132 
Strong—The Legal Status of Trusts. 
co-partners the powers which by the law of partnership each 
partner possesses over the rights of his co-partners, and the 
partnership property; nor can it lawfully assume the liabilities 
imposed by law upon the members of a co-partnership. The very 
object of forming a corporation for commercial or manufactur¬ 
ing purposes is to escape the liability of a partnership, and the 
liability is escaped by restricting the powers of the members. 
Thus in a partnership, each partner is the general agent of the 
firm — a purchase or sale by one partner binds the others. It 
may be said in general that any one partner may do any act in 
the partnership business that could be done by all the partners 
together. On the other hand, it is a fundamental principle of 
the law of corporations that the affairs of the corporation and 
the business that it carries on shall be managed by its directors, 
and by them alone. As agents they cannot delegate their 
powers to others, and as trustees in whom personal confidence 
is reposed, they cannot abdicate their functions so long as they 
retain the trust. Since, therefore, the rules of law governing 
partnerships are so different from those governing corporations 
that a partnership composed of corporations cannot exist with¬ 
out violating some of those rules, it follows that such a partner¬ 
ship is illegal, and therefore void. This has been adjudged in a 
multitude of cases, and now may be considered settled law in 
the United States. 8 
II. In order to escape the legal difficulties of the trust part¬ 
nership, a new form of combination was devised in what are 
known as Stock-holding Corporations. These acquire control of 
other corporations by purchasing a controlling interest in their 
stock. The Richmond Terminal Company, which formerly con¬ 
trolled in this way a railway mileage of 7,842 miles, included in 
several large systems, is a familiar illustration among railroads. 
Another is the Chicago Gas Trust Company, incorporated under 
the general incorporation law of Illinois (Rev. Ill. C. 32, 1, 5). 
This company, in addition to the power to build, maintain and 
8 People v. North River Sugar Refining Co., 1890, 121 N. Y. 582; Mal¬ 
lory v. Hanaur Oil Works, 1888, 86 Tenn. 598; American Preservers’ 
Trust Co. v. Taylor Manufacturing Co., 1891, U. S. Circuit Court E. D. 
Mo., 46 Federal Reporter 152. 
