chapter  3
51 Pages

Historic Excuses and Uses for Judicial Subjectivity in the Incorporation Process

ByNorman I. Silber

The judges discovered their authority within the language and the history of the legislative declaration that they should approve only organizations with "lawful" purposes. Their views about what was lawful, and therefore the circumstances in which incorporation of nonprofits would be permissible, depended to an extraordinary degree on their ethnic and social predispositions. Trial court justices began to exert greater substantive control over the formation of nonprofit corporations late in the nineteenth century. Around the outbreak of the war, doctrinal justifications for disapproving of nonprofits swelled as the courts became ever more self-assured about their actions, and wartime exigency excused a less tolerant judicial approach to civil liberties. There is no proof available that the public was better protected against unscrupulous nonprofit organizations by the discretionary conception of nonprofit corporate formation than it would be in later years.