“In the 1800’s (I assume before all this convoluted corporate law), how did businesses protect its individual members from personal liability or were they not protected?”
Back then, their liability was limited to what they had agreed to do for a given individual, based on Winterbottom v Wright (1842) 10 M&W 109. As Wiki puts it: “In 1842, the law’s only recognition of “negligence” was in respect of a breach of contract. As the plaintiff was not in a contract with the defendant the court ruled in favour of the defendant on the basis of the doctrine of privity of contract...
...”If the plaintiff can sue,” said Lord ABINGER, the Chief Baron, “every passenger or even any person passing along the road, who was injured by the upsetting of the coach, might bring a similar action. Unless we confine the operation of such contracts as this to the parties who enter into them, the most absurd and outrageous consequences, to which I can see no limit, would ensue.””
In the US, that changed with MacPherson v. Buick Motor Co. (1916). “The principle that the danger must be imminent does not change, but the things subject to the principle do change. They are whatever the needs of life in a developing civilization require them to be.” Judge Cardozo, writing for the New York Court of Appeals, overturned the idea that lawsuits should be limited to those with a contract, and extend instead to...everyone. And as had been foreseen years earlier, “...the most absurd and outrageous consequences, to which I can see no limit, [have] ensue[d]...”
God bless Lord Abinger. This is an example why there was sanity in the world in the 1800's.
Then came the 1900's, the ushering in of the end of the current age. The judicial and legal world hails the eloquence of Judge Cordozo. I have yet to see ONE DECISION or OPINION by Cordozo that I agree with.
We continue to pay dearly for the Progressive Era. It has brought a centuries old curse on our great land.