HARVARD LAW REVIEW

Published monthly, during the Academic Year, by Harvard Law Students

INCORPORATION BY IMPLICATION UNDER THE SHERMAN ACT. The much interpreted Sherman Act1 has lately appeared in the guise of an incorporating statute, for such is the effect of a recent decision of the Circuit Court of Appeals for the Eighth Circuit holding an unincorporated labor union a suable entity under it. The statute after prohibiting the commission of certain enumerated acts by any "person" or "persons declares: "That the word 'person' or 'persons' wherever used in the Act shall be deemed to include corporations and associations existing

1 An Act to Protect Trade and Commerce Against Unlawful Restraints, 26 STAT. AT L. 209, 7 FED. STAT. ANNOT. 336.

Dowd v. United Mine Workers of America, 235 Fed. 1. Cf. U. S. v. Coal Dealers' Ass'n., 85 Fed. 252, 260, where appear intimations to the contrary. In U. S. v. Joint Traffic Ass'n., 171 U. S. 505, U. S. v. Trans-Missouri Freight Ass'n. 166 U. S. 290, and Eastern States Retail Lumber Dealers' Ass'n. v. U. S., 234 U. S. 600, the point was not raised.

The principal case was begun before the passage of the Amendment of Oct. 15, 1914 (Clayton Act), 38 STAT. AT L. 730, 1916 SUPPL. FED. STAT. ANNOT. 267, and this latter statute was apparently not considered to have any bearing on the case. But if, as has been generally supposed, the Clayton Act exempts labor unions from the Anti-Trust Laws, quare whether it might not bar the action in the principal case. On the effect of repeal of a penal statute upon pending prosecutions, see WHARTON, CRIMINAL LAw, 11 ed., 513. The exact effect of the Clayton Act on labor unions, however, is a matter much in doubt. The important sections are 1, 6, 20, and 22. See "Labor is not a Commodity," THE NEW REPUBLIC for Dec. 2, 1916, p. 112, and a reply in the issue for Dec. 9, 1916, p. 152.

under or authorized by the laws of either the United States, the laws of any of the Territories, the laws of any state, or the laws of any foreign country." The precise meaning of this clause is somewhat conjectural. Does it extend to so-called voluntary associations, which obviously are associations existing under or authorized by the laws of any state, etc., or was the legislative intent to confine it to those organizations which have been actually incorporated under a statute? The fact that organizations which are in reality corporations have been designated "associations" by certain sovereigns lends color to the latter suggestion. The principal case, however, takes the broader view, which is certainly not capricious in the light of the language used.5

Assuming, then, that a voluntary association is included in the statute's prohibition, it follows by necessary implication that a remedy was intended against it as an entity, and not merely an action against the individual members; for they are suable without special words, and the inclusion of voluntary associations in the statute would on such a construction be rendered meaningless. The conclusion seems inevitable that for the purposes of the Sherman Act a labor union or any other species of voluntary association may be treated as a legal unit apart from its members sued as such, judgment rendered against it, and its property now or hereafter owned taken on execution.

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The law recognizes but two kinds of units, viz., human beings and corporations. Hence a corporation may comprehensively be defined as a legal unit not a human being. If this definition be correct, then it follows from the foregoing analysis that the Sherman Act has incorporated all voluntary associations for the purposes of prosecutions thereunder manifestly a decided change in the status of voluntary associations, for the proposition that a voluntary association, having no legal existence apart from its members, cannot be sued is firmly imbedded in the common law."

A corporation possessing these volatile, fly-by-night attributes might seem an alarming creature, and yet it stands apparently unassailable. The conception of a corporation for a single purpose is of very ancient origin. Nor is the indirectness and informality of the incorporating

8

For a criticism of this terminology, see WRIGHTINGTON, UNINCORPORATED AssoCIATIONS, I.

See Andrews Bros. Co. v. Youngstown Coke Co., 58 U. S. Ap. 444.

For a similar interpretation of similar words, see opinion of Bradley, J., in Liverpool Ins. Co. v. Mass., 10 Wall. (U. S.) 566, 576.

It is to be noticed that the legal title to property normally referred to as property of the association is not vested in the association as an entity but in all the members as co-owners, or more commonly in a few trustees in trust for members for associate purposes. See WRIGHTINGTON, UNINCORPORATED ASSOCIATIONS, 239; also 25 HARV. L. REV. 582. The effect of the Sherman Act is, it is submitted, to vest the title to the associate property in the new entity, which it has created, for the purposes of executions pursuant to proceedings under the Sherman Act. (For if the judgment runs against the association as an entity, there would be no warrant for taking property belonging to the members.)

St. Paul Typothetæ v. St. Paul Bookbinders' Union, 94 Minn. 351, 102 N. W. 725. Other cases collected in 2 L. R. A. (N. S.) 789 and 1 B. R. C. 852.

See KYD, CORPORATIONS, 29, where reference is made to the church wardens, who were clothed with corporate capacity for receiving and holding chattels (but not realty or choses in action) to the use of the parishioners.

process here unsupported by precedent. Nor can it now be doubted that the Federal Constitution enables Congress to create corporations where reasonably necessary to the proper exercise of its other powers.10 The requisite consent on the part of the members to incorporation is furnished by their continuance in the association."1

Voluntary associations are to-day an enormous factor in commercial enterprise, while in general the law is still clinging to clumsy, antiquated methods of laying hold of them. Equity, it is true, has appreciated the difficulty of corralling all the members of a large association even with the aid of statutes permitting substituted and constructive service of process, and has accordingly invented the device of a so-called representative suit,12 in which a few members only are made parties and a decree rendered binding all; but this practice has never been taken over by the law courts. The result achieved in the principal case seems to the writer not only unobjectionable in point of principle, but a particularly timely contribution to the law.

- That the state may,

CIVIL CONSCRIPTION IN THE UNITED STATES. in case of necessity, compel its citizens to do military service, is consonant with our ideas both of common and of constitutional law. That the satisfaction of any civil need of the state may likewise be compelled, however, is a conception new to us, and one that will be regarded by most lawyers with instinctive hostility. But this compulsion, which, in lieu of a better term, may be called civil conscription, is, it is submitted, settled in practice and sound in principle. The service, both military and civil,' which the feudal system exacted, had a larger warrant than any theory of land tenure could give,2 in the inherent right of the state to safety and to preservation.3 The real basis of the conscription is the

• Buckland v. Fowcher, 2 H. 7, 13 a, b, where R.'s mere license from the king to grant rent in succession to a chaplain was held to confer a corporate capacity on the chaplain and his successors. This case is cited and discussed in 10 Co. 27 a and KYD, CORPORATIONS, 52, 62. See also Taff Vale Ry. Co. v. Amalgamated Society of Railway Servants, [1901] A. C. 426; discussed in 15 HARV. L. REV. 310.

10 See MORAWETZ, CORPORATIONS, II.

1 Assent to incorporation need not be express but may be inferred from acts. See MORAWETZ, CORPORATIONS, 23.

12 For a more detailed analysis, see STORY, EQUITY PLEADING, § 94 et seq.; cases collected in 1 B. R. C. 854.

1 For the heavy civil duties attached to villein tenure, see POLLOCK AND MAITLAND, HISTORY OF ENGLISH LAW, 2 ed., 370, 372.

2 Military service was exacted even of those who held no land. MAITLAND, CONSTITUTIONAL HISTORY OF ENGLAND, 162.

* This right has been consistently recognized both in England and in the United States. See Rex v. Larwood, I Salk. 167, 168: "The King hath an interest in every subject, and a right to his services." Cf. Lanahan v. Birge, 30 Conn. 438, 443: "It is a fundamental principle of national law, essential to national life, that every citizen. is under obligation to serve and defend the constituted authorities of the state and nation . . . when such service is lawfully required."

In 1642 Parliament and King Charles disputed concerning the King's right to conscript without Parliament's consent. See A DECLARATION OF THE LORDS AND COMMONS ASSEMBLED IN PARLIAMENT UPON THE STATUTE OF 5 H. 4, WHEREBY THE COMMISSION OF ARRAY IS SUPPOSED TO BE WARRANTED: TOGETHER WITH DIVERS OTHER STATUTES AS ALSO HIS MAJESTIES LETTER TO THE SHERIF OF LEICESTERSHIRE

necessity of the state, and accordingly the considerations of liberty of the individual, and of equality of treatment, must be wholly subordinated to that. Thus, even a capricious and sometimes deliberately unequal conscription has been lawfully practiced in England for centuries, in impressment for the navy. That the state may need civil service equally as much as military is obvious. Both kinds of service are essentially alike, for both sacrifice the individual to the nation's welfare with the same clear purpose. And not only are military conscription and civil conscription identical in nature, but also the difference in form between them may be imperceptible. The common law is, then, that any service whatever, whether military or civil, which the state requires, it may exact of its citizens."

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It is, however, true that comparatively few instances of civil conscription are recorded in the books. The classic example is the holding of public office. The resignation of any public officer is effective only at the will of the sovereign. And one duly elected to office may be compelled to accept the place and to perform its duties. A recent California case 10 suggests the possibility of a still further infringement on the liberty of the individual, raising the problem, whether the state may compel a man to run for office after he has been nominated," and the even more importTO EXECUTE THE SAID COMMISSION ACCORDING TO HIS MAJESTIES PROCLAMATION. This contains a full inquiry into the early military conscriptions. Said King Charles (p. 20): "And considering that in ancient time the Militia of the Kingdom was ever disposed of by Commissions of Array . . . Wee have thought fit to referr it to that ancient legall way... authorizing you to Array and traine our People, and to apportion and assesse such persons as have estates and are not able to beare Armes, to find Armes for other men and to conduct them so Arraid. . . ." To which Parliament replied (p. 9) that the Petition of Right forbade the King to impose any "tax or charge" upon the people without Parliament's consent.

2 MAY, CONSTITUTIONAL HISTORY OF ENGLAND, 137-40. Cf. with the necessity for compensation, note 24, infra. For the formation of contracts of labor by persons without means of support, which English statutes compelled as late as 1875, see FREUND, THE POLICE POWER, § 448.

Is the "home service" conscription now being instituted by Germany, military or civil in form? And how are we to class the conscription provided for by the British "man-power" bill, at the present moment under debate by Parliament? Cf. the operation of the railways of France by the railway employees in their capacity of conscripts, which was threatened by the French government in 1910, to avert a strike. JOURNAL OFFICIEL DE LA RÉPUBLIQUE FRANÇAISE, 8395 (12 Octobre, 1910); ROUCHY, LES GRÈVES DANS LES CHEMINS DE FER, 61; see 96 OUTLOOK 474 (October 29, 1910). • See the great opinion of Shope, J., in People ex rel. German Ins. Co. v. Williams, 145 Ill. 573, 582, 583, 33 N. E. 849, 852, approved in 7 HARV. L. REV. 186. Cf. 1 BLACKSTONE, COMMENTARIES (Sharswood), * 138, to the effect that the sovereign may require of the subject anything that does not necessitate the subject's exile from the realm. 7 See FREUND, THE POLICE POWER, § 613.

Edwards v. United States, 103 U. S. 471. This common law principle prevails in the United States despite the fact that here "public offices are sought rather than shunned." A recent English dictum stands alone in questioning the application of this principle to statutory offices. See Bray, J., in Rex v. Sunderland Corporation, [1911] 2 K. B. 458, 464.

People ex rel. German Ins. Co. v. Williams, supra. Not only will mandamus lie against the person elected, to compel the performance of the duties of the office, but also his failure to accept the office constitutes an indictable offense.

77.

10 Bordwell v. Williams, 52 Cal. Dec. 267, 159 Pac. 869, discussed in 5 CAL. L. REV.

The candidate cannot withdraw after nomination, under most primary statutes. Cf. State ex rel. Donnelley v. Hamilton, 33 Nev. 418, 111 Pac. 1026, with Elswick a

ant question, whether it may compel him to seek the nomination in the party primaries which statutes have now generally established.12 It is submitted that in both of these cases such compulsion may be lawful, since there well may be a public interest sufficient to warrant it.13 The Conscript Fathers may be conscript in fact. Another continuing public duty whose compulsory performance has been urged 14 is the exercise of the suffrage. The only attempt that has yet been made in any common law jurisdiction to establish compulsory voting has been held unconstitutional as a compulsion of an act of sovereignty.15 Compulsory jury service has existed almost as long as juries have.16 So, too, witnesses have been compelled to appear; 17 and labor upon public roads has been conscripted,18 from the beginnings of the common law until the present Ratliff, 166 Ky. 149, 179 S. W. 11. It is submitted that such statutory prohibitions are merely expressive of the state's need, and not enlargements of the common law.

It should be noticed that withdrawal, like resignation from office, may be considered to involve another element than state conscription, in the individual's prior consent to hold the office or to have his name upon the ballot. That, however, is not the real ground of these decisions.

12 There are apparently no cases as yet which squarely decide this point. For the candidate's power to withdraw after his name has gone on the primary ballot, under statutes with similar and rather technical provisions, see Bordwell v. Williams, supra, and State ex rel. Thatcher v. Brodigan, 37 Nev. 458, 142 Pac. 520.

13 The public interest which may warrant the conscription of candidates is the identical interest which has established the direct primary. The primary statutes make the nominee even in form a public officer, and the nomination a public office. Johnston v. Board of Elections of Wake County, 90 S. E. 143 (N. C.). See also 26 HARV. L. REV. 351. It would seem that candidacy, even before it has ripened into nomination, also might be a public office.

14 Former Attorney-General Wickersham, in his address before the Chester County Historical Society, September 28, 1912, on "The Individual and the Community." See also Mr. Wickersham's letter in THE SUN, New York, October 6, 1912. It would appear that compulsory voting is quite generally established in civil law countries. is Kansas City v. Whipple, 136 Mo. 475, 38 S. W. 295. In this unique case a provision in the charter of Kansas City which made failure to vote a penal offense, in effect, was held unconstitutional as an attempt to force the sovereign's act, since the electorate in voting act in the capacity of the sovereign. The court admitted that there was a duty to vote, but denied that performance of the duty could be compelled. Said Brace, C. J.: "It is not service at all, but an act of sovereignty."

It is submitted that the choosing, and not the expressing of the choice (which was all the charter compelled) is the act of sovereignty; but conceding that voting is an act of sovereignty, the error in the court's reasoning is its failure to perceive that it is the sovereign who is forcing the performance of this sovereign act by the electorate. It is (to carry out the court's fictitious conception) as though the sovereign compelled his arm to write, or his judges to make the round of assizes.

For a sharp and undeserved criticism of this case, see 10 HARV. L. REV. 439.

16 See Kansas City v. Whipple, supra. It is difficult to see that jury service is less a sovereign act than voting is.

17 Israel v. State, 8 Ind. 467. Of all these cases of conscription it should be observed that they are not isolated compulsions, but merely examples of the state's exercise of its general conscriptive power. So, here, the compulsion is said to be warranted by "the general interest and public concern."

The Sixth Amendment to the Constitution of the United States provides that in certain cases the defendant shall be entitled to compulsory process to secure the appearance of witnesses in his favor.

18 See Dennis v. Simon, 51 Ohio St. 233, 36 N. E. 832; In re Dassler, 35 Kan. 678, 12 Pac. 130. Here also statutes authorizing the compulsion are not enlargements of the common law, but merely declarations of the state's need. See Butler v. Perry, 240 U. S. 328.

For the constitutionality of these road-building statutes, see infra.