Companies Possessed Rights either of Actual or Virtual Sovereignty
CategoriesCase Studies
The author treats on his subject under two headings that of private international law (Part I) and that of English law (Part II.) This division lends itself admirably to a comparative study of the laws of the various countries upon the subject of the nationality and domicile of “juristic persons.”
“The Muscovy Company, which was chartered by Queen Mary in 1553 in consequence of Sir Hugh Willoughby’s expedition to the North-East. In 1597 Queen Elizabeth chartered the Eastland Company, to capture the trade of the declining Hanse in Scandinavia, Poland, and the German Baltic. The Levant Company followed in 1581, and the first charter of the East India Company was granted in 1599.”
“Minor companies also chartered about this period were the first Guinea Company (1588) and the Barbary Company (1585). Englands commercial rival hastened to follow her example. In 1602 the States General of Holland fused a number of small privileged associations into the Dutch East India Company, and later created by a similar process the Dutch West India Company, besides other smaller associations.”
“The prosperity and numbers of the joint stock companies grew proportionately. For the purposes of international commerce, there were created in England during the 17th century the Royal African Company, reorganized from the former regulated Guinea Company and chartered as a joint stock company in 1672; and the Hudson Bay Company chartered in 1670, which still survives and flourishes. Amongst similar companies chartered by other states the most prominent was the ill-fated group of privileged companies created by Colbert to develop French trade; and East India Company in 1664 to compete with the Dutch East India Company, and in the same year a Company of the American Continent; in 1668 a North Company to monopolize trade in the North Sea and the Baltic, a Levant Company, and an abortive Pyrenees Company; all of which, however, languished and died, or survived as mere agents of the French government.”
“The Levant Company was officially recognized by the Sultans; and upon the institution of East India Company and the Barbary Company, embassies were sent by Queen Elizabeth to the Great Mogul and to the Sultan of Morocco respectively, in order to obtain from the confirmation for the privileges of the companies. In the foreign operations of the early associations en commandite also it was a natural person who appeared as the subject of rights in the local law of foreign states.”
“But with the joint stock association it was otherwise. In this form of association itself that sues, contracts, owns property, and, when it operates abroad, appears as a subject of rights in territorial law. The company itself contracts legal relations with the citizens of the foreign state, and the state must therefore, if it is called upon interfere in those relations, concern itself with questions concerning the status of the company. Several causes however tended to postpone discussion of such questions until long after the joint stock associations had assumed a position of importance in international commerce.”
“At first, such companies were for the most part formed in order to trade in barbarous countries without any settled legal system. After the 16th century the constitution of a chartered company seems to have been unsuitable for trading with accessible and civilized countries, and those such as the Eastland Company, which were formed for the purposes of trade in this nature, languished and died. In the uncivilized countries in which the companies flourished, in the East Indies for instance, in Hudson’s Bay, and in the South Seas, there were no lawyers to concern themselves with the status of European merchants, or, at least, such lawyers as there were would not have been allowed to do so.”
“Again, uncivilized lands many of the companies possessed rights either of actual or virtual sovereignty. The East India Company acquired its first sovereign rights as early as 1623; the Hudson Bay Company ruled in northern Canada, and exercised there the power of peace and war; the Bermuda Company ruled the Bermudas; the “provincial charter” of the companies which colonized North America delegated to them many sovereign powers; and where the company was itself sovereign, no question could arise as to its status.”
“In the case of Foster v. Globe Venture Syndicate in which a question arose as to whether the Suss tribes were independent or subject to the Sultan of Morocco, the court obtained knowledge of the matter by inquiring from the Foreign Office. The course of procedure there followed was first adopted at least in a reported case in the Taylor v. Barclay in which a question was raised as to the status of the Republic of Guatemala. To prevent demurrer to a bill it was falsely alleged that Guatemala had been recognized by Great Britian as an independent state. The court communicated with the Foreign Office, and being informed that no such recognition had been given, took judicial notice of the falseness of the allegation. So also in Mighell v. Sultan of Johore a question being involved as to the status of the Sultan as an independent sovereign, the court communicated with the Secretary of State for the Colonies, and held that it would treat his certification as conclusive in the matter. But where the status of the foreign sovereign is a matter of public notoriety, the court will take judicial notice of it without special inquiry. The material circumstnace to be considered in this connection is whether or not the sovereign state or government in question has ever been recognized as independent by the British Government.”
Source: Foreign Companies and Other Corporations
“Holding that a now-private corporation could not assert sovereign immunity in a suit involving events that occurred when the entity was owned by a foreign sovereign”..
Source: Dole Food Co. v. Patrickson, 538 U.S. 468 (2003)
“The colony was divided into eleven boroughs; and two representatives, called burgesses, were chosen from each. These, constituting the house of burgesses, debated all matters which were thought expedient for the good of the colony; but their enactments, although sanctioned by the governor and council, were of no force until they were ratified by the company in England. In the month of August 1620, a Dutch man-of-war enterd James rivers and landed twenty negroes for sale. This was the commencement of negro slavery in the English colonies.”
“In August 1621, the London Company granted to their colony a written constitution, ratifying, in the main, the form of government established by Yeardley. It decreed that a governor and council should be appointed by the company and that a general assembly, consisting of the council, and two burgesses chose by the people from each plantation or borough, should be convened yearly. The governor had a negative voice upon the proceedings of the assembly, but no law was valid unless ratified by the company in England. With singular liberality, it was further ordained that no orders of the company in England should bind the colony unit ratified by the assembly. The trial by jury was established, and courts of justice were required to conform to English laws. This constitution, granting privileges of which were ever after claimed as rights, was the basis of civil freedom in Virginia.”
“The settlement of Virginia by the London Company had been an unprofitable enterprise, and as the shares in the unproductive stock were now of little value, and the holders very numerous, the meetings of the company, in England, became the scenes of political debate, in which the advocates of liberty were arrayed against the upholders of royal prerogative. The king disliked the freedom of debate here exhibited, and, jealous of the prevalence of liberal sentiments, at first sought to control the elections of officers, by overawing the assemblies.”
“Failing in this, he determined to recover, by a dissolution of the company, the influence of which he had deprived himself by a charter of his own concession. Commissioners in the interest of the king were therefore appointed to examine the concerns of the corporation. As was expected, they reported in favor of change; the judicial decision was soon after given; the London Company was dissolved; the king took into his own hands the government of the colony, and Virginia thus became a royal government.”
“During the existence of the London Company, the government of Virginia had gradually changed from a royal government, under the first charter, in which the king had all power, to a proprietary government under the second and third charters, in which all executive and legislative powers were in the hands of the company.”
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