Corporations as people

[Cat_In_A_Top_Hat]

Are corporations considered people? Do they have first amendment rights, or any right at all? If they are, if they have rights, aren’t they also liable under the responsibilities people have, as well? How does that work? Is that legally different than what’s happening now?

Confused, I am.

Thanks!
–CiaTH

[Polycarp]

1. They are “persons” as a legal fiction – in that a person, not a car or toaster or dentist’s office (as opposed to the dentist practicing in it), is what has legal existence to act by contract, in court, etc.

2. They have no “rights” other than to exist by virtue of being corporations – but they have a set of specific rights given them in their charters. These rights include to incur debt, enter into contracts, sue and be sued, and several others. In addition, specific rights to engage in certain forms of business are extended to each corporation, variable according to what it is chartered as. General Motors, for example, has no right to set itself up as a bank, though it could cause a daughter corporation to be created that has the right to engage in banking.

3. (And contrary to what I said in #2, for reasons that will become obvious) As persons, they have certain rights congruent with what they are, for example freedom of speech. the right to a fair, speedy trial, etc. Not all the panoply of constitutional rights apply to them, but rather the ones that match up with their status as legal persons distinct from their shareholders or executives.

4. As was discussed in another recent thread, the reason is that only persons can engage in legal transactions (from selling a pack of gum to being involved in a multi-billion dollar lawsuit), and the full title, “limited liability corporations,” makes clear the value of setting up a separate legal identity – your liability as a shareholder of a corporation is limited to your investment. The guy suing GM for several million dollars because his car went kablooey at turnpike speed, causing him permanent disability, cannot come after you for that several million – your liability is limited to the money you already invested in the corporation.

[adhay]

@Cat_In_A_Top_Hat

Are corporations considered people? Do they have first amendment rights, or any right at all? If they are, if they have rights, aren’t they also liable under the responsibilities people have, as well? How does that work? Is that legally different than what’s happening now?

Confused, I am.

Thanks!
–CiaTH

Once again. I posted this in another thread (with minor changes).

Corporate “personhood” is entirely a creation of SCOTUS’s interpretation of what? Not the Constitution nor its 27 amendments in which the word “corporation” does not appear once .

Before the Civil War, southern agricultural capital gave counterweight to northern industrial and the South had a fair hand in composing the SC. The question of corporate personhood began to arise post-bellum after the USG was firmly in the hands of northern banks and industrial interests and in 1889 http://caselaw.lp.findlaw.com/scripts/getcase.pl?court=US&vol=129&invol=26 the SC finally ruled that corporations are people.

Irony? The corporation “lost” the suit but for the price of 3 hogs, ($24, a familiar bargain price) corporations were awarded personhood.

This is the most egregious piece of judicial legislation EVER but it is the foundation of all arguments today about corporate rights. Once it is granted that a corporation is a person, it’s a short step (in our case 110 years) to the point this person has been fully anthropromorphized into a human being, just another joe except without joe’s frailities like dieing , not having former Congressmen sitting on his board of directors and not having shitloads of money. Too bad, joe.

Oh yeah. joe’s also expected to pick up after himself and be responsible for his debts.

[Polycarp]

Adhay, limited liability corporations existed in England well before the Revolution (ever hear of the South Seas Bubble?). In fact, the idea that a parish church was a ‘person’ at law separate from its pastor and churchwardens dates back to the Middle Ages.

And equating “law” with statute flies in the face of how law has been created in the English-speaking world since, quite literally, “time immemorial.” The courts – all the courts, from the Farmburg Police Court on up to SCOTUS – create case law with every case they consider. SCOTUS did not “create” personhood for corporations, but recognized it; it was a legal fiction, a concept implicit in contract law, long before that decision.

[Markxxx]

Here’s a good podcast on “Corporate Personhood,” from howstuffworks.com

[adhay]

@Polycarp

Adhay, limited liability corporations existed in England well before the Revolution (ever hear of the South Seas Bubble?). In fact, the idea that a parish church was a ‘person’ at law separate from its pastor and churchwardens dates back to the Middle Ages.

And equating “law” with statute flies in the face of how law has been created in the English-speaking world since, quite literally, “time immemorial.” The courts – all the courts, from the Farmburg Police Court on up to SCOTUS – create case law with every case they consider. SCOTUS did not “create” personhood for corporations, but recognized it; it was a legal fiction, a concept implicit in contract law, long before that decision.

It is quite true that corporations as legal fictions were recognized in each of the original thirteen states. But they were also closely regulated.

The United States of America was born of a revolt not just against British monarchs and the British parliament but against British corporations.
We tend to think of corporations as fairly recent phenomena, the legacy of the Rockefellers and Carnegies. In fact, the corporate presence in prerevolutionary America was almost as conspicuous as it is today. There were far fewer corporations then, but they were enormously powerful: the Massachusetts Bay Company, the Hudson’s Bay Company, the British East India Company. Colonials feared these chartered entities. They recognized the way British kings and their cronies used them as robotic arms to control the affairs of the colonies, to pinch staples from remote breadbaskets and bring them home to the motherland.

The Declaration of Independence, in 1776, freed Americans not only from Britain but also from the tyranny of British corporations, and for a hundred years after the document’s signing, Americans remained deeply suspicious of corporate power. They were careful about the way they granted corporate charters, and about the powers granted therein.
Early American charters were created literally by the people, for the people as a legal convenience. Corporations were “artificial, invisible, intangible,” mere financial tools. They were chartered by individual states, not the federal government, which meant they could be kept under close local scrutiny. They were automatically dissolved if they engaged in activities that violated their charter. Limits were placed on how big and powerful companies could become. Even railroad magnate J. P. Morgan, the consummate capitalist, understood that corporations must never become so big that they “inhibit freedom to the point where efficiency [is] endangered.”
The two hundred or so corporations operating in the US by the year 1800 were each kept on fairly short leashes. They weren’t allowed to participate in the political process. They couldn’t buy stock in other corporations. And if one of them acted improperly, the consequences were severe. In 1832, President Andrew Jackson vetoed a motion to extend the charter of the corrupt and tyrannical Second Bank of the United States, and was widely applauded for doing so. That same year the state of Pennsylvania revoked the charters of ten banks for operating contrary to the public interest. Even the enormous industry trusts, formed to protect member corporations from external competitors and provide barriers to entry, eventually proved no match for the state. By the mid-1800s, antitrust legislation was widely in place.

[Captain_Amazing]

@adhay

This is the most egregious piece of judicial legislation EVER but it is the foundation of all arguments today about corporate rights.

It’s not. Check out Society for the Propagation of the Gospel v Pawlet (1823) and Providence Bank v Billings (1830), both of which predate the decision, and say that corporations have the came rights as people.

Or, in English law, as Blackstone put it:

[a]s all personal rights die with the person, and, as the necessary forms of investing a series of individuals, one after another, with the same identical rights, would be very inconvenient, if not impracticable, it has been found necessary, when it is for the advantage of the public to have any particular rights kept on foot and continued, to constitute artificial persons, who may maintain a perpetual succession, and enjoy a kind of legal immortality.

[adhay]

Blackstone, that 18th century English jurist? Cite away. His notions didn’t seem to affect our early laws limiting corporations, if you’re going to give any credence to my previous post.

[Captain_Amazing]

I don’t give much credence to your previous post, or at least I don’t think the evidence you’ve quoted backs what you claim it does. (I also dispute its characterization of the Second Bank of the US as tyrannical, but that’s neither here nor there) Early American law based itself on British common law, and whatever limitations their corporate charters gave to them, it didn’t get rid of the idea of corporate personhood.

As Chief Justice Marshall put it in Providence Bank

The great object of an incorporation is to bestow the character and properties of individuality on a collected and changing body of men. Any privileges which may exempt it from the burdens common to individuals do not flow necessarily from the charter, but must be expressed in it or they do not exist.

Or in Dartmouth College (bolding mine)

A corporation is an artificial being, invisible, intangible, and existing only in contemplation of law. Being the mere creature of law, it possesses only those properties which the charter of its creation confers upon it either expressly or as incidental to its very existence. These are such as are supposed best calculated to effect the object for which it was created. Among the most important are immortality, and, if the expression may be allowed, individuality – properties by which a perpetual succession of many persons are considered as 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 intricacies, 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.

Also, if you look at Bank of the US v Deveaux (1809), you’ll see Marshall stating:

As our ideas of a corporation, its privileges, and its disabilities, are derived entirely from the English books, we resort to them for aid in ascertaining its character. It is defined as a mere creature of the law, invisible, intangible, and incorporeal. Yet when we examine the subject further we find that corporations have been included within terms of description appropriated to real persons . . .

It is true that as far as these cases go, they serve to show that the corporation itself, in its incorporeal character, may be considered as an inhabitant or an occupier, and the argument from them would be more strong in favor of considering the corporation itself as endowed for this special purpose with the character of a citizen, then to consider the character of the individuals who compose it as a subject which the court can inspect, when they use the name of the corporation for the purpose of asserting their corporate rights. Still the cases show that this technical definition of a corporation does not uniformly circumscribe its capacities, but that courts for legitimate purposes will contemplate it more substantially.

There is a case, however, reported in 12 Mod., which is thought precisely in point. The Corporation of London brought a suit against Wood by its corporate name in the mayor’s court. The suit was brought by the mayor and commonalty, and was tried before the mayor and aldermen. The judgment rendered in this cause was brought before the Court of King’s bench and reversed because the court was deprived of its jurisdiction by the character of the individuals who were members of the corporation.

In that case, the objection, that a corporation was an invisible, intangible thing, a mere incorporeal legal entity in which the characters of the individuals who composed it were completely merged, was urged and was considered. The judges unanimously declared that they could look beyond the corporate name and notice the character of the individual.

[adhay]

My point has been that corporate personhood is a SCOTUS creation dating from after the Civil War.

This froma timeline of corporate personhood.

Dartmouth College v. Woodward (1819)
A corporate charter is ruled to be a contract and can’t be altered by government. The word “corporation” does not appear in the Constitution and this ruling gave the corporation a standing in the Constitution. It also made it difficult for the government to control corporations, so states began to write controls into the charters they granted. The Supreme Court had “found” the corporation in the Constitution.

[emphasis mine]

Nothing about personhood with all the rights of citizens. As late as 1877, the SC was ruling to the contrary.

Munn v. Illinois (1877)
Supreme Court ruled that the 14th Amendment cannot be used to protect corporations from state law. They did not actually rule on personhood.

[Captain_Amazing]

Munn v. Illinois doesn’t touch on personhood because corporate personhood was recognized before that.

Look at the Dartmouth College decision again:

“individuality – properties by which a perpetual succession of many persons are considered as the same, and may act as a single individual.”

That’s a legal person…a thing that can act in its own right rather than merely being the instrument of something else. This isn’t a question of when the Supreme Court ruled that the 14th amendment applied to corporations, or when corporate persons had the rights of citizens. This is about when corporate personhood was established. And it was established long before 1889.

[adhay]

Oh, have your it your way.

[adhay]

Here’s a little historical piece that shouldn’t upset anyone. At the end, there is a cite of English Law regarding corporations.

In 1664, the owners of the Massachusetts Bay Company protested when Charles II tried to investigate their company’s operations. The Crown responded, “The King did not grant away his sovereignty over you when he made you a corporation… When his majesty gave you authority over such subjects as live within your jurisdiction, he made them not your subjects, nor you their supreme authority.”