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§ 182. “Incorporation of Banks.”

By virtue of this power the Federal Parliament could establish banks by special Acts, a process known as Private Bills Legislation, or it could pass a general law dealing with the banking business, and authorizing the incorporation and registration of banking companies, subject to compliance with certain formalities and conditions. Compliance with those formalities and conditions would result in the creation of a banking corporation, as effective in its constitution as a corporation formed by a special legislative fiat. When a corporate body is established by a special Act, that Act is called its charter or deed of settlement; when it is established under a law of general application, its memorandum of association, lodged with the proper officer upon its registration, is its charter. The law usually determines the general powers, rights, privileges, liabilities, and responsibilities of corporations: within certain limits, however, many of these legal incidents may be regulated by contract.

An Act of Incorporation is an Act creating an artificial or fictitious person, the peculiarity of which is that it has a legal existence separate and distinct from the individual units of which it is composed. Its members may change, but the corporate entity remains; it has perpetual succession and it never dies, unless its dissolution or winding-up is brought about by operation of law.

In the Merchants' Bank of Canada v. Smith (1884), 8 Ont. App. 15, 8 S.C.R. (Can.) 512, it was held that a receipt given by a warehouseman was a valid receipt within the Dominion Act, 35 Vic. c. 5, s. 46, and that that Act was intra vires the Dominion Parliament under sub-secs. 2 and 15 of sec. 91, relating to the regulation of trade and commerce and banking. In Tennant v. Union Bank of Canada (1894), App. Cas. 31, it was decided that warehouse receipts, taken in security by a bank in the course of the business of banking, are matters coming with the class of subjects described in those sub-sections, and that the provisions of the Dominion Bank Act, Rev. Stat. (Can.) c. 120, secs. 45, 53 and 54, respecting such receipts, are intra vires.




  ― 579 ―

What an Act of incorporation does, “is to create a legal and artificial person with capacity to carry on certain kinds of business, which are defined, within a defined area, but it may nevertheless be subject, in carrying on that business, to the law of the locality wherein it does so.” In Re Grand Junction R. Co., 44 Upper Canada Reps. 317, Cameron, J., said: “Creating a corporation can hardly be said to be making a law;” and the same learned judge said, in Clegg v. Grand Trunk R. Co., 10 Ontario Reps. 714: “I wish to be free to consider whether a corporation created by the Dominion Parliament must not, outside of its corporate powers and functions, be regarded as a single entity which is, as far as the exercise of civil rights are concerned, not expressly provided for by the Act of incorporation, subject to the laws respecting such rights within the Province in which it may carry on its authorized business or exercise its corporate powers; and whether in this respect a corporation can have any greater or higher rights than a natural person.” But Mr. Lefroy contends that, although the Dominion Parliament can give to a corporation it is creating any powers and functions it likes, outside “provincial objects” within the meaning of sub-sec. 11 of sec. 92 of the British North America Act, it can only regulate its exercise of civil rights in respect to the classes of subjects enumerated in section 91. (Lefroy, Leg. Pow. in Canada, p. 626.)

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