ^wills (6), [ ^283 ]
which declares, that all persons, other than bodies politic
and corporate, may be devisees of real estate (c).

The statutes of mortmain are in force in the State of Pennsyl-
vania. It has been there held and declared, by the judges of the
supreme court of that state (d), that the Ekiglish statutes of mort-
main have been received, and considered the law of that state,
so far as they were applicable to their political condition; and
that they were so far applicable, ^' that all conveyances by deed
or will, of lands, tenements, or hereditaments, made to a body cor-
porate, or for the use of a body corporate, were void, unless sanc-
tioned by charter, or act of assembly" (e). In the other states,
it is understood, that the statutes of mortmain have not been re-
enacted, or practised upon; and the inference from the statutes

(o) Co. LUi. 2, b. 2 Blacks. Com. 268—274, and 1 Blacks. Com. 497. The
mortmain acts apply to corporations exclusively ^ and trusts made lor charitable
uses and purposes, not deemed supeniUioua, have not been held to be invalid.

Online LibraryWilliam M. Lacy James KentCommentaries on American law, Volume 2 → online text (page 46 of 108)