State v. Debenture Guarantee & Loan Co.

Citations

• 51 La. Ann. 1874
• 26 So. 600
• 1899 La. LEXIS 645

Syllabus

<p>Syllabus.</p> <p>1. The right of individuals to organizo themselves into a corporation Is not an-original, but is a derivative right expressly conferred bj' legislative authority. Throughout the whole legislation upon the subject and behind jit lias constantly rested the principle that corporations should be created “for the promotion of some object of public utility,’' and for none other.</p> <p>2. It is not only the right, but it is also the duty of the State to Inquire into the manner in which its authority to individuals to organize themselves into corporations is being exercised and to take active steps to have a claim to Such authority declared unfounded, if in fact it was so.</p> <p>S. Though the organization be without authority of law, the suit of the State for such purpose is properly against the organization and not against the individuals composing it.</p> <p>4. Where the charter of an intending corporation authorizes it to commence business only when a specified number of shares of its stock shall have been subscribed, it is without right or authority to act as a corporation before that number has been reached in the subscription.</p> <p>D. Debentures of all kinds bear sufficient resemblance to stock or bonds to make dealing in them by way of purchase and sale fall under the designation of stock jobbing which is a character of business prohibited to corporations in Louisiana.</p>