1 be con § 121. It is also pretty well established that charters and enabling statutes (except in so far as they purport to Corporate confer extraordinary franchises or exclusive privi- powers to leges) should be construed fairly and not strictly; strued reaas Chief Justice Bigelow of Massachusetts said in sonably. Brown v. Winnisimmet Co.: "We know of no rule or principle by which an act creating a corporation for certain specific objects, or to carry on a trade or business, is to be strictly construed as prohibitory of all other dealings or transactions not coming within the exact scope of those designated. Undoubtedly the main business of a corporation is to be confined to that class of operations which properly appertain to the general purposes for which its charter was granted. But it may also enter into contracts and engage in transactions which are incidental or auxiliary to its main business, or which may become necessary, expedient, or profitable in the care and management of the property which it is authorized to hold under the act by which it was created." 2 v. Scott, 33 La. Ann. 946. When a bank takes property for a debt, it can make the expenditure necessary to put it into a productive condition. Reynolds v. Simpson, 74 Ga. 454. A corporation created under the laws of a state of the Union, whose members are citizens of the United States, may locate a mining claim upon public lands of the United States. McKinley v. Wheeler, 130 U. S. 630; compare United States v. Trinidad Coal Co., 137 U. S. 160. sustain an action against the corpo- a trademark and may sue for its inration. But whatever under the fringement. Insurance Oil Tank Co. charter and general laws, reasonably construed, may fairly be regarded as incidental to the objects for which the corporation is created, is not to be taken as prohibited." Justice Gray giving the opinion of the United States Supreme Court in Green Bay and Minn. R. Co. v. Union S. B. Co., 107 U. S. 98. See also, Fort Worth C. Co. v. Bridge Co., 151 U. S. 294; People v. Utica Ins. Co., 15 Johns. 358; New York F. Ins. Co. v. Sturgess, 2 Cow. 164; Same v. Ely, 2 Cow. 678; Commonwealth v. Erie, etc., R. R. Co., 27 Pa. St. 339; Diligent Fire Co. v. Commonwealth, 75 Pa. St. 291; Bly v. Water Co., 197 Pa. St. 81; Steiner v. Steiner Land & Lumber Co., 120 Ala. 128. A railroad company may contract with a city regarding a permission to use the latter's streets. Indianola v. Gulf, W. T., and P. R'y, 56 Tex. 554. A corporation may have But a power expressly excepted from a grant cannot be claimed as incidental to a power expressly granted. Plummer v. Penobscot Lumbering Ass'n, 67 Me. 363. And general words in a charter are not to be construed to authorize a corporation to do what is indictable. State v. Krebs, 64 N. C. 604. 1 11 Allen, 326, 336. 2 See, also, Railway e. Hooper, 160 Certain § 122. On the other hand, courts have decided, as exceptions, it may be said, to the general rule that corporate powers and constitutions are to be fairly construed, that all exclusive privileges,' and all powers granted in derogation of public rights or of the rights and franchises of other corporations, and all provisions whereby the state restricts its own action,' are to be construed strictly against the corporation; nothing passing by implication. privileges to be construed narrowly. "Every public grant of property, or of privileges or franchises, if ambiguous, is to be construed against the grantee and in favor of the public; because an intention on the part of the government to grant to private persons, or to a particular corporation, property or rights in which the whole public is interested cannot be presumed, unless unequivocally expressed or necessarily to be implied in the terms of the grant; and because the grant is supposed to be made at the solicitation of the grantee and to be drawn up by him or by his agents, and therefore the words used are to be treated as those of the grantee. . . . This rule applies with peculiar force to articles of association, which are framed under general laws, and which are a substitute for a legislative charter, and assume and define the powers of the corporation by the mere act of the associates, U. S. 514; Toledo, etc., R. R. Co. v. Rodrigues, 46 Ill. 188; Railway Co. McCarthy, 99 U. S. 258; Clark v. Farrington, 11 Wis. 306, 324. In Michigan a bank chartered with power to locate its business in one county has no power to establish a branch agency in another. This is an act fatal in quo warranto. People v. Oakland County Bank, Dougl. (Mich.) 282. See Detroit Fire, etc., Ins. Co. v. Judge of Saginaw Circuit, 23 Mich. 492. In Chapman v. Colby, 47 Mich. 46, 50, Campbell, J., says, giving opinion of the Court, "It has uniformly been held in this state that corporations cannot remove from place to place, or establish branches for the transaction of their regular corporate business, unless authorized by law." 1 See Richmond, etc., R. R. Co. v. Louisa R. R. Co., 13 How. 71; Perrine v. Chesapeake and Delaware Canal Co., 9 How. 172; People v. Broadway R. R. Co., 126 U. S. 29. Exclusive privileges and monopolies are not to be presumed. Charles River Bridge Co. v. Warren Bridge Co., 11 Pet. 420; De Lancey v. Insurance Co., 52 N. H. 581; Gaines v. Coates, 51 Miss. 335; Indianapolis Cable R. R. Co. v. Citizens' R. R. Co., 127 Ind. 369; Turnpike Co. v. Montgomery County, 100 Tenn. 417. 2 See Fertilizing Co. v. Hyde Park, 97 U. S. 659; Turnpike Co. v. Illinois, 96 U. S. 63. 3 Pennsylvania R. R. Co.'s Appeal, 93 Pa. St. 150; Packer v. Sunbury and Erie R. R. Co., 19 Pa. St. 211. 4 See § 489. without any supervision of the legislature or of any public authority."1 2 money. 123. More definite statements may now be made respecting the particular powers of corporations. And first Power to of all as to their implied power to raise money. Un- raise questionably, in the absence of express restrictions, a corporation has impliedly the power to raise money in order to carry on its business, i. e., effect the purposes of its incorporation. But by what means may it raise money? Certainly not by any means that an individual might employ, as, for instance, by speculating in cotton or in stocks. Rather, the constitution of a corporation being in its general nature enabling rather than restrictive, the correct rule would seem to be that a corporation may raise money only by the means expressly or impliedly authorized by its constitution. § 124. It goes without saying that in order to raise money a corporation may issue its own stock to the amount 5 stock. allowed by its charter or articles of association; and, By issue of if authorized to do so, it can issue preferred stock. But it cannot validly issue its stock below par as full-paid stock. A corporation may also sell its property in order to raise money.? 1 Central Transp. Co. v. Pullman's Car Co., 139 U. S. 24, 49, Opin. of Court per Justice Gray. See Oregon Ry.. Oregonian Ry., 130 U. S. 26, 27; Rock bold v. Canton Society, 129 Ill. 440. 4 See Curtis v. Leavitt, 15 N. Y. 9, 268; Jemison v. Citizens' Svgs. Bk., 122 N. Y. 135. But it has been held that a corporation is not restricted to means 66 usual and necessary" in carrying E. g., in order to raise money, a on its business; but may choose railroad company may assign its among the means convenient and claim for unpaid subscriptions to its adapted to the end contemplated by stock. Morris v. Cheney, 51 Ill. 451. its charter. Madison, etc., Plank But only for purposes properly Road Co. v. Watertown, etc., Plank within the scope of the corporate Road Co., 5 Wis. 173; see Clark v. objects. See In re Durham County Farrington, 11 Wis. 306, 324. Building Society, Davis's and Wil- 5 See §§ 571, 572. son's Cases, L. R. 12 Eq. 516; In re National Permanent Benefit Building Society, ex parte Williamson, L. R. 5 Ch. 309. But the lender of money to a corporation is not obliged to see that its officers apply it to proper corporate purposes. Wright v. Hughes, 119 Ind. 324. Oliphant v. Woodburn Coal & M'g Co., 63 Iowa, 332; Kimball v. Grate Co., 69 N. H. 485; see Bent v. Underdown, §§ 522a, 701, 702. 7 See § 130. 156 Ind. 516. See § 125. By borrow 3 A corporation is impliedly authorized to borrow money,1 and has the incidental power to give seing. Cor- curity for its re-payment. As such security a corporation may give its note; may mortgage its property; and may issue coupon bonds payable to bearer secured by a mortgage of its property. But a corporation that receives from the state special or extraordinary franchises in order that it may the better serve porations may mortgage their property. Exceptions. 1 Curtis v. Leavitt, 15 N. Y. 9; Clark v. Titcomb, 42 Barb. 122; Kent v. Quicksilver Mining Co., 78 N. Y. 159; Oxford Iron Co. v. Spradley, 46 Ala. 98; Burr v. McDonald, Gratt. (Va.) 215; Union Bank v. Jacobs, 6 Humph. (Tenn.) 515; Booth v. Robinson, 55 Md. 419; Thompson v. Lambert, 44 Iowa, 239; Savannah and Memphis R. R. Co. v. Lancaster, 62 Ala. 555; Ward v. Johnson, 95 Ill. 215; Bradley v. Ballard, 55 Ill. 413; Commissioners of Craven v. Atlantic and N. C. R. R. Co., 77 N. C. 289; Lucas v. Pitney, 27 N. J. L. 221; Phila. and Reading R. R. Co. v. Stichter (Sup. Ct. of Penn.), 21 Am. Law Reg. N. S. 713; Wright v. Hughes, 119 Ind. 324; Bank of Australasia v. Breillat, 6 Moo. P. C. 152, 193, etc.; In re International Life Assurance Soc., L. R. 10 Eq. 312; Australian, etc., Co. v. Mounsey, 4 K. & J. 733. See, also, authorities in succeeding notes. 2 Fifth Ward Savings Bank v. First Nat. Bank, 48 N. J. L. 513. As incidental to its implied power to borrow money, an insurance company has power to transfer its assets in trust for the security of lenders. Nelson v. Eaton, 26 N. Y. 410; see Hope Mut. Life Ins. Co. v. Perkins, 38 N. Y. 404. And a mutual insur ance company may transfer its premium notes as collateral security for its debts. Brookman v. Metcalf, 32 N. Y. 591. Authority given by the charter of a corporation to its board of directors to execute a mortgage or deed of trust of its property and franchises, in order to secure its bonds, does not negative other methods. Uncas Nat. Bk. v. Rith, 23 Wis. 339. 8 A business corporation has implied power to make negotiable notes, and to indorse accommodation notes loaned to it. Auerbach v. La Seur Mill Co., 28 Minn. 291; Rockwell v. Elkhorn Bank, 13 Wis. 653; Lucas v. Pitney, 27 N. J. L. 221; Hamilton v. New Castle, etc., R. R. Co., 9 Ind. 359; Hardy v. Merriweather, 14 Ind. 203; Frye v. Tucker, 24 Ill. 181. But see James v. Rogers, 23 Ind. 451; Bacon v. Miss. Ins. Co., 31 Miss. 116. The note of a corporation signed by its treasurer may be negotiable although the corporate seal is attached. Bank v. Railroad Co., 5 S. C. 156; Clark v. Read, 12 D. C. App. Cas. 343. 4 Savannah and Memphis R. R. Co. v. Lancaster, 62 Ala. 555; Kelly v. Alabama and Cincinnati R. R. Co., 58 Ala. 489; Elec. Lt. Co. of Mobile v. Rust, 117 Ala. 680; Thompson v. 5 See Commissioners of Craven v. | bonds below par. Gamble v. Water Atlantic and N. C. R. R. Co., 77 N. C. Co., 122 N. Y. 91. See Nelson v. A corporation may issue its Hubbard, 96 Ala. 238. 289. the public in some employment in which the public has a pronounced interest, cannot without express authority mortgage its franchises. As Justice Gray said in Richardson v. Sibley,2 a case which held that a horse-railroad could not mortgage its road and franchises: "A corporation created for the very purpose of constructing, owning, and managing a railroad, for the accommodation and benefit of the public, cannot, without distinct legislative authority, make any alienation, absolute or conditional, either of the general franchise to be a corporation, or of the subordinate franchise to manage and carry on its corporate business, without which its franchise to be a corporation can have little more than a nominal existence." When, how Lambert, 44 Iowa, 239; Susquehanna | cure the payment of a debt; not to Bridge Co. v. General Ins. Co., 3 Md. | raise money. Carpenter v. Black 305; Lehigh Valley Coal Co. v. Agri- Hawk Gold Mfg. Co., 65 N. Y. 43; cultural Works, 63 Wis. 45; Wright see Davidson v. Westchester Gasv. Hughes, 119 Ind. 324; Fitch v. light Co., 99 N. Y. 559. The scope Steam Mill Co., 80 Me. 34. 99 N. Y. 547. of Carpenter v. Black Hawk Gold The power to mortgage, when not Mg. Co. is narrowed down to very expressly given or denied, may be re-little by Lord v. Yorker Fuel Gas Co., garded as incidental to the power to take and hold real estate and make contracts. Aurora Agricultural Soc. v. Paddock, 80 Ill. 263; West v. Madison County Agricultural Board, 82 Ill. 205; Taylor v. Agricultural, etc., Asso., 68 Ala. 229; Jackson v. Brown, 5 Wend. 590; Central Gold Mining Co. v. Platt, 3 Daly, 263; Watts's Appeal, 78 Pa. St. 370, 391. Authority in the charter of a railroad company "to acquire, alien, transfer, and dispose of property of every kind,” includes the power to mortgage. McAllister v. Plant, 54 Miss. 106. 1 Coe v. Columbus, etc., R. R. Co., 10 Ohio St. 372; Atkinson v. Marietta, etc., R. R. Co., 15 Ohio St. 21; State v. Morgan, 28 La. Ann. 482; Pullan v. Cincinnati, etc., R. R. Co., 4 Biss. 35; Daniels v. Hart, 118 Mass. 543; Palmer v. Forbes, 23 Ill. 301; Frazier v. Railway Co., 88 Tenn. 138. See Carpenter v. Black Hawk Gold Mg. Co., 65 N. Y. 43, 50; Lord v. Yonkers Gas Co., 99 N. Y. 547. But see Kennebec, etc., R. R. Co. v. Portland, etc., R. R. Co., 59 Me. 9, 23; Shepley v. Atlantic, etc., R. R. Co., 55 Me. 395, 407. 2 11 Allen, 65, 67. 3 See Commonwealth v. Smith, 10 Allen, 448. Power to sell its property conferred on a corporation in strong and general terms, includes the power to mortgage. Willamette Mg. Co. v. Bank of British Columbia, 119 U. S. A corporation having authority to mortgage its property for the purpose of carrying on its business, may execute a mortgage to secure the payment of future advances. Jones v. Guaranty and Indemnity Co., 101 U. S. 622. But a corporation formed under the New York Manufacturing Companies' Act of 1848 has authority 191. Compare East Boston R. R. Co. to mortgage its property only to se v. Eastern R. R. Co., 13 Allen, 422, |